Modi Naturals FY26: Guidance met, ethanol platform built, scaling next

Modi Naturals closed FY26 with a step-up in profitability and a clearer three-vertical identity across Consumer, Bulk, and Ethanol. Consolidated revenue from operations rose to 719.2 crore, up 8.5% year on year. EBITDA increased faster to 73.5 crore, up 31.2%, taking the EBITDA margin to 10.2% from 8.4% in FY25. Reported PAT grew to 50.3 crore, up 62.1%. The company noted that PAT includes a 4.9 crore insurance claim received towards loss of profit related to an ethanol plant machinery breakdown that occurred in FY24.

Management described FY26 as an inflection point. The key message was that several multi-year initiatives, including working capital tightening and ethanol capacity expansion, have started showing up in financial metrics. ROCE improved to 19.9% from 18.3%, net working capital days reduced to 62 from 66, and operating cash flow rose to 61.1 crore from 48.8 crore.

The year in numbers and what changed

FY26 was not a high-growth year on the top line, but it was a meaningful profitability year. Q4 FY26 was particularly strong, with revenue rising 28.0% year on year to 243.1 crore and EBITDA rising 51.8% to 24.5 crore. PAT for the quarter was 19.7 crore.

Two factors stood out in the reported results. First, finance costs reduced meaningfully on a year-on-year basis, and the company ended March 2026 with lower leverage metrics compared to the prior year. Second, the ethanol division continued to carry the consolidated margin profile, while the company worked on operational discipline in bulk oils and steady traction in the consumer portfolio.

Note: FY26 PAT includes 4.9 crore insurance claim related to an FY24 ethanol plant interruption.

Segment picture: ethanol drives, consumer builds, bulk stabilises

Ethanol remained the largest and most profitable division. FY26 ethanol revenue was 337.4 crore, and EBITDA was 58.2 crore, implying an EBITDA margin of 17.3% for the year. The company highlighted that ethanol capacity expanded from 130 KLPD in FY24 to 282 KLPD in FY26, and that Phase II started commercial operations towards the latter part of FY26. In the earnings call, management said the expanded facility’s benefits should become more visible from FY27 as utilization levels improve and operations stabilize.

The company also disclosed demand visibility. The investor presentation stated orders worth 400 crore for about 47.9 thousand KL from OMCs. In the call, management explained that the order mentioned was from cycle one tender of PSU OMCs for the ongoing ESY, and that the company is now registered with private OMCs and expects to participate in their tenders as well.

In the consumer division, FY26 revenue was 183.5 crore with EBITDA of 15.2 crore, translating to an 8.3% margin. Management stated on the call that food products contribute roughly 10% of consumer division revenue, with the balance coming from the oil portfolio. The company pointed to improving brand recall, product acceptance, and distribution reach across general trade, modern trade, e-commerce and quick commerce, and the army channel.

The bulk division delivered FY26 revenue of 198.3 crore and EBITDA of 2.6 crore. While profitability is modest, management framed bulk as a stability vertical and emphasized process improvements. The presentation highlighted the adoption of a lean inventory model and procurement strategy to respond better to commodity price movements and reduce working capital intensity.

Strategy and execution: scaling with discipline

A notable element in management commentary was a focus on disciplined capital allocation. The company disclosed that it shut down one solvent extraction plant at Pilibhit (UP) because the facility was not aligned with long-term profitability and operational efficiency objectives. The move was positioned as part of asset productivity improvement rather than growth at any cost.

On capital spending, the company stated it does not have any large capex planned for the year, except for up to 20 crore to be invested in a value addition project in the ethanol division’s byproduct stream. This matters because FY26 already saw heavy balance sheet deployment into plant and equipment as ethanol capacity expanded. A lower capex year, if accompanied by stable utilization and working capital discipline, typically improves cash generation.

The call also provided color on how the consumer business is being built. Management described a shift in marketing approach toward digital and OTT platforms, citing that targeted advertising can be segmented by geography and demographics. It disclosed an advertising spend of 12 crore for the year, and said a typical split is about 60% on external advertising and 40% on quick commerce.

Distribution metrics in the presentation cited 450-plus distributors, direct reach of 50,000-plus retail stores, and presence in 3,000-plus modern retail outlets. In the call, management estimated channel mix at about 50% modern trade, 40% general trade, and 8% to 10% from the army channel, while also stating that e-commerce and quick commerce are ramping up faster for the category.

FY27 guidance and what to watch

The company provided explicit FY27 guidance: revenue of 925 to 965 crore, EBITDA of 100 to 105 crore, and PAT of 66 to 70 crore. In the earnings call, management clarified that these numbers factor in only about 50% utilization of the expanded ethanol capacity, framing the guidance as conservative. It also reiterated that long-term sustainable ethanol EBITDA margins are expected in the range of 12% to 15%, while acknowledging that some quarters may beat that range.

For investors tracking execution, the key variables are straightforward. Ethanol utilization ramp-up is central, especially as the company itself discussed the sector risk of overcapacity and underutilization. The second variable is whether consumer division growth accelerates meaningfully beyond FY26’s low single-digit growth, supported by distribution expansion and new product traction. Finally, bulk oils remain a working-capital and cash discipline story rather than a margin story, and the company’s stated lean inventory model suggests management attention is on efficiency rather than scale alone.

Modi Naturals enters FY27 with improved profitability metrics, a commissioned ethanol expansion that has not fully reflected in FY26 numbers, and stated intent to scale across all verticals with tighter capital discipline. The credibility marker in this cycle is that the company stated it achieved its FY26 guidance, and it has again set out quantified guidance for FY27.