BCL Industries (NSE:BCLIND) Q1 2027 Earnings Call

0:01 Ladies and gentlemen, good day, and welcome to the Bcl Industries Limited q one FY twenty seven earnings conference call hosted by Incred Equities. As a reminder, all participant lines will be in a listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. This conference call may contain forward looking statements about the company, which are based on the beliefs, opinions, and expectation of the company as of date of this call. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. Please note that this conference is being recorded. I now hand the conference over to mister Nitinavasti.

0:47 Thank you, and over to you, sir. Thank you. I would like to thank the management for giving us this opportunity to host their conference call today. From BCL Industries management, we have mister Kushal Patel, GMD, mister Varang Gupta, CEO. Also from Go India Advisors, their IR, we have Radeesha. I would now like to invite Mr. Kushal to initiate the proceedings with his opening remarks, post which we shall open the floor for a q and a session. Thank you, and over to you, sir. Thank you, Nitin. Good afternoon, everyone, and a warm welcome to Bcl Industries Limited Q1 FY 'twenty seven Earnings Conference Call.

1:34 I thank you for joining us today. I would like to begin by providing some recent updates regarding the company. It is unfortunate to report that on 06/19/2026, a fire incident occurred at one of our ethanol storage tanks at our Batinda Punjab distillery. However, on the positive positive side, there were no injuries to any employees, workers or personnel, and the fire was fully brought under control on the same day. This resulted in a temporary shutdown of our 200 kLPD ethanol plant. I want to reassure investors that based on our assessment, full recovery of the resulting losses through insurance claims is considered virtually certain and no net financial loss has been recognized in this result.

2:26 Against this backdrop, Bcl Industries has commenced FY 2027 on a steady note. Further sensing our Discovery segment on 06/30/2026, we completed the acquisition of the remaining 25% stake in Sub Sahar Desree Limited, making the three fifty kLPD distillery in Kharagpur West Bengal, a wholly owned subsidiary of BCL Industries Limited. I'm pleased to say that we have concluded this acquisition well within this stipulated time line. Further, the newly added 150 kLPD unit commercial trials began at the end of June twenty twenty six and was commercially successfully commissioned in the first half of July.

3:13 The revenue impact arising from the temporary shutdown of the 200 kLPD unit is expected to be substantially mitigated by the ramp up in production from the newly commissioned 150 kLPD unit at Bardhinda. While realizations of E and A and ethanol supply to private buyers remain under pressure due to oversupply, with E and A realizations declining to INR 58 per liters in quarter one FY twenty twenty seven from INR 70 a liter in quarter one FY twenty twenty six. The company continues to actively compete in the market to secure orders and maintain 100% capacity utilization. Despite the challenging environment, the distillery segment margin improved to 12.4%, supported by the operational efficiencies and the vertical integration that has been due to the Maize Oil Extraction Unit and our Maize Oil Refinery.

4:15 Our 115 ppH patty straw boiler continues to meet 100% of distillery steam and power requirements, further supporting cost efficiencies. Our Country Liquor business continued to deliver strong momentum during the quarter. We sold 637,993 boxes in Q1 FY twenty twenty seven, with our volumes increasing 42% quarter on quarter and 46% year on year. The strong growth reflects continued traction of our country liquor portfolio. We launched, Punjab Raspberry in Q4, which has great good consumer acceptance. Building on this momentum, we have launched Jamun Vodka in July 2026, further expanding our portfolio and strengthening our presence in the country liquor business.

5:11 As previously communicated, we have completed our exit from the packaged oil business, including the formal closure of the oil in Manasthati unit at a previous Burjunda location. This quarter results include INR199.47 lakhs, representing profit on the sale of fixed assets, compromising building materials and scrap from our dismantled unit. We continue to operate our soft oil refinery and trading business, which remains part of our legacy operations. We have also commissioned our Maisole extraction unit at Swaxha, a fully backward integrated facility that enables us to capture greater value across the value chain.

6:02 Now moving on to our financial performance for the quarter. Consolidated revenues from operations for Q1 FY 'twenty seven stood at INR $6.23 crores compared to INR $8.20 crores in Q1 FY 'twenty six. The reduction in revenue was primarily due to the closure of our edible oil unit and exit from the packaged oil business. EBITDA for the quarter stood at INR66 crores, up 17% year on year with EBITDA margin improving sharply by three seventy basis points from 10.5% to 10.5% from 6.8% in Q1 FY 'twenty six. PAT for the quarter came at INR 36, up 6% year on year with PAT margin improving to 5.7% from 4.1% in Q1 FY twenty twenty six.

7:02 On a segmental basis, our discrete business reported an EBITDA margin of 12.41% in Q1 FY twenty twenty seven, up from 11.8% in Q4 FY twenty twenty six and ten percent in Q1 FY twenty twenty six. E and A volumes grew sharply to TRY19376 in Q1 from TRY7960 in Q1 FY twenty twenty six, reflecting continued diversion towards E and A amid the competitive ethanol environment, while the ethanol volumes stood at 7,787 kl for the quarter. To conclude, Bcl Industries is strongly positioned to capture growth across our core distillery and refinery divisions.

7:51 As we execute our strategic initiatives, we remain fully committed to driving long term sustainable value for our shareholders. Thank you for your time and continued support. We would now like to open the floor for questions. Thank you, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on your touch tone telephone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Deepesh Sanjeeti with Finance.

8:45 Please go ahead. Hello,. Am I audible? Hi. Yes. Yes. You are. Yeah. Okay. At what price are we selling? It's not to private players? It's not to private players. It's primarily Reliance, and I think the average price is rupees 58 exactly. Exactly. And that is from FCI. Right? So that is from Maize? No. So the private ethanol procurers, they don't have the FCI rice. So that's mostly from damaged food grains. Okay. And at what price are we getting the damaged food grains? Because then we lose out that FCI rice advantage. Right?

9:39 No. See, FCI Rice is allocated against the allocation that we received from the government OMCs. So 40% of our allocation from the government OMCs, we had to procure FCI and then supply ethanol against the same. So for Reliance, we can procure grain from market. And mostly, besides SCI, our plant was running on maize. So for previous quarter, I think the procurement cost was around 22 to 23 rupees a kg. For maize? For maize. I'm trying to see. Okay. And what is the reason of the fire? Have we come to know about the reason of the fire?

10:26 And how are we working on avoiding that in near future for the rest of the plants? See, we were quite grateful that, you know, there was no loss of life or even an injury. All the systems were working in place. Since we are dealing with an explosive item like ethanol, the... I think the cause of fire was maybe a static charge that was created by something, you know, maybe from the cloth of a person working nearby. So moving forward, the company has set up more more facilities to prevent such an accident, but it was an unfortunate incident that occurred and is quite rare.

11:15 True. True. Okay. And first achievement of the e 20 blending target, what is our visibility on demand of grain based ethanol going forward? And how are we thinking of the pathway about beyond e 20 e 20? See, the demand for grain ethanol next year should should improve slightly because sugar ethanol from sugarcane will most likely not be allowed and only molasses based ethanol will be there. And see the growth factors going forward for the ethanol industry are, of course, flex fuel engines, which is a long term play. And besides this, we are quite hopeful on a good isobutanol policy coming in the near future as well.

12:04 And sustainable aviation fuel also would be another value addition for the ethanol industry. And also we are seeing from the government of India that now ethanol could be used as a source of cooking, which is a... Because ethanol is a very clean fuel. Even when it burns inside our homes, it's even cleaner than the PNG. So so it's a very good source for cooking energy as well. So I think there are many avenues for demand creation in the future, but it will take some time. Right. Any update on Goel discovery of bio CNG or even the biodiesel?

13:00 Hello? Hello? Operator, am I audible? Yes. I'm audible. Yes. So... But BIOS CNG, I think there's a very favorable policy that has just been announced a few days ago, and the company is actively looking into the sector to invest in, still the technology from Paddy Store is a little tricky, mainly this selling of the byproduct that is made in the process. And for biodiesel, again, the prices are not as favorable, so the company is not manufacturing any biodiesel.

13:46 And about gold distillery, the two fifty kLPD, which we plan to install? See, the project for now, we are holding on to it. We want to see how the industry further evolves in the coming months and then make a decision. Right. So if I could if I could just understand what is the unit economics just as in... If I... What is the selling price? What is the cost price? And, you know, what is the EBITDA in terms of our ethanol to the government, ethanol to private players, and ENA. Because since the ENA prices have reduced and ENA was our biggest, you know, go to market, especially when ethanol from the government demand was less. What is the unit economics? And what is the EBITDA basically on... If you can just mention the EBITDA also is fine on each product.

14:37 No, see, it's different. So FCI rice ethanol that's sold to the government is not very profitable. It's almost at cost, but there's a 40% mandate. But the maze based ethanol that is sold to the government OMC is quite profitable. And E and A and ethanol that is sold to private players in the market, they're about the same. The margins on that is about the same. So on an average, is our... About 12% as our EBITDA margin on an average. So per liter, I can assume that on base ethanol as well as on e and a, even at these prices, we are getting about 12 to... I mean, what? 9 to 10 rupees per liter?

15:32 9 to 10. Yeah. On an average. On an average. On an average. I'm not including the FCI based,. I'm just saying about the MAs based and ENA. Yes. Yes. Yes. Correct. Correct. Great. Great. Great. Congratulations again. And if there are any other questions, I'll join back. Thank you. Thank you. Thank you. Thank you. The next question comes from the line of Abhishek Kale, an individual investor. Please go ahead. Sir, am I audible? Yes. Good afternoon. Good afternoon. Our question, sir, four days back, Mr. Suraj Gopi has given a return reply in the parliament that diesel and ethanol mixing, because of ethanol's lower flash point, they are not considering this blending.

16:35 So I think in one of your updates, you said that the isobutanol lending is being actively pursued. So you may want to just visit that. There's a article in India as well. And there is a No. There's a direct Hey. There's a difference. There's a difference in the two statements. One is whether ethanol can directly be blended into diesel, which Right. Was rightly clarified that there's a difference in the cash flow. Now ethanol and isobutanol are two different products. Ethanol can be used to manufacture isobutanol, and I don't think there's any statement that has been made which says that even isobutanol is not No. I have not mentioned isobutanol can be blended with diesel.

17:26 Right. You're right. I was just trying to understand whether that is also being shelved or not. So thanks for clarifying that. Sir, second question, this whole e 20 related problems, right, which has been widely... I mean, it's all in the media. I don't know how much of it has need or whatever. But it seems like the government is on a back foot when it comes to the e 22 or e 27 kind of mileage which they are pursuing. Right? So, I mean, the... My... The reason for my question is, do we see that the ethanol capacity of take will increase unless and until we have a huge drop of flexible vehicles coming into the market.

18:28 In that point in time, do you see that the offtake is going to increase any further? Just a visibility kind of a question. See, firstly, when talking about isobutanol, I think the... There's still active trials and testing going on for a policy to be introduced. So I don't think that has been shelved. There's a big difference in these two statements that were made. Again, I say ethanol in diesel is very different from isobutanol in diesel. So I yes. When you talk about government being on the back foot or not, see that I can't comment on. I can speak on behalf of my company or, you know, even the the industry.

19:15 E20 has been going on for a year and a half. If there was any major damage to vehicles that would have showed in the eighteen months since when E20 or more than eighteen months since when e twenty has been going to the pumps and to the consumers. Yes, demand creation will happen from a few places. Maybe due to the pushback blending could be further blending could be delayed or shelved. I'm not sure about it. But besides that, I think biofuel industry as a whole has a very, very good future. India's food grain is still at record amount. We don't have enough space for this year's stock as well. Primer income is a must for any government.

20:01 So I don't think this is a policy that will be derailed for very long. There will be demand creation from isobutanol. There will be demand creation from SAS. And I think in the coming months, we'll see quite a few launches of flexible vehicles and we'll see E87 being available at even more pumps. So I think demand creation will happen. The pace at which it was happening earlier will slow down, that is realistic, but I think there will be good demand coming in the future times. Okay. Sir, one last question on biodiesel, if I may please. Yes, please.

20:48 Yes. So sir, as you have seen, biodiesel, I mean, somehow the government, the tenders, right? There is not enough of biodiesel being blended. Is there any specific reason why we are not seeing that happening? Because, I mean, we are also planning for a 75 kLPD unit at Swapsha. Am I right in saying that? If my memory No. See, that project that project has been brought on hold for now because biodiesel rates are not as remunerative. And I think the reason behind that that the lot of the raw materials for the biodiesel industry, you know, they're they're they're raw material. Raw material for the raw material is imported. So Right. The government, I think, maybe realizes that because the biofuel sector... The main aim for biofuel sector is to improve farmers' income, which it has done in the past few years very successfully.

21:56 Now since a lot of the raw material... To the raw material for biodiesel sector is imported, The government has not focused on it as much. And that's why the isobutanol, you know, is being tested. Because the government wants to promote indigenous raw materials, which will not only help the industry save the forex, but most importantly, farmer income. Right. Sir, if I may continue with this, would it be okay? The way we... If I understand correctly, we extract maize oil, which was our sole purpose of setting up the biodiesel unit, and we we had plans to consume it for making biodiesel at at...

22:46 So, I mean, that is something maybe we are not importing. It's locally produced. So then why are... Why probably we are not getting the tenders? Is that just because of the pricing, or what what would be the reason? I'm just trying to understand it from our context, not from the other Prices for biodiesel are very, very low, so that's what Okay. Okay. Okay. And... But, sir, if I may, have we read it this... I mean, you must have surely read this to the ministry or the one sees on the partners whom we are working with. Is there a feedback coming from their side as government is considering upping the price just to ensure? I mean, we are talking about security. Right? Energy security.

23:35 So this is something we are not importing. So is that a consideration that is being given? Yeah. I'm not a part of the government, so I can't comment on the No. No. I'm just I'm just saying that have you read it just to the partners that we are working with in terms of procurement or that we don't have a way of communicating this? Of course. The queries have been raised. The concerns have been raised by the association and different players in the industry. But what is happening inside, how will I be able to tell? You're right. That's a fair point from me. Thanks for clarifying. Thank you.

24:23 Our next question comes from the line of Gautam Karwa, an individual investor. Please go ahead. Hello? Yes. Are you audible? Please go ahead. Mister Gautam, your line has been unmuted. Please go ahead with your question. Hello? Abi Ari? Yes, sir. Mister you are not audible. Mister Gautam, I would request you to please rejoin the queue.

25:14 The next question comes from the line of an individual investor. Please go ahead. Good afternoon, mister. Thank you for the opportunity and good set of results. My first question is regarding the IMFL segment. So regarding the strategic timeline to enter the high margin IMFL segment over the next two years, management has previously indicated plans to construct a molt plant. So could you please provide an update on whether this project is on track? When is the construction formally scheduled to begin? And what is the total estimated CapEx for setting up this? Good afternoon. Yes. Thank you. So the the Malt unit is still under, you know, consideration and conceptualization.

26:05 I think the first in this... Well, first step should be entering the IMFL business, which we are working on. And, hopefully, next year, we'll be able to enter that business as well. When you say high profit, I think it's it's... Personally, I think country liquor for a for a company like us is always a more profitable business since IMFL is is a very, very competitive landscape. But, yes, that is a natural step for the company. So we will go ahead with that. And the MORG unit, I don't have any set time lines as of today. Got it. And regarding the two feet of KLPD green based plant at.

26:55 So it was highlighted by Rajendra ji in his interview with ET now in the month of July that the management is on the verge of finalizing the vendors and technology partners and will begin the construction by August. So is the plan still on, or you're keeping this on hold? No. So, yes, you... Yeah. You're very right. That statement was made. But post a few days after only we saw a huge huge social media backlash against the ethanol policy. So the company is, you know, we're holding the orders and the advances. Let's see. We want to wait and see the future road map as well. As I mentioned, you know, there are a lot of things that can happen in this industry.

27:42 And post that, you know, order... Pretty much the machinery orders are finalized and everything. All we have to do is press the start button, but we want to wait and just evaluate for a bit more. Got it. And last question is on the expected sale of land. So when can we expect the sale of land where the edible oil plant was commissioned? And along with this, have we repaid any debt? Because I have seen that there there has been a disclosure today from the company regarding the release of pledge of 75 lakh shares, which were earlier pledged with SVR cap. So that has been fully released. So could you update on these two things?

28:32 Yeah. See, as you can tell in our numbers also, the finance cost has decreased for the company. Our working capital utilization is quite low as opposed to what it was in the past. We have paid off a few small loans. And with the financial health of the company improving, our banks did agree to unpledge our already pledged shares. And the company is further reducing our working capital limit by another INR 50 crores in August. So it will be done in the month of August. So, yes, we are working on decreasing our debt with better cash flows in the company. For the land sale, I honestly do not have any update as, you know, the real estate market where we are in Bacchilla is quite slow.

29:30 So we're also in no rush to sell off the land, and we'll wait and see what takes place. Thank you, sir. Now Mr. I would request you to please come back in the queue for further questions. Thank you. Participants who wish to ask a question may press star and one. The next question comes from the line of Srirna Kesh with Shubh Capital. Congratulations for the good numbers. Sir, I have just a couple of questions. What has been the trend in BDGS realization? Yes.

30:17 So for the past two, three months, it has been steady with some decrease, maybe $1.02 rupees a kg. So prices of maize based DDGS are currently hovering around rupees 24 to 25 rupees a kg and rice based DDJs are about the same. Got you. Okay. My next question is what is the market size of country liquor in Punjab? And how much market share we hold currently? See, the current market is close to 1.25 crore cases per annum. Out of which the company this year is trying for 30 lakh cases.

31:11 Gotcha. Okay. I have only one more question. I think you partly have answered on that. Actually, are we looking to expand beyond PML into the IMFL? Yes. That is on that is on our mind, and we are working towards it. But we want it to be done in a proper way. And, you know, the company realizes that we need... We will need a lot of cash that will be spent in marketing and in the marketing and sales in the first year and a half... First year and two years. So we want it to be done with a proper team, with a proper strategy. So that's why we are still, you know, we want it to be done in the right manner. So we're taking a little bit of time.

31:58 So likely, it would be likely to comment? Yes, we will move towards that direction. Sir. Thank you so much. Thank you. The next question comes from the line of Naved Bhaiya, an individual investor. Please go ahead. Hello. Hi, Kushal. Okay. I have a few questions. This time, our volumes had increased a bit from the previous quarter, quarter four. So these volumes, are we looking to maintain it? Or there will still be headwinds to maintain these kind of volumes? 57,000, I think, is what we achieved. Volumes in which segment?

32:47 Both combined, actually. It's an all in EMA. A small and EMA might increase a little. One might increase when our... The 200 k l p d unit, which has been shut down due to the fires once it comes into operation. So, hopefully, in the next fifteen days, we'll be able to bring that into operation. So only that can be helpful in increasing the volume until then, I think, about the same. Okay. What is your current debt level? Oh,. I think including the working capital around 320 crores..

33:33 No. Sorry. Working capital is separate, and I think we are utilizing about 60 odd crores in working capital. So $3.60 crores. In the year end, I think your total debt was 576. So you repaid about 200 crores. Am I right? So that... So our working capital utilization has significantly decreased since. Understood. Okay. And is this likely to be maintained, or do you see it going back up again? It it will only go up if we go for another CapEx related project. So for for now, we don't have any set timeline for any of those projects. So I don't see it going up until then.

34:19 Understood. And with respect to, you know, your capital allocation in the time you have clarity on, you know, building up your new projects, what would your plan be in terms of capital allocation? Well, I think the plan until then is, you know, utilizing the working capital to the minimum. So, ideally, you would bring that down to zero. Okay. Which maybe you can achieve in a year and a half roughly. And by then, you're hoping there'll be more clarity in terms of the policies and everything else. Yes. Yes. Understood. You won't have any plans for a share buyback or something given your balance sheet and everything?

35:07 No. Not on our agenda right now. Okay. Understood. Thank you so much. Thank you. Thank you. The next question comes from the line of Gautam Karwa, an individual investor. Please go ahead. Mister Gautam, your line has been unmuted. Please go ahead with your question. As there's no response, we'll move on to the next question. It's from the line of, an individual investor. Please go ahead.

35:53 Thank you for the follow-up. So could you... Could management share how much ethanol was actually inside the 200 k l tank when it got fire and how long that tank had to stay shut? Also, since the presentation mentioned that insurance will cover the losses and that the new one fifty k l p d unit at Bclindah had make up for the lost production, I would like to understand the net impact on our time and operations. See, there were... The stock in the tank was 90,000 liters during the accident. The plant is still shut. The tank is being repaired. So I think in the next fifteen odd days, hopefully, we'll bring that plant into production again.

36:44 Not only stock loss is covered in our insurance, profit and loss is also covered in our insurance policy. So, you know, the p and l is being evaluated and will continue to be evaluated until the plant is into production. So for now, I can that's the only update I have. That's good. One last question. So given the Supreme Court's recent allowance for OMCs to procure an additional 1,449,000,000 liters for q four of ESY twenty five, twenty six. So can we expect incremental volume, like, from... For for demand for our company as well? Like, we can expect some Yes. Part of Yes. We are we are a part of that list, and I think we are one of the biggest gainers from that order by the supreme court.

37:40 So if I'm correct, it's around 4.5 crore liters that we get from that order. So for the next two, three months, I think we'll have a good order book. 4.5 crore liters? Yes. I think it's around that figure. That's great. So From both the units. Yeah. So that's a that's a good number to... Yeah. So it... So the order book will be full at the end of the year, and and the start of the q... Of the ESY 2627 will be a good start for the company from November. No. This is up until November. Yeah. Correct. This is the end of the ESY 2526 part.

38:26 The end will be good, and the start of the next ESY should be even better after after this order. I feel they are coming with e e 85 and e 100 getting dispensed at 5,000 fuel pumps, so we can expect the current demand from No. No. No. I don't want to I don't want to create any false hope for you. CES, e 85 and e e 100 is the future. As of now, flex fuel availability, flex fuel vehicle availability is very minimal in the country. There's only one model for sale. So, you know, until there are new models introduced and bought by consumers, the E85 and E100 will not be a growth driver for demand.

39:18 Yes, for the next three months, the order book is more than full. And next year also, we hope to keep our operations at 100%, but the demand creation from Flex Fuel will take time. Thank you, sir. Now mister, I would request you to please come back in the queue for further questions. The next question comes from the line of, an individual investor. Please go ahead. Hi,. How are you? Hello. Good afternoon. I'm audible. Good. How are you? Yes. Yes. You're audible. Good afternoon. So,, can you tell me about the current price of maize as of now? Current prices of maize has been increasing, so they're about 25 rupees a kg now.

40:09 Okay. So I think that maintaining the previous quarter margin would be difficult in that case. Will that be good? P and A prices have accordingly been revised upwards. But yes, the raw material prices have increased and even prices of fuel are increasing. So let's see. It's too early to comment. So can you guide me any steady state margin for this year? Like, 10%, 12% or an age probably will work. See, I think you'd... You can track our company's fast track or the... It has been around that with changes in price, it is in raw material or byproduct of finished goods. It tends to vary a little. But overall, I think our margins remain around 10, 12%.

40:57 Are you planning for CBD plant? Or have you worked down on that or it's actually in the pipeline? It is being actively being evaluated. We want to study all aspects because fatty straw for CBG is a relatively tricky raw material, and we want all our bases covered before we begin to execution. Is there any state level subsidy on that CBG plant? On the CVG plant, depending on the state, there is. Yes. Haryana has some policy. I haven't read it very thoroughly. But now from the center, there has been a very good policy. Okay. That's all from my side. Thanks. Thanks for the opportunity. Thank you.

41:46 Ladies and gentlemen, if you wish to ask a question, you may press 1. Participants who wish to ask a question to the management may press 1. Thank you. There are no further questions at this time. I would like to hand the conference over to management for closing comments. Yes. Thank you, everyone, for joining the call. No further comments from my side. Thank you, sir. On behalf of Encred Equities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.