Sanstar Q1 FY2027: Capacity Commissioned, Margins Rebound, and the Next Leg Hinges on Ramp-Up

Sanstar Limited opened FY2027 with a cleaner operating quarter, helped by normalized plant operations and higher production. For Q1 FY2027, revenue from operations came in at Rs. 2,062 million, up 21.5 percent year on year. Profitability improved sharply versus the prior year quarter, with EBITDA at Rs. 154 million and PAT at Rs. 92 million. Gross profit also expanded to Rs. 689 million, lifting gross margin to 33.4 percent.

The quarter mattered not only for the numbers, but for execution. Management highlighted the commissioning of expanded native starch capacity at Dhule, which increased Sanstar’s total installed capacity from 1,100 TPD to 2,350 TPD. With the expansion phase now on the ground and derivatives capacity expected during FY2026-27, the company is positioning itself to increase participation in value added starch based products while expanding domestic and export reach.

A quarter of improved throughput and stronger gross margins

The operational narrative was straightforward: better availability, higher production, and a sharper gross margin profile. Q1 FY2027 gross profit of Rs. 689 million was well above the Rs. 412 million recorded in Q1 FY2026. The gross margin improvement to 33.4 percent from 24.3 percent indicates a more favourable spread between product realisations and input costs, along with the benefits of smoother operations.

EBITDA margin stood at 7.5 percent in Q1 FY2027, a clear improvement from the negative margin reported in Q1 FY2026. Sequentially, profitability moderated from Q4 FY2026, with EBITDA down from Rs. 194 million to Rs. 154 million and PAT down from Rs. 205 million to Rs. 92 million. The company noted that higher energy costs impacted margins during the quarter, linking this to the ongoing conflict in the Middle East.

Below is a compact snapshot of the reported income statement metrics.

Capacity expansion shifts the conversation from build-out to utilisation

A central highlight for Sanstar is the scale-up in installed capacity. The company commissioned expanded native starch manufacturing capacity at Dhule during Q1 FY2027. While the original plan was to add 1,000 TPD, Sanstar scaled the addition to 1,250 TPD. This lifted total installed manufacturing capacity from 1,100 TPD to 2,350 TPD, spread across two facilities.

The manufacturing base includes a Dhule, Maharashtra site and a Kutch, Gujarat site. Dhule is described as having proximity to key ports and a large land bank, with a total land area of 210 acres and expansion potential. Kutch offers access to Mundra and Kandla ports and is described as USDA registered. Both sites are SCADA automated, as per the presentation.

The next variable is ramp-up. Management stated that the focus is on gradually ramping up utilisation of the expanded Dhule capacity. This matters because wet milling economics typically improve with higher utilisation, but the transition from installed capacity to stable commercial throughput can take time.

Sanstar’s product set includes native starch as the top product category, modified starch variants such as dextrins and pregel starch, and derivatives such as liquid glucose, dried glucose solids, liquid dextrose and dextrose monohydrate. The company also sells co-products like germ, gluten, fibre, maize steep liquor and enriched protein. Management’s stated intention is to increase participation in value added starch based products as the platform expands.

Exports remain a key lever, while pricing and energy costs stay watchpoints

Exports are positioned as a major lever for the next phase of growth. Sanstar reported that exports contribute 34 percent of revenue and that it serves 34 countries. In Q1 FY2027, export revenue increased 24.5 percent year on year to Rs. 723 million, supported by higher plant availability and normalized production.

At the same time, management acknowledged that the native starch market remains competitive. The presentation cites short term native starch pricing pressure due to Chinese exports into South East Asia and resulting excess supply in India. Management added that pricing pressure has moderated, but the competitive backdrop remains relevant as the company ramps volumes.

Energy costs were another clear headwind. Management stated that the Middle East conflict led to higher energy costs, impacting margins. In response, Sanstar continues to expand its renewable energy base. A 3 MW solar power plant at Kutch was commissioned in August 2026 at an investment of about Rs. 7.5 crore. The company expects it to meet around 40 percent of Kutch’s electricity requirement and generate annual power cost savings of about Rs. 3 crore. This is in addition to 3.5 MW solar and 1.6 MW biogas capacity at Dhule.

One of the more strategic developments during the period was the completion of a preferential allotment to Corr Products Development Inc., a subsidiary of Ingredion Incorporated. Sanstar raised approximately Rs. 1,983 million through the issue, and Corr Products Development Inc. holds about 9 percent of the company after the allotment. Management highlighted that the partnership provides access to Ingredion’s global R and D infrastructure, technical expertise and formulation capabilities, while strengthening the balance sheet to support expansion and diversification into value added specialty products.

What to track next

Sanstar’s Q1 FY2027 result carried two key messages. First, operating performance improved meaningfully with higher production and better gross margins. Second, capacity expansion at Dhule moved forward, shifting investor attention to utilisation ramp-up and mix improvement rather than mere installation.

Management’s near-term priorities are clearly stated: gradually ramp up utilisation of the expanded Dhule capacity, commission the derivatives facility during FY2026-27, increase the contribution from value added products, and expand presence across domestic and export markets while maintaining discipline on operating costs. The next phase will test how quickly the larger asset base converts into sustained volumes and steadier margins in a competitive starch market where energy costs can still swing the outcome.