Zuari Industries Ltd ethanol production falls 63.3% in Q2

Zuari Industries Ltd’s ethanol production fell 63.3% year on year to 3,188 kilolitres in Q2 FY27, after distillery operating days dropped to 29 from 78. The company said no subsequent tender followed the November 2025 annual tender in ethanol year 2025-26, unlike the multiple subsequent tenders in ethanol year 2024-25.

Why did Zuari Industries' ethanol production decline in Q2 FY27?

Zuari Industries' ethanol production declined because its distillery operated for 29 days in Q2 FY27, compared with 78 days in Q2 FY26. The company reported 3,188 kilolitres (KL) of production in the quarter, down from 8,684 KL, a reduction of 63.3%.

The presentation identifies the tender schedule as the stated reason for the lower operating period. It says there was no subsequent tender in ethanol year 2025-26 after the annual tender in November 2025, whereas ethanol year 2024-25 had multiple subsequent tenders.

The shorter distillery run also affected the power plant associated with the distillery. Quarterly power generation fell 58.1% to 25.0 lakh units (LU) in Q2 FY27 from 59.6 LU in Q2 FY26, with the presentation attributing this change to fewer distillery power-plant operating days.

How did Zuari Industries' ethanol sales compare with production?

Zuari Industries' Q2 FY27 ethanol sales fell less sharply than production, declining 42.0% to 4,498 KL from 7,757 KL a year earlier. Production fell 63.3% to 3,188 KL, meaning the production decline was 21.3 percentage points larger than the sales decline in the same quarter.

The decline extended into the first half, although at a lower rate than in the quarter. H1 FY27 ethanol production was 13,326 KL, down 28.7% from 18,703 KL in H1 FY26, while ethanol sales fell 15.8% to 14,746 KL from 17,514 KL.

Power sales followed the quarterly production pattern. Q2 FY27 power sales dropped 78.6% to 1.6 LU from 7.3 LU in Q2 FY26, while power generation decreased to 25.0 LU. The presentation specifically connects lower quarterly power-plant operation to reduced distillery operation days.

Did Zuari Industries' sugar performance improve while ethanol volumes fell?

Zuari Industries recorded higher sugar sales and realisations in Q2 FY27 despite no cane crushing or sugar production during the quarter because of business seasonality. Sugar sales increased 7.1% to 3.9 lakh quintals (LQ) from 3.7 LQ, while realisation rose 13.8% to Rs 4,588 per quintal from Rs 4,033 per quintal.

The sales gain was also evident over the first half. H1 FY27 sugar sales increased 18.2% to 8.6 LQ from 7.3 LQ in H1 FY26, and average sugar realisation rose 7.4% to Rs 4,331 per quintal from Rs 4,034 per quintal.

The standalone financial results reported alongside these operating metrics showed Q2 FY27 total revenue of Rs 261.7 crore, up 5.5% from Rs 248.1 crore. Earnings before interest, tax, depreciation and amortisation (EBITDA) rose 20.5% to Rs 63.3 crore, while profit before tax (PBT) before exceptional items increased 67.3% to Rs 31.2 crore from Rs 18.6 crore.

The quarter therefore contained contrasting operating movements: ethanol production declined 63.3% and ethanol sales fell 42.0%, while sugar sales increased 7.1% and sugar realisation rose 13.8%. The presentation also lists a year-on-year reduction in borrowing cost to 9.5% from 10.26%, and a Q2 lowering of finance cost by Rs 2.2 crore.

What does Zuari Industries' first-half operating data show?

Zuari Industries' H1 FY27 data shows ethanol volumes below the prior year but power and sugar activity above it. Ethanol production declined 28.7% to 13,326 KL, whereas power production rose 40.7% to 179.7 LU from 127.7 LU in H1 FY26.

The company attributed the higher first-half power production to six additional crushing days, with crushing extended until 6 April 2026, compared with no such extension in H1 FY26. Cane crushed was 4.0 LQ in H1 FY27 versus nil a year earlier, and sugar production was 0.5 LQ compared with nil.

First-half power sales increased 328.8% to 64.4 LU from 15.0 LU, a different direction from the 78.6% quarterly decline in power sales. This contrast reflects the reported increase in H1 power-plant operating days from extended crushing, while Q2 operations were constrained by the shorter 29-day distillery run.

Standalone H1 FY27 revenue increased 15.4% to Rs 545.6 crore from Rs 472.8 crore, while EBITDA rose 5.8% to Rs 94.6 crore from Rs 89.4 crore. PBT before exceptional items increased 36.8% to Rs 26.7 crore from Rs 19.5 crore, while the presentation lists an H1 lowering of finance cost by Rs 2.9 crore.

Conclusion

Zuari Industries' Q2 FY27 data shows that lower distillery utilisation coincided with reduced ethanol and power volumes, while sugar sales reached 3.9 LQ and sugar realisation rose to Rs 4,588 per quintal. The operating mix was accompanied by standalone revenue growth of 5.5% to Rs 261.7 crore and EBITDA growth of 20.5% to Rs 63.3 crore.

The next disclosed unresolved issue is the ethanol tender schedule. Zuari Industries linked the absence of subsequent tenders after the November 2025 annual tender to the reduced distillery operating period, while the six-day crushing extension through 6 April 2026 was the stated factor behind higher H1 power production of 179.7 LU.