ZUARI INDUSTRIES LIMITED (ZUARIIND) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Q1FY27, Earnings

Conference Call of Suhari Industries Limited.

As a reminder, all participant lines will be 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 an update by pressing star then zero on attached to informed. Please note that this conference is being recorded. I will now have the conference over to Mr. Aryan from MEFG in time. Thank you, and over to you, sir.

Thank you, Ms. Khan. Good afternoon, everyone, and a very warm welcome to all participants on the Q1 S527 earnings conference call, Bawawari Industries Limited. Today on this call, we have Mr. Atil Sahab, Managing Director, Mr. Alok Sachsen, Executive Director, Mr. Jatin Jain, Chief Financial Officer, Thank you, sir. Mr. Yadwinder Royale, Company Secretary, and Mr. Alok Bakhti of Beeru, Zuwari, InfraWorld India Limited, a HONI-owned subsidiary and the real estate arm of Zuwari International Limited. Shlimmer, before we start this call, this call will contain some forward-looking statements which may be based upon our beliefs, opinion, and expectations of the company. As of today, these statements are not a guarantee of future performance and will involve unforeseen risks and uncertainties. With this, I hand over the call to Mr. Akisab. Over to you, sir.

Thank you, friends. On behalf of Zawari Industries Limited, I would like to extend a very warm welcome to all the participants who have joined us today for the Q1 financial results discussion. We start with the performance of the sugar, power, and ethanol division. Our sugar sales stood at 4.7 lakh quintile compared to 3.6 lakh quintile in the last year the same quarter, which represents a 29% increase year-on-year, primarily supported by higher domestic quota allocation. Average sugar realizations also improved to 4,116 rupees per quintal from 4,036 rupees per quintal last year. Despite the improvement in sugar volumes and realizations, margins remained somewhat under pressure, substantially due to about 8% increase in the SAP, which was 30 rupees per quintal for the last season, As well as somewhat lower recovery from ethanol, which was manufactured through the molasses route. Sugar recovery for this first quarter is put at 11.7%. Last year, we had not produced, so the numbers cannot be compared with last year. The performance of the current quarter included six operating days in April 26, whereas there was no crushing operation in the last year. Our ethanol business remained on a steady momentum with production increasing by 1% to 10,138 KL and sales grew by 5% to 10,248 KL. Average realization stood at 60 rupees 70 paisa per liter. Power sales for the quarter stood at 62.8 lakh unit compared to 7.7 lakh units for the same quarter last year. R&M activities are currently in progress at the Sugar Unit as we prepare for the upcoming crushing season. Moving on to our subsidiaries and joint ventures, the real estate subsidiary of the company, Zwari Infraworld, achieved a very important milestone this quarter with the 100% completion of the St. Regis Residence of Dubai. We are expecting to commence handovers It was shortly, with all the preparatory activities currently underway, while the profit repatriation from the project has already commenced. This marquee project demonstrates our capability of successfully executing projects of similar size and scale in that region. We also continue to make steady progress on our asset-light development management model. As you are aware, we are doing a project in Hyderabad called Gangotri Tribuja Project, where the sales office and customer experience centers are now complete and marketing activities are in full swing. The project in the Sages, a sellable area of 2.8 million square feet. We have also executed a DM agreement for a 14.8-acre plotted development in Bangalore. LERA approval is in place for this project. We continue to evaluate further DM mandates across Bangalore, Kolkata, and Hyderabad. In our subsidiary Simon India, during the quarter, we executed projects worth about 30 crore, with approximately 70 crore worth of orders currently under execution. The ongoing crisis in West Asia has resulted in deferred CAPEX across sectors, affecting the engineering and construction industry as a whole. The company is exploring opportunities actively both within the country and outside to strengthen its order book while working on digitalization and AI-led initiatives. Our ethanol joint venture, Zouari NBN Bioenergy Pvt Ltd, stabilized its plant operations during the current quarter and has secured orders until the month of October 2026. As regards our investment portfolio, we continue to maintain strategic investments across our core portfolio that comprises, as you are aware, Chambal Fertilizers, Zuhari Agrochemicals, Faraday Phosphates, Tex-Mico Rail and Engineering, and Tex-Mico Infrastructure and Holdings. The value of our listed strategic investments as on 30th June was 4,223 crore, which was up 15% quarter-on-quarter due to market movement. Friends, we are making decent progress on our deleveraging exercise, excluding working capital. The aggregate external debt of the company and its subsidiaries was 1,888 crore, as against 1,909 crore at the end of the fourth quarter. Profit repatriation from our St. Regis project in Dubai has commenced, with part of the proceeds received in July and August, And the balance expected during the current fiscal year. We also expect that the loan that was given to an associate company, Zawari Agrochemicals Limited, will also be repaid to the company in the current quarter. Looking ahead, I think on the sugar prices and inventory, just to give you a recap, In the previous season, the sugar production was estimated to be 31.1 million metric ton. After accounting for ethanol diversion of 3.1 million ton and domestic consumption of 28.3 million metric ton and exports of 0.7 million ton, closing sugar stocks are expected to decline to around 4.3 million metric ton, compared with 5.3 million metric ton in the previous year. Probably this is what has led to the recent spike in sugar prices that you may be observing. The opening inventory for the next sugar season will be lower, and the tighter supply position is probably dictating the higher prices of sugar. Indian sugar prices have risen 10% over the past month to record highs. Prices in Uttar Pradesh are currently at 4,860 to 4,920 rupees per quintal. With Maharashtra also registering reasonably high prices. With festival demand expected to gather pace, the pricing environment is expected to support sugar realizations. The global sugar market has also remained supportive with prices at around 16.6 cents per pound, close to their highest levels in over a year. This reflects the expectations of tighter global availability, particularly following lower production in Brazil, and increased diversion of keene towards ethanol. As regards our ethanol business, the realization the prices continue to be static and therefore they weigh on the margins. However, we remain optimistic about the sector's outlook and expect the government to consider a price revision in the near term. As I have been mentioning in the previous calls, we continue to evaluate inorganic growth opportunities of our businesses. We also continue to adopt digital solutions across businesses to improve efficiency and streamline our work processes. Which brings me to the end of my address for the current quarter, and I now invite my CFO, Jatin Jain, to take you through the financial results of the company. Over to you.

Thank you, sir. Thank you, everyone, and good evening, everyone. I will begin by providing a review of Zawari Industries' performance. On a standard-known basis, the company reported total income of 283.9 crores in Q1 financial year 27, registering a 26% year-on-year increase, primarily driven by higher sugar sales volume, supported by increased domestic quota allocation and improved realization. EBITDA stood at 31.3 crores compared to 36.9 crores in Q1 financial year 26. Profit before tax, before exceptional items, stood at a loss of 4.4 crores for the quarter compared with a profit of 0.9 crores in Q1 financial year 26. And profit after tax stood at a loss of 9.5 crores compared with a loss of 3.9 crores in the corresponding quarter of the previous year. The average cost of borrowings declined by 56 basis points year on year to 9.73% in Q1 financial year 27 from 10.29 in Q1 financial year 26. On the consolidated basis, total income stood at 327.5 crores in Q1 financial year 27, resisting a 22% year-on-year increase from 267.6 crores in Q1 financial year 26. Consolidated EBITDA stood at 29.8 crores during the quarter. Profit before tax, before exceptional items stood at a loss of 5.4 crores compared to a loss of 0.4 crores in the last corresponding quarter of the previous year. And consolidated profit after tax stood at a marginal profit of 0.05 crores compared with a loss of 0.48 crores in Q1 financial year 26. Finance costs have declined by 1.46 crores year-on-year to 61.5 crores from 63 crores in Q1 financial year 26. The company continued to benefit from improved operational efficiencies, disciplined financial management, and reduction in borrowing costs during the quarter. In respect of our updates on our subsidiaries, one of our major subsidiaries is Wari Info and India Ltd. Q1 financial year total income grew by 25% year-on-year to 33.9 crores versus 27.1 crores in Q1 financial year 26. Q1 financial year 27 EBITDA improved to 24.6 crores from 21.7 crores in Q1 financial year 26. Profit before tax stood at a loss of 0.7 crores as against a loss of 1.5 crores in the corresponding quarter of the previous year. For Simon India Ltd., our total income stood at 11.7 crores compared to 15.9 crores in the corresponding quarter of the previous year. For Zwari FinServ Ltd., our total income stood at 4.1 crores as compared to 5.9 crores in the corresponding quarter of the previous year due to decline in the market. Similarly, for our broking business, Zawari Insurance Broker Limited, gross return premium for Q1 financial year 27 reached to 20.8 crores from 33.3 crores in Q1 financial year 26. Brokerage income for Q1 financial year 27 stood at 3 crores compared to 3.8 crores in Q1 financial year 26. And EBITDA stood at 2.2 crores in Q1 financial year 27 versus 3.2 crores in Q1 financial year 26. Thank you, Darshan. Thank you.

We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on the touchtone telephone. If you wish to remove yourself from question queue, you may press star and 2. Our experts are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Somersha from Paris Investments. Please go ahead.

Yeah. Hi. Thanks for the opportunity. So, as we mentioned, repatriation of profits have started to come from our Dubai project. So, can we have some rough estimates? How much are we expecting in the current quarter and how much in December quarter?

Yes. So, we have in the current quarter received 55 million dirhams, which in Indian rupee terms translate to 142.58 crore. And we had projected that we will receive 900 crore, up to 900 crore in the current financial year. And I should say that we are on track to receive the balance amount.

Okay. And everything should be completed by December quarter, or you feel that there might be some delays?

I think we have always given a guidance that we should expect to complete a repatriation of about 900 crores in the current financial aid.

Okay. Okay. And are we facing any, I mean, just to understand, are we facing any challenges with respect to this project? I mean, buyers backing out or asking for discounts, considering the current geopolitical issue?

No, we are not facing any challenges whatsoever so far.

Okay, okay. And so, once we pay off this 1100-odd crores of debt, so how much reduction in interest cost we can have in FY28?

So, you can calculate it, actually. What is our average cost of borrowing? Our average cost of borrowing is 9.73%. So, considering a reduction of 1100 crores in our overall borrowing, we can see a decline in our finance cost.

Okay. Okay. So, at least 100 to 110 crores, we can see reduction. Okay. Okay. And so, if I may ask one more question. Yeah. Yeah. So, what is the idea behind buying shares of Zewari International and paying them 150 crores? And by when we can complete this transaction?

This transaction, like, it will be completed in one or more tranches. So, we have taken an ICD approvals, and the strategy behind this transaction is that we want to consolidate the investments which are there in our different companies at the holding group level.

Okay. Okay. It's very, very simple and straightforward.

You know, we are consolidating all the investments into the main holding company, which is VAR Industries. Historically, this investment was lying, some of it was lying in Izwari International, some of it is lying in Izwari Management Services. So, the idea is to bring everything in Izwari Industries, which is the main listed entity. And it will also help, you know, these transactions, deleverage those entities, whatever debt they may be carrying, they will use these to settle their external debt.

Okay, okay. And, sir, just to confirm on your opening remarks, you mentioned we will be receiving this 250 or crore from Zuhari Agro in the current quarter?

That's what we are expecting.

Okay. Okay, that's it for my day. Thank you and all the rest.

Thank you.

Thank you. The next question is from Malayna Gunjan Modi, an individual investor. Please go ahead.

So, the first question was regarding the recent super price spike which you just mentioned. So, also we heard some rumors about government problems, some policies regarding transferring that to ethanol sector. I think some views around that. So, any comments on that? How are we hosting that to impact our financials?

As a policy, we do not comment on rumours, you know, and it's a question of previous government policy. As and when formal policy is announced, we will take a stand.

Okay. Second question was regarding the previous participant mentioned about Zohari Agro. We heard of a filing from Zohari Agro that they are looking for six-month extension on 95 crore ICD. Are you planning to approve that, and do we foresee that?

So, we are expecting, as I mentioned earlier, the entire 258 crore outstanding debt to be repaid to us in the current quarter.

So, there is no extension as per the pilot, which was made as well.

I think what really matters is that we expect to get repaid, and that is what is absolutely important for our industry.

Perfect. Any plans further to increase our internal production given the books we have till October and all the books we have? Do we see anything or are we, I think, for any vendors right now from agencies?

Can you repeat the question again, please, and which entity are you talking about?

I am talking about the Indian and the ethanol business in the RFD sector. This is regarding the order book which we have till October. Do we still see any tenders coming up from OMC and are you planning to participate?

Absolutely. We are expecting the next round of tenders to come sometime in October, and the company will be certainly participating in that round of OMC round.

Thank you.

Thank you. A reminder to all the participants, you may press star and want to ask a question. The next question is from the line of Sohani Singh from ROS Company. Please go ahead.

Hi, sir. Good afternoon. Good afternoon. So, I have a few questions. If management were to rank its business by expected value creation over the next five years, how would you prioritize sugar and ethanol, real estate, engineering services, and strategic investments such as ZACL and TIHL? And what KPIs should investor attract for each segment?

As we have been mentioning in our previous calls, these strategic investments are going to continue in our portfolio. You notice that they are in strategically important sectors of the Indian economy. Primarily, our investments are in fertilizer and railways. And as prudent analysts, you must be seeing the performance of these companies and participating in their investment calls as well. So we will continue to hold our strategic investments for sure. As far as Wari Industries is concerned, we certainly are quite long on real estate, as well as engineering and construction. But I think in terms of the growth opportunity, we definitely see opportunities in real estate much more than engineering and construction. Engineering and construction is still a fledgling business. My sense is that in the longer term, that will also grow, but it's the real estate which will provide the momentum. On the sugar side, we are now operating a facility at 100% capacity utilization. It has demonstrated robust performance, and while we hope to continue our performance in the ensuing season, We remain open to the idea of acquisitions should they present themselves. So tomorrow, let's say, if an opportunity comes and we find it worthwhile, you know, there could be some additions to capacity. Otherwise, the growth vectors will come from real estate and engineering and construction. I have mentioned in the past as well that ethanol used to be a stated objective, And we have placed on record that our objective is to grow the ethanol business 2000 KLPD. We had to take a pause because of the substantial overcapacity that came to light during the last tenders. Against the 1,050 crore of tenders, 1,800 crore worth of offers were received. So obviously, we have put our CAPEX plans on hold. But tomorrow, if the country decides to roll up, you know, the policies and increase ethanol blending and we have flex fuel vehicles and whatnot, I think, you know, we again can see whether we want to grow our business both organically and inorganically.

Okay, so that helps. So, the standalone revenue grew 27% year-on-year to 266.5 crores, but the operating EBITDA declined from 22.4 crores to 13.9 crores. So, if you could help me, what were the key drivers of margin compression despite the strong revenue growth?

Yeah, I drive you in terms of the major hit in terms of our margin is the 8% increase in the SAP sugarcane prices. So, government of UP in the last financial sugar season, they have increased the prices of sugarcane from 370 rupees per quinter to 400 rupees per quinter, which has impacted our margin profitability.

That helps. And, Sugar, segment revenue increased 34% year-on-year to 236.8 crores, yet the segment profit declined to 8.4 crores from 12.3 crores. So, if you could explain the factors impacting profitability, including gain costs, recovery rates, or inventory movements.

So, as you can see, in terms of our increase in our revenue, if you see, on an year-on-year basis, our revenue has jumped from 176 crores to 236 crores. So, the major driver is that we have got a higher quota allocation from Government of India. In this current quarter, we have sold additional 1 lakh quintus of sugars, which has bring in an additional revenue of 45 crores to the company. And on account of our segment results, our segment results have fallen from 12.29 crores in the last financial years to 8.36 crores. The major driver which is impacting our profitability for the sugar business is the increase in our gain cost. That has happened in the last sugar season.

Okay, so that's right. One has a question. The consolidated part was also 0.05 crores despite high revenue. And excluding associate income and exceptional items. So what is the sustainable earnings profile of the core businesses over the next 12 to 18 months?

Sustainable, in terms of sustainability, as we have highlighted earlier, that there will be repatriation of 1100 crores in this current quarter.

No, she is talking about the operating performance of the three segments, which is sugar, power, and ethanol. So, her question is about sustainability. Will you be able to sustain these numbers, et cetera, et cetera? So let me respond to it. As I mentioned earlier, the segments that you see will again come back into action as we start the next season. Our operating performance has been very robust in the previous season, and there is no reason why we should not repeat that performance, if not better it. The good news is that the prevailing prices of sugar are quite high, and it's easy for anybody to do some math around what would it do to the numbers of sugar companies. We also hear that the sugarcane crop, particularly in Uttar Pradesh, is doing quite well. So we look forward to fairly decent quarters ahead.

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

Thank you. Thank you.

Thank you. The next question is from the line of Shadeesh Sharma from Pree Hoon. Please go ahead.

Yeah, good evening, sir. Can you hear me?

Yes, please.

Sir, I was going through the circular you come up with at the time of results, Whereby you mentioned that, you know, you're going to buy the shares of Tesmato and Fra and Zeware Gro. Last time, when you did the same from Zeware International for Tesmato Rail, you bought the share at $190,000 and the share price has gone to $105,000 now. So, what is the logic of doing all these things when you're losing money and migrating our money, shareless money to other companies? It doesn't go with the proper assets of the company. Can you clarify what you're doing with that?

See, the last transaction did not go through. It was an enabling approval that was taken, but there was no actual transaction that took place. As I mentioned earlier, it is part of a strategy to consolidate all listed equity investments in the main holding company. And as it happens, under the laws of the land, these transactions will be at market price. And the share prices then, of course, post-acquisition would depend on the performance of those companies. So just to reiterate the old transaction that you mentioned, there was an enabling resolution, but no transaction actually took place. And this time, as and when we do the transactions, I think you will get to know. So, again, formally, we will notify everybody, and we will consolidate everything in the holding company.

What is the benefit of the shareholder of the VOR industry? What is the logic? Already, that is, its holding is there in VOR industry, which is, again, our subsidiary only. So, what is the logic towards the shareholder of our company?

The logic is that it should be in the main listed company, and the listed, unlisted company may have some external debt That can be repaid as a result.

But when I brought a photo, my main question was, when we tried to do the same with TestMaker here, the share price went down from $190 to $190.

As I explained earlier, the transaction has not gone through, therefore there is no point talking about it.

Okay. Thanks a lot.

Thank you. The next question is from the line of Samil Shah from Power of Investments. Please go ahead.

Yeah, hi. Thanks for allowing me a follow-up. My question is on the furniture division. So, I think we are still having losses in this division. So, are we looking to dispose it off? Any value we can generate through that?

I think right now, whatever you see, the losses coming from that division are on account of the small little expenditure on a handful of people that have been deployed, some expenditure on maintenance, and some ICDs that they have got to service those ICDs. Other than that, there's no other expenditure that one is incurring in the furniture division. We have been talking to people who could potentially revive that business. If something works out as part of the revival plans, we will revive it. But otherwise, we will make some decisions about this business by the end of this financial year.

Correct, correct. That's it from my side. And so just the feedback, so really appreciate since last few quarters, we have been doing quarterly call calls, and we can see management's intent towards shareholder value creation.

Absolutely, and you will see that in coming quarters as well, you will see that in coming quarters.

We have enormous, I mean, value sitting inside industries and all of our group companies, but still we are not able to, you know, fully value it. So, thanks for doing all the quarterly calls and all, and we look forward for them. Thank you. Thank you.

Thank you. A reminder to all the participants, you may please start and want to ask questions. The next question is from the line of Soumya Raghavanshi from Nirvana Securities. Please go ahead.

Good evening. Thank you so much for the opportunity. I just have two questions from my head. Firstly, sugar realization improves to 4,116 per quintal, and sales volume goes to 4.7 lakhs quintals. What is your outlook on domestic sugar pricing and exports for FI27, and how sensitive are earnings to changes in sugar prices?

I have already dealt with the pricing issue in my comments, and I mentioned that while the prices have been somewhat muted in the first quarter and they were not commensurate with the rise in input prices, the current prices are significantly higher, and I also outlined the reasons. Of course, the financials of the company are very sensitive to prices. As far as exports are coming, currently the exports are not allowed. So we don't foresee that in the current situation, exports will be permitted. And I think we are looking forward to a decent quarter on the back of the current prices.

Okay, sir, got it. Sir, ethanol sales increased only marginally despite capacity availability. Are there any constraints related to feedstock allocation, government planning policies for procurement by OFC?

No, there is no constraint from the government side. And whatever ethanol, whatever molasses we produced, we have consumed to making ethanol. Historically, we have bought molasses also from outside opportunistically. But this year, the prices of outsourced molasses was not economical. And therefore, we decided not to pursue those purchases and make ethanol. And that's why you see the numbers as they are. But tomorrow or in the next season, if you find that, you know, we have an opportunity to buy and produce, we will do that. And we have also be mindful of the fact that, you know, before that, there will be a tender process and there will be an allocation, et cetera, et cetera.

Okay, so my next question is on sugar division. The sugar division operated for only six days during the autumn. What are your expectations for cane availability and crashing days in the upcoming season, particularly in Uttar Pradesh?

We can't speak about Uttar Pradesh as a whole. As I mentioned a short while ago, in our command area, the sugar cane crop seems to be maturing quite well, And we are expecting a very healthy cane production, subject to weather holding up and not creating any difficulties, weather or disease. These two factors always bother us. So if there are no unusual weather events or an outbreak, disease outbreak, we expect a robust cane production in our command area.

All right. So last question from my end. The company disclosed a potential Uttar Pradesh ethanol import-export pass, fee exposure of about 507 lakh, but has not made a provision. Can you discuss the legal position and potential downside risk if the case is not resolved favorably?

So, this is the case which has been there for all the sugar mills are being against this case with the court. So, we have not created the provisions, but we have given an indemnity, and the court cannot make a retrospective change in the law, bringing in an effective adjustment that you pay and export fees for the ethanol that you export out of Ustapras. So, we are very hopeful that it will not come as a provision in my books of accounts going forward. Because law cannot be made retrospectively. It has to be made prospectively.

Okay. So, all right, all right. That's it from my side. Thank you so much, sir.

Thank you. The next question is from Rinal Jinder Kumar, an individual investor. Please go ahead.

Hello. Thank you for doing me. Yeah, thank you for giving me an opportunity to talk in this call. My first question is on the monetization of land holding by URA Industries and URA Agrochemicals in Goa. And the second question is on the mining sector, like URA Industries and its subsidiaries, namely URA Agrochemicals and Tex-Naco. So, want to enter into mining business. So can you throw some light on these two?

I can only speak about Zouari Industries, and I can only speak about the land monetization matter of Zouari Industries. Let me clarify that Zouari Industries has no intention or has had no intention in the past and has no current intention of getting into mining. So coming back to the land monetization, yes, it was a part of our strategy for deleveraging the company. But the Gujarat, the Goa Assembly passed a law which came in the way, and the circle rates were also enhanced very, very substantially, making these kind of deals very, very complex and challenging. So, for the time being, I think all land monetization plans, as far as Goa is concerned, is put on hold, while we are using all other avenues to deliver ourselves, primarily through the repatriation of profits from Dubai, as well as repayment of loans from the associate company, Zawaria Group.

Okay. Thank you, sir. One more question regarding the reverse measure of consolidation along the subject area. So, when can we expect this to happen?

Currently, we are not thinking of consolidating any of our subsidiaries in Zawari Industries Limited. We are managing majorly our focus is on our real estate business and the ethanol business that we do it through Zawari India. And some little other subsidiaries which provide us a marginal profit to the holding company. Currently, we don't have any plans to consolidate our subsidiaries in the main holding company.

Okay, sir.

Thank you. The next question is from the line of Yashweta from Escape Capital. Please go ahead.

Good afternoon, sir. Thank you for the opportunity. So, I've got a few set of questions. So, firstly, like the company highlighted, digitalizations and AI-led initiatives within So, can you quantify the expected impact on project execution, timelines, manpower, productivity, or the bidding efficiency over the next few years?

These are too early, actually. Honestly, if you ask this question to any CEO, they will find it very difficult to answer. I think these are early days. We are experimenting and implementing various tools. I think, you know, we still have to implement quite a few of these tools, only when we will have a sense of, you know, how much is the impact and quantification of impact would be possible. So that's the short answer that I can give. Philosophically speaking, what are we trying to do in Saim India? The engineering work is very, very labor intensive. Let's say you deploy so many thousands or hundreds of engineering hours to, let's say, produce a drawing. We are wondering whether by using digital tools or artificial intelligence we can compress that time. Now, at this stage, I can't quantify and tell you that, you know, in this project we did this, et cetera, et cetera. So number of experiments are currently underway, and the initial results appear to be quite encouraging. And hopefully, you know, in the next few quarters or maybe next year sometime, I'll be able to happily share with you some very good use cases of how we saved so many engineering hours on a particular project.

Understood, sir. And also, like the given government continued push for ethanol blending, so are there any plans to expand your distillery capacity or shift to some feedstock mix or increased participation in higher margins ethanol categories?

Right now, you have a situation where there is significant overcapacity. As I mentioned earlier, the last tender that came against an order of 1,050 crore litres, the offers that the government received was 1,800 crore litres. We understand that the actual capacity may have gone up a little higher, and maybe it's 2,000 crore liter. So you really don't want to increase capacity in that environment unless there is a significant increase in blending percentage. And we are waiting for the government. They have announced higher blends, 35 percent and even 100 percent, and there have been a couple of vehicle launches. There's also, but there is, you know, no real increase in the demand for ethanol as far as OMCs are concerned, and it will all be tested and proven when they come up with the new tenders in the month of October. So I think it's just a couple of months away, and we will see the tenders coming in, and we will know the numbers, and then we can plan accordingly if we see that the government is keen And the demand for ethanol is increasing very substantially, and there is an undercapacity, then we will invest. Of course, we are now people with reasonable experience in the sector, and we can set up distilleries, we can buy distilleries. But we will have to wait until we see clarity on the demand side.

Got it, got it. And also, your other expenses declined substantially on a QOQ basis. So, was this primary seasonal? And, like, what is the normalized quarterly run rate investors should model going forward? Yes, sir.

So, our other expenses remain in the range of 14 crores. 14 to 15 crores every quarter because this is a period during which we do repair maintenance for our sugar division.

No, no. Is there a difference between Q4 and Q1?

Q4, the other expenses are on a higher side because

it

is a pure operating period. During that, sugar has operated for 90 days. And during this Q1, our other expenses are in the range of 14 crores. During this period, we majorly do the repair and maintenance for our sugar

And on a year-on-year

basis, if you see, last year, this number was 14.46 crore for the same quarter, Q1. They said it is 14.36 crore. So, it's practically the same.

Understood, sir. And just the last question from my end. So, the unallocated income also increased to 13.7 crores from around 8.1 crores year on year. So, like, what are the major contributors, and are these levels likely to continue in upcoming quarters?

The income which has increased on account of our unlocated is the ICDs income that we have given to our group companies. So ICDs that we have given to our group companies, and also the difference is that our expenditure on our other divisions for our defensive business and investment businesses have reduced. So net of our unlocable income has increased, net of unlocable expenses.

Okay, sir. Got it, got it. Thank you so much.

Thank you. The next question is from the line of Payal Sharma from DD Capital. Please go ahead.

Hi, sir. Thanks for the opportunity. I have a couple of questions with me. So, my first question is, like, associate and JV income contributed 43.7 crore per cent, like, 343.7 crore during the quarter. So, could you please help us understand the key contributors to this income and also how sustainable do you believe these earnings are going forward?

So, the key contributor in our share of profit from associates is from Zawari Agro Chemicals, Zawari Agro Chemicals Limited.

Let me try to rephrase what Jatin has said. The bulk of this item is coming from the performance Zawari Agrochemicals Limited. Zawari Agrochemicals has a joint venture with OCP Morocco called ZMPPL, and ZMPPL holds equity in paradigphosphates. So the underlying asset is really paradigphosphates. Its performance, reported performance for the previous quarter was 392.5 crores of PAD, which has been consolidated in ZMPPL and has flowed back to Zawari Agrochemicals.

Understood, sir. Understood. And the next question is, like, with handovers now underway at St. Regis Residency, Dubai, like, what proportion of the project receivables is still outstanding? And also, how much cash, like, repatriation should investors expect over the next four to six quarters?

Thank you. So as far as the balance payments to be made by unit holders, I would request my Alok Banerjee to just clarify. Alok, if you are there in the call, can you please provide this answer?

Yeah, like, hi, good afternoon. So, since we have received a 100% building completion certificate, we are now starting to hand over the units to the residents who have purchased. And as Mr. Arthur has said earlier, that we expect that in this financial year, the balance about 800 crore should come in by the end of the financial year.

No, that's what I've given already, Alok. The total amount estimated in this year is 900 crore, of which 142 has come, and 758, let's say, will come by the end of this year. That clarity everybody has got. What she's asking is a little different. What is your payment plan, and how much more do you need to collect from the buyers, like apartment buyers? That's what she's asking.

Yeah, we need to collect roughly another about, or our share.

In terms of percentage?

On percentage, we need to collect about 40% more.

40%?

40% of the top line.

Yes, so we need to collect 40% to 45% of the customer's collection. In terms of our payment plan, the payment plan is 50-50%. So now we have raised the demand notes to the customer post receipt of the completion certificates. So we expect to receive the money from the customers in this current quarter.

Understood, sir. Understood. And the last question is that the real estate segment has seen a significant increase in segment assets,

So, in terms of our segment assets, segment assets for our real estate division as on 30 June 27 stands at 770 crores, which basically comprise the receipts from our Dubai projects of 400 crores. So, in the next one to two quarters, majority of our segment assets for our real estate divisions will come, and the actual realization of that cash will happen in this current financial year.

Understood. Thank you so much, sir. And I'll give it.

Thank you.

Thank you. The next follow-up question is from the line of Samuel Shah from Paris Investments. Please go ahead.

Yeah, hi. Just one question, sir. Can you throw some light on Zuhari Infra? So, how are we looking to expand this business, any more DM projects and our pipeline? Because I think a few quarters back we mentioned to increase this to 10,000 crores. So, can we have your views on the same?

Alok, you want to take this question?

Yep, okay, I'll do that. See, what we already have is an order book of about 6,000 crores, roughly. And we are now in the process of launching the project in Hyderabad and Bangalore in the next month. And once we launch and we see the success, we have quite a few deals in the pipeline, which will then fructify. As of now, we are focused on getting these projects off the ground. And thereafter, you know, we will be able to close out on further projects in these two cities, which is our focus area.

If I may add, I think the gross development value of the projects, Alok, that you have in hand is 4,900 crores. And we did mention that our aspiration is to have a GDV of 10,000 crores. So one can say that we are halfway in that journey. You know, 50% of their journey is covered. The route that we have taken, which is the asset-light, investment-light approach of DM model, is a difficult and challenging route. One has to find the right kind of people with whom our brand can be associated, and the project should also be bankable projects with good prospects. So it is not easy to just grow it because we are not simply buying land and launching projects. So the bottom line is that we are halfway there. As Alok mentioned, we continue to scout for opportunities, particularly in South India for DM projects. And our aspiration is to go to 10,000, as I mentioned earlier.

Correct, correct. And the Bangalore project which you mentioned is the plotted development one?

Yeah, it is.

And that's a very interesting project. It's about 15-acre plotted development with RERA approvals in place. And what Alok tells me that, you know, it should do reasonably well.

Okay. And generally, this plotted development should complete faster, right?

Yes, yes.

Okay. So, by when we can expect to complete that project?

It takes a cycle time of about 15 months from the date of launch.

Okay.

15 to 18 months. Unlike a regular apartment project, it will be 3 to 4 or 5 years. Okay.

Okay. Fine. That's it on my side. Thank you.

Thank you. Ladies and gentlemen, as that was the last question for the day, I will now hand the conference over to Mr. Arian for closing comments. Over to you, sir.

Thank you.

We really appreciate our wish to reach out to us at MUFG Investor Relations. Thank you.

Thank you. On behalf of the management, I would like once again to thank all the investors, analysts, and potential investors who have joined the call today. We really appreciate your questions, and we look forward to interacting with you in the next quarter.

Thank you. On behalf of Suwari Industries Limited, that concludes this conference. Thank you for joining us, and you may now disconnect the lines. Thank you.