ZUARI INDUSTRIES LIMITED (ZUARIIND) Q4 2026 Earnings Call Transcript

Ladies and Chairman, good day, and welcome to the Zubari Industries Limited Q4-FI26 Earnings Conference Call, hosted by MUFG in time. As a reminder, all participant lines will remain in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal the operator by pressing star, then zero on your touchstone telephone. Please note that this conference is being recorded. I will now have the conference over to Ms. Darshini Desai from MUFG in time for opening remarks. Thank you. I'll over to you.

Thank you. Good afternoon, everyone, and I extend a very warm welcome to all participants on the Q4 and FY26 earnings conference call of Zuhari Industries Limited. Today on this call, we have Mr. Atta Sahab, Managing Director, Mr. Alok Saxena, Whole-Time Director, Mr. Jatin Jain, Chief Financial Officer, Mr. Yadwinder Boyle, Company Secretary, and Mr. Alok Banerji, CEO of Zuwari InfraWorld India Limited, a wholly-owned subsidiary and the real estate arm of Zuwari Industries Limited. Before we begin this call, I would like to give a short disclaimer. This call may contain some forward-looking statements which are completely based upon our beliefs, opinions, and expectations as of today. These statements are not guarantees of our future performance and involve unforeseen risks and uncertainties. With this, I hand over the call to Asa Sahabji. Over to you, sir. Thank you.

Thank you, Drashini. On behalf of Zwar Industries Limited, I would like to extend a very warm welcome to all the participants in today's call who are joining us today for the financial results discussion. And I'm going to focus primarily on our annual performance, and when my colleague Jatin Jain speaks, he will talk about even the quarterly performance. So we had a great year as far as our sugar business is concerned. We continue to demonstrate very strong and resilient operating performance. We achieved our highest ever crushing of 159.7 lakh quintal for the financial year. And for this season, we reached a record of 163.7 lakh quintal. The best part was that we achieved the highest ever capacity utilization of 101.7%. We had a slightly lower recovery this year in financial year, 26, at 10.26% compared to the previous year. But this was largely in line with the lower recovery trends observed across the region. Consequently, our production was marginally lower at 14.4 lakh quintals versus 14.7 lakh quintals last year. Although, if you look at the whole season, the production increased by 13% to 14.8 lakh quintals. Sugar sales was a shade lower at 14.3 lakh quintal compared to 15.1 lakh quintal by 25, while our sugar realizations improved to 4,053 rupees per quintal from 3,894 per quintal in the previous year. Our ethanol business also maintained a steady momentum with production increasing by 10.1% and sales growing by 0.7%, while average realizations to The power sales were a shade lower at 857 lakh units compared to 907 lakh units in FY25, because the mill was not operating during April of 2025. So if I want to summarize the performance of the sugar division, I think just to reiterate, we have had the highest capacity utilization. The sugar utilization was up by 4.1%. All production up by 10.1%, sales up by 10.1%, sales up by 10.1%. So, these are the highlights of our SP division, and I'm very happy to see you. Zawari Intra World, which is our real estate subsidiary. It continues to make We are currently executing projects in Hyderabad, Kolkata, and Bangalore in India. The aggregate GDV of all these projects in India is about 4,900 crore. This includes a residential project in Hyderabad, a mixed-use development at Pani Hathi in Kolkata, the Advents Cooperate Center office in Kolkata, and very recently a plotted development project in Bangalore, which is marking our entry into that very important market. These projects are at various stages of development, and they are... Forming a part of the execution of our strategy of building a diversified and scalable development management portfolio. We continue to evaluate further DM mandates across South India and Kolkata. Our most important project in Zwarin Travel, which is the St. Regis Dubai project, is now nearing completion. Because of the war and the difficulties in that region, there were slight delays in completion. The project now stands 98% complete. We have, as on 21st of May, received the building completion certificate from the authorities, and we are expecting the handovers to commence very soon, and my colleague, Alok Banerjee, who has joined the call today, will speak. We can take you in a session if you have any questions about the Dubai project. Simon India, which is our engineering and construction company, it has continued to maintain its execution momentum during the year with completed projects of around 50 crore. They completed the prestigious fifth evaporator project at PPL Paradeep. They completed the 8,000-ton phosphoric acid tank project at PPL Mangalore. They have been doing residual engineering work at PPL Goa, as well as doing a few feasibility studies and design engineering projects. In addition, projects worth almost 95 crore remain under execution, including the TG4 project at PPL Paradeep and the sulfur melting and filtration facility project at PPL Paradeep. The business has continued to strengthen its Technology and innovation capabilities through strategic partnerships. with Global Technology Licensors, along with collaborations with leading academic institutions such as NML Jamshirpur, Moving on to our financial services businesses, both Zuhari FinServ and Zuhari Insurance Brokers have had excellent years, financial years. In Zuhari FinServ, the EBITDA grew up by more than 60%, and right now they are implementing a new tech platform to distribute a range of financial products. Zwari Insurance Brokers, the Bitta grew up by Thank you. Our bioethanol joint venture, namely Zawari Envian Bioenergy Private Limited, commissioned its plant on 1st of January 2026. The plant is currently under destabilization. As you are aware, And in the third round have not come yet, and we have some orders which will take us through. There has been a lot of positive movement in the ethanol industry. As far as our investment portfolio is concerned, we continue to maintain our strategic investments across our portfolio, including Jambal Fertilizer, Zuhari Agrochemicals, Paradeep. Paradeep is actually held below Zuhari Agrochemicals. We also hold equity in Tex-Megorail and Engineering. Now, deleveraging ourselves has been one of the core objectives, and we have been working towards it. We believe. We are also working on some plans to develop. Looking ahead, I think the macroeconomic situation, of course, is a concern to all of us. It is affecting CapEx plans. So that's a concern. It has also increased the input prices, even for our sugar business. So we will have to watch that carefully. Sugar prices are expected to remain stable in the near term as closing stocks are estimated at about 5.6 million tons, which was 5.3 million tons last year, which is equivalent to about two months of consumption. While stagnant ethanol prices have continued to put some pressure on profitability, we remain quite optimistic, as I said earlier, about the sector outlook. We are also expecting that the much-awaited revision in ethanol prices will come about. It's been long overdue, and industry has made several representations of the government. As I mentioned in our previous course, we continue to evaluate inorganic growth opportunities across our businesses. Even as we continue to adopt digital solutions across our businesses to improve our efficiency and streamlining our processes. So, ladies and gentlemen, broadly, this is the sense. You have seen the results, I hope, and also gone through the investor presentation. And in the interest of time, now I would like to invite my colleague, Jatin Jain, CFO, to take you through the results.

And good afternoon to everyone. I will begin by providing a review of Suwari Industries' performance. On a long basis, the company reported a total income of 995 crores. Finance cost by 11 crores on an year-on-year basis. Finance cost is 111 crores. Consolidated basis, the total income stood at around 1,155 crores for financial year 26 versus 1,082 crores for financial year 25. While consolidated EBITDA stood at around 181 crores of 12.2% from financial year 25. Profit before exception item stood at 131 crores for the year against a loss of 67.8 crores. Consolidated profit after tax stood at around 105 crores for the year against a loss of 94.4 crores. The company continued to benefit from improved operational efficiencies, financial discipline, and lowering borrowing costs during the year. Lowering of finance costs by 19.4 crores on a consolidated basis. I'll just give you a highlight on updates on the subsidiaries. In terms of our subsidiaries, the major subsidiaries were in for World India Limited. The total income grew by 78% on a year-on-year basis. And it has delivered a stable return during the current financial. For Simon India Limited, the Q4 income surged to 29.8 crore, compared to 8.9 crore in the corresponding quarter of the previous year. For the financial year, total income stood at around 89.4 crore, making a significant increase from 18.8 crore reported in financial year 25. The company achieved a strong improvement in full year beta, rising to 6.8 crore from 0.9 crore in financial year 25. For our Zwaris in South, the total income increased to 20.1 crores from 19.3 crores in financial year 25, reflecting a growth of approximately 4.1% year on year. Financial year EBITUS to 5.6 crores compared to 3.5 crores in financial year 25, resisting a strong growth of 60% year on year basis. For our Zawari Insurance Broking Limited, the gross return premium for financial year 26 increased to 99.4 crores from 91.2 crores in financial year 25, resisting a growth of approximately 9% year-on-year basis. Brokerage income for the financial year stood to 10.2 crores compared to 7.3 crores in financial year 25, reflecting a strong growth of approximately 40% year-on-year basis. So, I have given a snapshot of the performance of my subsidiaries. Now, I end over the call to Dashni. We can...

Thank you. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use their handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We take the first question from the line of Santo Shetty from LGC Capital. Please go ahead.

Good afternoon, sir. So, sir, my first question is that Zwarif Inserve and Zwarif Insurance Brokers have both delivered strong operational improvement. What are the key strategic priorities for scaling this business further?

I think we are looking to expand the customer base in both the businesses. We believe that there are multiple opportunities for both Zwarif Inserve. Particularly in the area of financial product distribution. Historically, we have focused on broking, but we believe that the scope for distributing a whole range of financial products is quite immense in the country. India has become a sophisticated market for financial products, and we want to leverage technology. There's a lot of room for growing our consumer business as well as corporate business. So traditionally, And that, of course, that portfolio we will try and grow, but we will also see what we can do on the non-corporate side. And I think the entire ecosystem, particularly in North India, is very ripe for entities like Zwani Insurance Brokers. And therefore, we reasonably Thank you.

Okay, thank you. Just another question. Management has highlighted deleveraging as a key focus area. Beyond the expected inflows from the Dubai project and associate company, what additional strategic initiatives are being evaluated to further reduce debt at the holding company level?

I think that itself will, you know, bring us to a very comfortable level. So we are not looking at kind of, you know, raising any other kind of resources. Thank you for deleveraging at this point in time. I think the inflow that we're expecting from Dubai and the Soviet company will bring us to a very, very comfortable situation.

Okay, sir. Thank you so much, sir. That really helps. All the best.

Thank you.

Thank you. We take the next question from the line of Viran Patel from Balaji Securities. Please go ahead.

Yeah, good afternoon, sir. Sir, I'm Vijayan Patel. I have two questions. One is regarding the deleveraging. Can you let me know what kind of deleveraging you're looking at? Because in the last one, two quarters, I've been hearing that this will be deleverage every quarter, you know, you keep assurances that this quarter, the debt will come down. So investors are always keeping hopes that deleveraging will happen. So far, it has not happened. So, how sure you are that this quarter, the Dubai amount will come, and can you highlight how much the leveraging will happen this quarter?

I think we have been making very fact-based statements in our calls. And telling you about how the projects are progressing. And this is on the basis of a real project that we have done in Dubai. And I would like to invite my colleague, Alok Banerjee, who is the CEO of Zawari Interworld, and who has been handling the Dubai project. So, Alok, would you please give a heads up on where the project is and by what time should we expect? To bring in the funds from Dubai. Alok?

Yeah, thank you, Ather. Good afternoon. So, as you know, the Dubai project is the cornerstone for us to generate these cash flows. And I'm happy to say that in spite of the West Asia crisis that we are going through, we received the building completion certificate. Just about a couple of days ago. So now, since we are 100% sold out, we have sold it on a payment plan wherein 50% was collected during construction, and 50% will be collected post getting BCC, which is a building completion certificate. And now, as we speak, we are raising the demand letters on all the customers who have purchased. And we expect that about 850 to 900 crores should flow into us over the next six months. And we don't see that. We see that as a reality and hoping that nothing economically or in something else happens in the world. But otherwise, this is a completed project. And now also I'm glad to inform you that we use the Sandwiches brand. And Marriott has recognized this building as the best-friendly building outside of the U.S. in the residential sector. So, as we speak, we are quite confident that this money should come in as the customers start paying off.

So, sir, this 850 crore will totally be used to repay the debt and bring down the debt, or some of it will be used somewhere else?

This amount will be used entirely for deleveraging. And I think the sense that we are getting from Alok is that funds should start coming to us in Q2 and Q3 of this year. And Alok, you have to tell us how much of the total inflow will you receive in this year. Alok, can you give that number for the benefit of all?

Right, right. That's why I said that in this year, other than the small amount of retention money, so about 800, 850 to 900 crores would come in this year.

So what kind of debt we are looking after this, after receiving this amount? What would be the net debt?

I will answer this question. I will answer this question. So after considering the inflows from the Dubai project of around 800 crores, Considering the exchange price fluctuation and the inflows from our associate company of around 258 crores rupees. So we expect that our external borings will be in the range of around 700-800 crores, which we are able to manage from our operations. Considering our sugar business is performing very well, after considering the impact of 30 rupees in the SAP prices, so we will be able to manage it.

So, at the end of this financial year, we'll be at the debtor, we'll be at the debtor.

Is that, I heard it right?

Okay, thank you. My next question is regarding the strategic investments we have. I've seen that 20% reduction has happened in the total investment. So what's happening in the entire group? Because entire group, I see it's not performing. So as a Zubari group, do you have some issues regarding the performance of all your companies because the value of all your investments have gone down by 20% with around 1000 crores? So can you highlight me about what's happening? As a shareholder, where do we see that?

I think if you have had the chance to see or review the performance or participate in the calls of our companies, they have all put up exceptional performance. Both Paradi phosphates as well as Jambal fertilizers have put up exceptional performance. We do not comment on the share prices, and share prices are subject to multiple things, which I do not want to comment about. But I think operationally, both the companies have put up an excellent performance. I think overall in my portfolio, all the three major companies, which is Jambal Fertilizers, Paradeep Phosphates, Ultimate and Paradeep, of course, is not directly owned by us. It is through Azwari Agrochemicals, and we have very small shareholding directly in BPL, and our company, Texmacro Rail, all of them have done quite well operationally. So that's all we see, and as I mentioned earlier in previous calls, they're all strategic investments. Very important for the country. We are present in all these strong sectors that the country requires, and operationally, we are very happy with their performance.

Sir, last question about it. As you said, all the companies have performed very well. Just go through what has happened with Tesma Co-roll. They have just made a provision of 700 crores in their balance sheet. So I think Zuhari in the shareholders industry is a shareholder in the company. And as a shareholder, our share price has been from 400, it has come down to 250. So all these things are indirectly hurting shareholders like us. I just want management to look into it and you should think about what is happening actually.

Thank you very much. We continue to do that. And Jatin, you want to mention about the fact that TexmicroRail…

I just need to mention a fact because TexmicroRail is a strategic investment. We are holding it. But we are not consolidating this investment in our consolidated financial statements.

Okay. We are holding this investment as a strategic investment. There is one more project in Delhi which is coming up, which are some of your group companies. Can you highlight about what is which asset project?

I think that question is best asked to that company, Tex-Macro Infra Holdings.

Is there any project coming up over there in Delhi?

Yes, they have made announcements about a project coming up in Delhi.

What's the status of that?

I think, you know, this best asked to the management of TIHL.

Okay, thank you. That's it for me.

Thank you. We take the next question from the line of Gunjan Modi, an individual investor. Please, go ahead.

Yeah, very good afternoon. So, my question is regarding Goa land banks we have, and I guess we have conducted the Tewari Agro during the EZ.1 TV.

Gunjan, I'm sorry to interrupt you, but there's too much of background noise coming from your end.

Okay, I'm audible now. My question is regarding the Goa land banks. Do you see any value left since the political crisis which began in Coa, I guess, since last two years, and do you plan to deliver from that?

Currently, Swari Industries is holding around 260 acres of land parcel and the value in the book of account is around 163 crore.

Thank you. Thank you. As far as monetization is concerned, we are not factoring any monetization.

My next question was regarding Google Project. What was the investment context that we've done, and what is the profit out of this? We have heard of the cash flows which are coming out. Just wanted to understand the financials.

Jatin and Alok can talk about I can tell you that whatever numbers that you're hearing is the share of the profit that Zwarin will get from the project. Alok and Jatin, you may please provide more details. So, yeah, Gunjan. And Alok, maybe Alok can speak.

Yeah. So, since we are the 50% JV partner, our share of the profit, the estimated profit post-completion should be around... About 600-odd crores, which will come, and the capital invested was around 270-275 crores. So that's why it makes up about 900 crores of cash, which will come back to us. Got it. Do we see any currency risk playing out here? No, we are, you see the rupee is depreciating to our advantage. And we are monitoring it very closely. We are, if necessary, we'll take forward covers. But since we invested long back, we're only as rupee depreciates and all, you know, predictions are that the rupee will continue to depreciate. So we are monitoring the market. We don't see currency as a risk.

Got it. And any chances of investors backing out, given the investment climate in the complete bidet list and UAE?

Keeping up in this talk, but we don't find anybody actually writing to us so far. And we are bullish that nobody will back out.

That's all for us. Thank you.

Thank you. We take the next question from the line of Pahal Sharma from DD Capital. Please go ahead.

Yeah. Hi. Good afternoon. Hello. Good afternoon. Yeah. So, I have a set of questions with me. First is that despite achieving a good gain crashing during the year, sugar recovery remains lower via wire. So, like what operational initiative is management undertaking to improve recovery rates in the upcoming season? And also, how much of this is controllable versus weather or regional factors?

I would invite my colleague, Mr. Alok Saxena, who is our whole-time director and unit head of the sugar power and ethanol division. Mr. Saxena, would you like to answer this? Sure.

Thank you. First of all, I would like to divide this into the two parts. One, we have started our operation very early, that is in the last week of October itself. Though we did it last year also, but this time we crushed more cane as compared to last year, and the early part recovery is low, so weighted average is low, that is one part, and second is the agro-climatic condition, it depends mainly on sugar recovery. And if you compare it with our region for other factories also, so we are at the best, the drop is minimum in our case, and our varietal replacement program is doing well, and we have already achieved a 238 variety which we are in process of replacing it, so we have achieved it significantly, so we think that we will overcome in time to come.

So to add to what Mr. Sakshina just said, when we did the analysis of nearby units, we found that we had done reasonably well, and we were fourth in the picking order in a list of about 14 units nearby. Which is not a bad performance as far as overall sugar recovery is concerned, or whole percentage is concerned.

What are we doing to, and how many factors are controllable and non-controllable?

First of all, I think we all are affected by the climatic risks. We have unseasonal rains, sometimes we have floods. So they are quite uncontrollable and very difficult to predict as well. A few years ago, we had a major problem of red rod disease that impacted the previous crop of 238 varieties. And as Mr. Alok Saxena said, we embarked on a multi-year plan to replace that variety with newer and higher yielding varieties. And the varietal replacement program is such that it takes a lot of time to implement. But we are doing that, and we are doing that by also educating our large farmer community. So we set up a number of demo plots. Showed to the farmers. Second is that we are now, again, re-looking at our whole strategy of providing agri-inputs and agri-impeation. We are also monitoring these things through our app, which is the Saksham app. Now a large number of our farmers have downloaded the Saksham app. So the process of educating farmers and training them through that app is also going. We are also organizing some interesting round tables where we invite cane industry experts from around Uttar Pradesh and all over the country. And we found those discussions to be very beneficial, not only for us, but for many units in Uttar Pradesh. So I think these are the things that are in... We are making sure that we do our 100% to improve the things that are in our control, and we remain hopeful that these efforts will bear fruit.

Understood, sir. So, now the company achieved its highest ever capacity utilization this year, which is very great. So, like, from here onward, would future growth primarily come from operational efficiencies, like, or capacity expansion or improved product mix?

I think you said it, and I think this definitely we will focus on at our attention. On improving our efficiencies. We have already achieved the maximum capacity utilization as I think we could. A few years ago, it appeared very difficult, but I think the team at Speed Division has done it and made us really proud. Our focus will now be on looking at what we can do in terms of steam consumption, in terms of our electricity consumption, or even chemical consumption, for example. And as I say and as I speak about chemicals, let me also highlight that the last year has been very difficult and challenging. The chemical prices across the board, they were much higher than what anybody anticipated. So we will definitely focus on reducing our consumption of chemicals. As well as, you know, we continue to look for other opportunities, particularly in Uttar Pradesh.

And likewise, it means ethanol profitability continues to remain under pressure due to stagnant pricing, right? So, like, at what level does the current pricing environment start impacting industry-wide capacity expansion plans?

Right now, we are not having any major expansion plan, since Juari has already having a joint venture in Envian, so that is the green-based ethanol we are already in process, and as far as sugar is concerned, we are capitalizing our plant by syrup diversion and B-heavy diversion instead of sea-heavy, though it may be slightly crucial, but it gives us liquidity, and that's why we are capitalizing our plant.

Lighting our So, let me just add and do a little bit of a recap of what we have done in our factory in Aira. We have expanded the capacity to 125 k LPD. We also built in the flexibility to produce ethanol directly from sugar syrup. And since our sugar factory did not produce enough molasses to run the distillery throughout the year, We started buying molasses from outside. And if you see some of our previous year's performance and results, we have also reported that this opportunistic buying of molasses helped us run the distillery much longer than we could do it earlier. And I have said this in the past, and I repeat that our hope and aspiration is that we run the distillery for 330 days. In fact, last year we have done a fantastic performance. How many days did we run it? 316 days, which probably was the highest favor.

And the highest ethanol production are 372.

Right. So, and whatever we have produced, we have sold as far as Zewari Industries is concerned. We have not been short of orders and we have been supplying to the OMCs. It's only in ZEBPL, which is our joint venture, when it got commissioned, it was expected that the OMCs will come when there is a second round and a third round of tenders, as is the norm. Every, in the previous years, they used to come up with second and third round of tenders. But we found that those tenders were not coming. And we also saw, like probably you have also seen, The electricity in the ethanol sector was quite significant. Again, the 1,050 crore litres of tender that the OMC is... Rates that came in to OMCs were about 1,800 crore litters. And we understand that now that capacity stands increased to about 2,000 crore litters. It's almost like 100% over. All of us have been quite worried about the sector outlook, but then the conflict in West Asia happened, and since then we are seeing a noticeable change. And we have seen some recent notifications of E27, E30, even E85, and E100, I think which are very positive signs. We have always maintained that ethanol is a very key component of India's energy security, and the government must push higher ethanol production to reduce the reliance on crude imports, As well as of course, to improve farmer incomes. And we were very happy to see how the Prime Minister himself noted on multiple occasions in recent times the importance of the role played by ethanol sector in reducing our reliance on good imports. So we remain very positive about the long-term outlook. We are dealing at an industry level a problem of overcapacity. But I think as India embraces We should see, you know, complete dissipation of this excess capacity, and that will be very good for the industry. But till that time, as Mr. Saxena said, we are not looking to expand our capacity, but we hope that we...

Thank you.

Thank you. We take the next question from the line of Amit Mehendel from RoboCapital. Please go ahead.

Thank you. My first question is on the Dubai project. You know, I think if I heard it correctly, I think 50% of payout will be done by the buyer at the time of handover. So, what is the recourse that we have in case some of the buyer is backed out? Do we have to go to the Lance department and then file a case and then take possession of the flag?

As Mr. Alok Banerjee mentioned earlier in the call, we have had no inquiries or no concerns from any of the buyers. So that's very good news, that everything seems to be absolutely on track, and the question is largely theoretical. But nonetheless, I will request Mr. Banerjee to provide an answer to your question.

Yeah, I mean, I'm looking for a recourse. Like, what happens if someone doesn't take? Original 50, yeah.

Well, the law, as per RERA in Dubai, allows us to profit 40% of the total apartment value and take back the apartment. So, if somebody has paid money, we can profit 40% of the value. And then resell the apartment to a new buyer. That's the law. We don't envisage it, but that's what the recourse is.

Right. And that typically would take about a year for whatever year it is.

Yeah. We don't really know the timeline, to be honest. Because it can happen. We just need to go to the land department, like you rightly said. And after, of course, trying to negotiate with the customer, maybe the cycle time might be possible. We don't know, actually.

Right, sir. And second, I just wanted to clarify the debt. You know, I think earlier, if I heard it correctly, the guidance was about 700-800 crores of net debt at the end of the year. So, can you just tell me what is the debt now, and then, you know, how does the math work out because we'll get 900 crores from Dubai, and then how does it end up with 700 crores?

So, yeah, Amit, I will take up this question. As on date, we have a total external warrants of around 1900 crores. We are projecting an inflow of around 850-900 crores from Dubai project and inflow of around 250 crores from our associate company, which will help us in reducing a total overall delivery of around 1200 crores. So we will be standing at a position of around 700 crores as at the end of the year.

Perfect. And the last question is on the GDP, I think on the real estate business, you know, what type of, I mean, what type of revenue recognition are we looking at for next two, three years? I mean, what type of deliveries, like pre-sales converting to accounting revenue?

Alok, you want to answer that question?

So, as you know, Amit, in this real estate value chain, the longest time taken is to get all the approvals and thereafter the real approval. So, we are a development manager to the developer where we are taking care of the project from concept to delivery, marketing, and sales, and we charge a fee of the top line. So we expect that the DM mandates that we have, we expect that the revenue recognition is a fee-based recognition. So as we sell, we get a fee as a percentage of the sales value, and that is booked as an income. So, that's unlike, let's say, you know, being a developer where the revenue is recognized on project completion method. Here, it is a simple free method. So, we expect that these projects that we have signed up, other than the small ones which are like the Bangalore plotted development, which should be over in 18 months, the Hyderabad and Kolkata ones will take about five years. For completion, and this revenue of the top line will be recognized over a period of five years, based on the sales velocity.

Right, so I'm just clarifying. So suppose in case we sell a unit of, say, you know, say one crore rupees, and our DM ratio is, say, 10%, then the, you know, the revenue that we have, which is about 10 lakh, that is recognized over a period of five years, still the project is delivered. Is that correct?

Yeah, what happens is, yeah, it is based on the total, see the projects being large, they are phase-wise completions. So what happens is that as you complete a phase, you recognize the revenue fully, and our revenue is coming from the cash generation with the customer phase to the developer. So we are getting a portion of the revenue. So, our revenue will be split over the construction-linked plan for the customer. So, over that period of three to four years, we'll be getting for each apartment.

Understood. And what would be our EBITDA margin on that portion?

Typically, being our service revenue, typically our EBITDA margins are in the range of about 70% to 75%.

Okay, great. Understood. Thank you. That's it for my hand.

Thank you. Thank you. We take the next question from the line of Suhani Singh from Sajar Capital. Please go ahead.

Hi, sir. Good afternoon. I just wanted to ask if the company has mentioned continued investment in technology and digital transformation. To which businesses are currently seeing the most tangible benefits from these initiatives?

I think two businesses come to my mind immediately. One is Warifinsav, where we expect a technology platform to help us distribute the financial product much faster and much more efficiently. The second business is Simon India, which is an engineering and construction company, where particularly on the engineering side, We are, and procurement, we are implementing a large number of digital tools, which are allowing us to cut down the cycle time in engineering, and not only cut down the cycle time, but also do very efficient engineering for our clients, and efficient procurement. You will be happy to know that Simon India has recently patented a tech tool, copyrighted So, I'm very happy to see that Simon India is developing in-house tech products to improve their own productivity and quality of work. But as I say this, I must say that our sugar division, which is a traditional business and not really known for too many digital innovations, has done exceedingly well. And there are a large number of digital tools already. Implemented in our sugar division. I keep mentioning about the Saksham app through which we connect with thousands of our farmers. We have GPS-enabled trucks, and through technology, we monitor all the movement of the cane from 107 centers to the factory. We have handheld devices at each of the centers, so we have excellent visibility of how many tractors, trolleys, and even bullock carts, they come to our centers, and how much cane is lying at which location, we have a very good idea. We also did a very interesting experiment as far as agri-equipment was concerned, is that we created an app. And we allowed farmers to really trade amongst themselves. So it was a very interesting experiment, and I'm very happy to tell you that people made use of that app, and they utilized each other's equipment very effectively in our command area. So very interesting set of possibilities across our businesses. I'm very happy to share some more use cases. In fact, I would encourage my business heads to actually post some of these stories on their websites so that our investors can become better aware of whatever way we are embedding technologies in our businesses.

That's good to know, sir. Also, the company continues to maintain strategic investments across multiple listed entities. So, how do you evaluate value creation opportunities from this portfolio over the long term?

See, I think, you know, these are all legacy investments, as, you know, Zwarri holds these strategic investments across these entities. So, we have no intention of selling or churning these investments. In response to a question earlier, I commented on the performance of some of the underlying investments. They are not only strategic for us, but strategic for the country as well. Probably you have noted the consolidation of the fundraiser business of the group. A few years ago, we used to have three different entities, namely Zawari Agrochemicals, Mangalore Chemicals, and Bharati Phosphates. They are now all consolidated under the PPL umbrella. And it's a very formidable franchise. That's the kind of thing that we see. We have a... So we definitely look forward to holding these investments.

Just one last question. Can management share its broader vision for the real estate business over the next three to five years, particularly around the scale of development management portfolio?

So as I have mentioned in the previous calls, is that right now our focus is on growing this development management business. We started it some time ago. And we got some breakthroughs in Hyderabad and in Bangalore. Definitely, for the next several quarters, we will. It's meant light. Thank you. And we are in a position to allocate more capital to the real estate business. At that time, we will see whether we can even do joint development or even... But they're really into the future.

Thank you very much and all the best.

Thank you. We take the next question from the line of Soumya Raghuvanchi from Nirvana Capital. Please go ahead.

Hello. Good evening, sir. Thank you so much for taking my question. Looking ahead to FY27 and beyond, what are the company's strategic priorities across sugar, ethanol, real estate, engineering, and financial services? And how should investors view expected revenue, EBITDA, and PART growth along with key operational expansion and deleveraging milestones?

So, we are not presenting a three-year plan in this call, unfortunately. We are talking about largely the performance of the previous quarter as well as the last year, and sharing with you our view of what lies immediately ahead to the rest of our ability. On an overall basis, we have mentioned this in the past, and I have no problems in repeating. We are looking for inorganic opportunities in the sugar sector. Our first priority was to fully optimize our current asset. It is an old asset. We had invested a fair bit of capital in that asset, but it was really not optimized. And as you probably noted in the earlier part of the call, We have reached a stage where we have reasonably optimized this asset, and a couple of pointers for us going forward is cost optimized, further cost optimization, greater technology deployment, and also looking at maybe profitable product mix in that business. So, we will look for inorganic opportunities in sugar. In ethanol, our future expansion will come. In the joint venture, which we have set up, and we had set up ZDBPL. We had said that we want to expand 2000 KLPD. But suddenly, there were breaks on ethanol blending, and there was tremendous amount of overcapacity in the sector. So, in a sense, we have put those expansion plans on hold, and we are first trying to stabilize the investment. On the real estate side, as I mentioned earlier, we are growing our DMP. We are doing two projects in Kolkata, as Mr. Banerjee mentioned earlier. So if we find some more opportunities there, we will take it up. But going forward, I think two, three years later, as I just mentioned to the previous person, there is always a possibility that like other real estate developers, we could be doing joint developments. We could even be buying an interesting property if it's available. But not immediately. Right now, the idea is to do as many projects in DM as possible. As regards to the financial services businesses, they are right now small businesses, profitable, but small. And we are trying to grow them. We are trying to use technology. And we see very interesting possibilities in both the businesses, particularly the insurance business. Both these businesses also require investment. And at this point in time, when we are trying to deliverage, I think we have to be very watchful about what kind of investments we make in these entities. So they will continue to deploy their own profits into their growth. For the time being, and once we have kind of deleveraged ourselves, our focus will be on growing the sugar portfolio as well as the... So, overall, qualitatively, this is the picture that you can think of of the group.

Okay, sir, I got it. That's it from my side. Thank you so much.

Thank you. Ladies and gentlemen, in the interest of time, we take that as the last question. I now have the conference server to Ms. Dalshani Desai from MUFT in time for closing comments.

Thank you, everyone, for joining this call. We really appreciate your participation. If you have any further questions, please feel free to reach out to us at MFG Investor Relations. Thank you.

Thank you. On behalf of Zuwari Industries Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your line.