/** blogpostTitle: Nava Limited FY26: Strong operations, accounting-led volatility, and a busy project pipeline */

Nava Limited FY26: Strong operations, accounting-led volatility, and a busy project pipeline

Nava Limited closed FY26 with revenue growth, strong operating profitability, and a record standalone profit, even as consolidated PAT declined due to tax and deferred tax movements in Zambia. For FY26, consolidated total income rose to INR 4,478.7 crore, up 8.3% year-on-year, supported by higher ferro alloy volumes, incremental energy revenue from Maamba Energy Limited (MEL), and higher volumes in the Indian power business. Consolidated EBITDA stayed robust at INR 1,905.2 crore, though it declined 4.1% YoY and the EBITDA margin moderated to 42.5% from 48.0%.

The bigger headline was the drop in consolidated PAT to INR 1,038.6 crore, down 27.6% YoY. Management attributed this largely to accounting-led tax adjustments at MEL and a deferred tax liability impact linked to a sharp appreciation in the Zambian Kwacha. In contrast, the standalone performance was striking. FY26 standalone total income reached INR 2,241.7 crore, up 24.5%, and PAT rose 116.0% YoY to INR 910.9 crore, which management described as the company’s highest-ever standalone profit. They linked the outperformance to upstream dividend flows from overseas investments and buyback proceeds received during the year, alongside healthy operating cash flows.

Consolidated performance: revenue up, margins resilient, PAT hit by non-cash tax movements

On a consolidated basis, Nava’s Q4 FY26 total income was INR 1,194.8 crore, up 13.2% YoY, while EBITDA was INR 423.2 crore. Q4 PAT was INR 136.3 crore, down sharply on both QoQ and YoY comparisons. The company’s presentation and management commentary repeatedly pointed investors to the tax line for context.

Management explained that the increase in deferred tax expense at MEL was non-cash and largely triggered by around 32% appreciation in the Zambian Kwacha. The appreciation created unrealized foreign exchange gains and a timing difference between accounting income and tax treatment, leading to a deferred tax liability. They emphasized the liability is reassessed every reporting period and could reverse over time if currency movements change.

The investor presentation also pointed to operating factors behind the softer year-on-year EBITDA, including reduced realizations in ferro alloys and Indian energy, and higher fixed costs.

Standalone: record PAT, aided by investment inflows

Standalone financials were materially stronger than consolidated optics suggested. FY26 standalone total income rose to INR 2,241.7 crore and EBITDA increased to INR 702.8 crore. PAT was INR 910.9 crore, and the reported PAT margin expanded sharply, helped by exceptional items and other income.

Management stated that standalone profitability benefited from strong operational performance and, importantly, dividend and share buyback cash flows received during the year. They also highlighted that FY26 was among the company’s strongest cash generation years, improving liquidity and balance sheet strength.

Business update: alloys shift, India power volumes up, Zambia stable with receivables improving

Ferro alloys: silico manganese volumes drive the mix

In ferro alloys, Nava’s operating mix continues to shift toward silico manganese. FY26 silico manganese sales increased to 134,410 tons, up 42% YoY, while ferro silicon sales fell to 8,039 tons, down 33.9% YoY. The company stated that a production shift from ferro silicon supported the volume growth.

During the earnings call, management also discussed market conditions. They highlighted that Indian manganese alloy production is around 4 million tons, with roughly 1 million tons aimed for export. EU safeguard duties on Indian imports and geopolitical disruptions in the Middle East have pressured export channels, increasing domestic supply and weighing on prices. Against this backdrop, management said Nava has partial insulation because of contract coverage: annual arrangements with two major Japanese mills and quarterly fixed-base contracts with large Indian steel producers. They suggested that only a smaller portion of volumes is exposed to spot volatility.

Management also indicated they have discontinued ferro silicon production given the relative market attractiveness of silico manganese. For next year, they referenced silico manganese production of about 130,000 tons.

Energy (India): higher units sold, tariff softness managed via contracting

The Indian power operations reported healthy plant load factors (PLFs) and a sharp sequential increase in units sold in Q4 FY26. Total power sold in Q4 was 625 million kWh versus 432 million kWh in Q3 FY26, while FY26 total sold was 2,274 million kWh.

However, management acknowledged tariff softness. They noted that India’s peak demand is expected to touch 277 GW, but a large renewable capacity addition is restraining price upside. They cited a 13% year-on-year decline in exchange prices and described a strategy of relying more on bilateral contracts where net realizations are better than spot. On realizations, management estimated around INR 5.50 per unit for the current year.

They also explained that coal procurement economics improved in Telangana after Singareni Collieries reduced coal prices around September 2025 to align more closely with international markets. Management said this has a meaningful impact on cost structure and allows higher year-round PLFs and better participation in bilateral tenders.

MEL Zambia: stable full-year operations, Q4 shutdown, and tax-driven PAT impact

For MEL in Zambia, Q4 FY26 PLF was 86.0% compared with 96.6% in Q3 FY26 due to a planned maintenance shutdown of one unit. Full-year PLF remained steady at 89.6%, similar to FY25. FY26 power units sold were 2,115 million kWh, essentially flat year-on-year.

In USD terms, FY26 total revenue was USD 256.0 million, EBITDA was USD 151.4 million, and PAT was USD 81.4 million, lower than FY25 PAT of USD 115.5 million. Management reiterated that the PAT decline was driven by tax applicability and deferred tax provision impacts linked to currency movements.

Receivables were a positive swing factor. The investor presentation reported arrears reduced to USD 28.0 million, with USD 7.5 million realized during the quarter. On the call, management said collections have been on time and they expect the remaining balance in about six months.

Projects and capital allocation: solar and Phase II timelines, plus long-horizon agri bets

Nava’s project pipeline is active across energy and agri.

The 100 MW Maamba Solar project is under construction, with the investor presentation indicating planned commissioning in July 2026. In the earnings call, management reiterated commissioning is expected to commence in July 2026 and disclosed the solar tariff as USD 0.078. They also provided a financial expectation range for the solar asset: topline of USD 20 to 22 million and bottom line of USD 6 to 7 million.

At MEL, the Phase II 300 MW expansion is progressing with mechanical and electrical erections underway. Management guided commissioning in early January 2027.

On the agri side, Nava is building an avocado plantation and an integrated sugar project. The investor presentation stated that initial avocado yield has been exported to South Africa, and the integrated sugar project has progressed from plantation to ordering of major packages, with construction activities commenced. In the call, management provided more operating color on avocados: the first commercial harvest in FY26 was about 150 tons, the next year’s harvest sale is expected to be about 1,000 tons, and they expect scaling over time. They indicated peak avocado revenue of USD 22 million, with peak expected post 2032.

Management also addressed capital availability. They stated that financial investments include liquid mutual funds and debt products and that the Indian corpus is expected to fund the agri projects. They discussed remaining commitments in broad terms, including equity contributions and debt for the agri projects, and referenced ongoing funding needs for MEL Phase II.

Closing takeaways

FY26 reinforced a recurring theme in Nava’s story: operational performance and cash generation can look healthier than consolidated PAT in periods where Zambia’s accounting and tax mechanics dominate reported earnings. The company delivered revenue growth and maintained a high consolidated EBITDA margin of 42.5%, while the standalone entity reported a record PAT supported by upstream dividends and buyback proceeds.

Near-term investor monitoring points are straightforward. First, the execution milestones: Maamba Solar commissioning expected in July 2026 and MEL Phase II targeted for early January 2027. Second, the operating environment: ferro alloy pricing remains sensitive to export channel disruptions, and India power realizations remain tied to bilateral contracting discipline in a market seeing more renewable supply. Third, the accounting overhang: FX-driven deferred tax volatility can continue to distort consolidated profit trends.

Management also highlighted shareholder returns, noting a dividend of INR 8.50 per share, the highest in the company’s history. With multiple projects in progress and a long-horizon agri buildout, FY27 is positioned as an execution year, while consolidated profitability may remain sensitive to tax and currency translation dynamics at MEL.