Kotyark Industries FY26: Strong profitability despite low utilisation, with expansion-led optionality

Kotyark Industries reported FY26 total income of INR 314.92 crore, EBITDA of INR 47.94 crore, and PAT of INR 19.36 crore. The year was notable because the company delivered these numbers while operating at low capacity utilisation of about 7 to 8 percent, as stated in the management commentary. That mismatch between installed capacity and actual throughput is the central story in the presentation. Kotyark has built scale early, and now needs consistent offtake and execution to convert capacity into sustainable volumes.

The company positions itself as a pure-play biodiesel manufacturer with a flexible, multi-feedstock platform. It states it can process about 10 to 15 raw materials depending on seasonal availability and procurement economics. Manufacturing is supported by two facilities, Sirohi in Rajasthan and Anand in Gujarat, and the presentation highlights an integrated process that produces B100 biodiesel along with crude glycerin as a by-product. Management also stresses that its plant and manufacturing infrastructure were internally conceptualized under promoter supervision, with an emphasis on process customization and throughput optimisation.

Business mix: OMC dominance is easing, but tender cycles still matter

Kotyark operates across OMCs, bulk buyers, and retail. The segment split slide shows that OMCs contributed 90 percent of revenue in FY25, falling to 70 percent in FY26. Others, defined as bulk buyers and retail, rose from 10 percent to 30 percent. This is an important directional change because the company itself flags that tender cycles can affect earnings. A broader customer base can reduce revenue volatility, but the document does not provide separate revenue or margin numbers for each channel.

The presentation also explains the OMC bidding process, from tender announcement to allocation sheets and supply execution. This reinforces that a meaningful portion of sales is dependent on periodic tender outcomes, depot allocations, and logistics feasibility. The customer list includes IOCL, BPCL, HPCL, along with Modern Insulators Ltd and Edizel Biofuels Ltd.

Capacity scale-up: expansion completed, utilisation ramp is the real lever

One of the biggest disclosed moves is the proactive capacity expansion at the Rajasthan facility from 500 KLPD to 1,500 KLPD. On the capacity slide, the Rajasthan unit is shown at 1,500 KLPD with current utilisation of 5 to 6 percent, while Anand, Gujarat is shown at 100 KLPD with utilisation of 30 percent. Management expects utilisation to improve gradually over the next 2 to 3 years up to 60 to 70 percent, driven by stronger participation in OMC tenders and expansion across industrial and retail channels.

The company also discloses upcoming facilities in Jhajjar, Haryana and Kanpur, Uttar Pradesh. Each is planned at 200 KLPD, with expected timeline of December 2026. Capex requirements are stated as about INR 29 crore for Jhajjar and about INR 26 crore for Kanpur, with financing through internal accruals. The 3-year roadmap links these projects to strengthening North India presence and supporting rising OMC and industrial demand.

By-product economics and ESG: glycerin and carbon credits add optionality

Kotyark highlights crude glycerin as a meaningful by-product of biodiesel production. The presentation states that about 14 litres of crude glycerin are produced per 100 litres of biodiesel, and the company has annual crude glycerin capacity of about 63,000 KL. It also states that a glycerin processing pilot plant was commissioned in 2023. The FY28 roadmap priorities explicitly include glycerin value enhancement, improving processing efficiency, and expanding supplies to pharma and personal care sectors.

On ESG positioning, the company states it earned 57,874 carbon credits between September 2020 and March 2022, and in 2024 became the first Indian biodiesel company to receive Verra carbon certification. The slides discuss carbon credit monetization in general terms, explaining how credits could be generated and sold through exchanges, brokers, or bilateral deals. While there is no quantified future revenue guidance from carbon credits, the document frames it as a high-margin, sustainability-linked opportunity that could scale with biodiesel volumes.

Financials: steady FY26 growth with a strong Q4

The income statement shows FY26 revenue of INR 314.87 crore versus INR 288.10 crore in FY25. EBITDA increased to INR 47.94 crore from INR 42.65 crore, with EBITDA margin at 15.23 percent compared with 14.80 percent in FY25. PAT rose to INR 19.36 crore from INR 14.53 crore, and EPS increased to INR 18.26 from INR 14.08.

Q4 FY26 stands out with revenue of INR 63.66 crore versus INR 19.86 crore in Q4 FY25. EBITDA in Q4 FY26 was INR 19.14 crore, and PAT was INR 9.38 crore. The quarterly margin profile is also higher, with Q4 FY26 EBITDA margin at 30.07 percent.

The key metrics section shows net worth increased to INR 180.73 crore in FY26 from INR 162.12 crore in FY25. Net debt to equity improved to 0.36 in FY26 from 0.42 in FY25.

Outlook and what to track

Management provides explicit medium-term aspirations. It targets EBITDA margins of about 18 to 22 percent in the next 3 years and revenue CAGR of about 25 to 30 percent over the next 3 years. The bridge to those targets, as per the presentation, is utilisation improvement, operating efficiency, and greater contribution from value-added products.

Order visibility is presented through a current order book and pipeline. Kotyark discloses an order book of about INR 50 crore from OMCs and about INR 30 crore from other parties, with a 3-month execution timeline. It also mentions an estimated pipeline of about INR 200 crore of orders under discussion from OMCs with expected conversion timeline of 3 months, and an additional pipeline of about INR 15 crore from telecom, infrastructure, and FMCG companies for biodiesel supply and industrial fuel applications with execution timeline in Q1 FY27.

The key risk, also acknowledged by the company, is that current utilisation is far below installed potential and earnings remain sensitive to tender cycles and procurement timing. On the other hand, the presentation makes a clear case that multi-feedstock flexibility, expanding channel mix, glycerin monetization, and ESG credentials can support a more resilient business model as volumes scale.

In summary, FY26 shows a company that has built capacity and infrastructure ahead of demand realisation. The next phase will depend on execution in OMC participation, industrial penetration, and consistent utilisation ramp. If Kotyark delivers on its stated 60 to 70 percent utilisation trajectory over the next 2 to 3 years, operating leverage could become the dominant driver of financial outcomes.