Regaal Resources Q2 EBITDA margin rises 617 basis points

Regaal Resources lifted its operating EBITDA margin to 17.1% in Q2 FY27 from 10.9% a year earlier, a 617-basis-point expansion, as value add increased 64.3% to Rs 129.02 crore despite operating income declining 1.1% to Rs 316.56 crore. Operating EBITDA rose 54.7% to Rs 54.2 crore and profit after tax rose 38.7% to Rs 23.18 crore.

Why did Regaal’s Q2 FY27 margin expand despite lower income?

Regaal’s reported value-add margin increased to 40.8% in Q2 FY27 from 24.5% in Q2 FY26, an expansion of 1,622 basis points. Value add, which Regaal defines as operating income less cost of goods sold, reached Rs 129.02 crore versus Rs 78.54 crore a year earlier, while operating income moved down from Rs 320.02 crore to Rs 316.56 crore.

The higher value-add amount was accompanied by operating EBITDA of Rs 54.2 crore in Q2 FY27, compared with Rs 35.04 crore in Q2 FY26. Regaal defines operating EBITDA as profit before tax and exceptional items, plus finance costs, depreciation and amortisation, less other income. On that measure, the EBITDA margin rose from 10.9% to 17.1%, while profit after tax margin increased 210 basis points to 7.3%.

How did Regaal’s Q2 results compare with Q1 FY27?

Regaal’s Q2 FY27 operating income increased 56.6% sequentially from Rs 202.15 crore in Q1 FY27 to Rs 316.56 crore. Value add rose 60.2% from Rs 80.53 crore, and its margin increased 92 basis points from 39.8% to 40.8%, according to the company’s quarterly comparison.

Operating EBITDA rose 75.0% quarter on quarter from Rs 30.98 crore in Q1 FY27 to Rs 54.2 crore in Q2 FY27. The operating EBITDA margin consequently increased from 15.3% to 17.1%, or 180 basis points. Profit after tax increased 73.9% from Rs 13.33 crore to Rs 23.18 crore, and diluted earnings per share rose from Rs 1.29 to Rs 2.24.

The sequential profit increase occurred alongside higher costs below operating EBITDA. Finance cost was Rs 14.44 crore in Q2 FY27, up 82.6% from Rs 7.91 crore in Q1 FY27, while depreciation increased 48.5% to Rs 8.37 crore. Even so, profit before tax before exceptional items increased 77.6% quarter on quarter to Rs 31.72 crore.

What does Regaal’s first-half performance show?

Regaal reported H1 FY27 operating income of Rs 518.71 crore, down 8.5% from Rs 566.59 crore in H1 FY26, while value add increased 49.3% to Rs 209.55 crore. The resulting H1 value-add margin was 40.4%, compared with 24.8% a year earlier, a 1,563-basis-point increase.

H1 FY27 operating EBITDA rose 43.2% to Rs 85.19 crore from Rs 59.5 crore in H1 FY26, and the corresponding margin rose 592 basis points to 16.4%. Profit after tax increased 41.6% to Rs 36.51 crore, lifting the profit-after-tax margin from 4.5% to 7.0%. Diluted earnings per share for the half year were Rs 3.53, compared with Rs 2.93.

The first-half figures show that Q2 supplied more than half of H1 FY27 operating income of Rs 518.71 crore. Q2 also supplied Rs 54.2 crore of H1 operating EBITDA of Rs 85.19 crore, compared with Q1 FY27 operating income of Rs 202.15 crore and operating EBITDA of Rs 30.98 crore.

What balance-sheet and working-capital measures should readers track?

Regaal’s net debt was Rs 880.81 crore at 30 September 2026, compared with Rs 735.32 crore at 30 June 2026 and Rs 545.65 crore at 31 March 2026. Net debt is defined as total borrowings less cash and cash equivalents. Net worth increased to Rs 515.99 crore at 30 September from Rs 494.95 crore at 30 June.

Net debt to equity was 1.7 at H1 FY27, compared with 1.5 at Q1 FY27 and 1.1 in FY26. Net debt to operating EBITDA was 5.2 at H1 FY27, lower than the annualised Q1 FY27 measure of 5.9 but above FY26’s 4.3. Regaal labels the Q1 and H1 ratio calculations annualised.

Net current assets, excluding cash, cash equivalents and short-term borrowings, rose to Rs 489.85 crore at 30 September 2026 from Rs 350.13 crore at 30 June 2026. The cash conversion cycle was 123 days at 30 September, improving from 130 days at 30 June but remaining above 50 days at 31 March.

How has Regaal’s product revenue mix changed?

Regaal’s H1 FY27 contract-price revenue mix was led by native maize starch at 60.1%, followed by co-products at 30.3% and value-added products at 7.7%. Trading and others accounted for 1.3%, while modified starch accounted for 0.5%. The company states that others include traded maize.

Native maize starch rose to 60.1% of revenue in H1 FY27 from 45.5% in FY26, while co-products increased to 30.3% from 20.6%. Value-added products increased to 7.7% from 2.7% in FY26. Modified starch remained 0.5% in both periods, based on the reported product-segment contribution data.

Conclusion

Regaal’s Q2 FY27 data show a gap between income and profitability trends: operating income declined 1.1% year on year, while value add rose 64.3%, operating EBITDA rose 54.7%, and profit after tax rose 38.7%. The reported expansion in value-add margin to 40.8% and operating EBITDA margin to 17.1% accompanied those changes.

The unresolved measures to watch in subsequent reporting are net debt, which rose to Rs 880.81 crore at 30 September 2026 from Rs 545.65 crore at 31 March, and the cash conversion cycle, which was 123 days versus 50 days. Changes in the H1 FY27 revenue mix, including the 7.7% contribution from value-added products, will also show whether the reported product composition is sustained.