India Glycols Powers Ahead Strategic Growth Strong Margins

Ashwin Thakker

— 3 min read

Key Facts on Outlook:

  • **Overall:** Strong Q1 FY26 with net revenue up 7% and PAT up 21%. Expects continued growth across segments, supported by strategic initiatives.
  • **Bio-Fuels:** Top line up 45% (Q1 FY26). Expected sustained double-digit growth, driven by increased consumption, penetration, and potential higher blending mandates (20% by FY26, 25-30% by 2030). Government's administrative price mechanism aims for a "steady decent margin."
  • **Potable Spirits:** Revenue up 22% (Q1 FY26). "Bunty Bubli" (Country Liquor) aims for 7-12% annual growth. IMFL segment targets "much better growth" via premiumization, Amrut partnership, and new market entries (CSD, Kerala, 2-3 more states). EBIT margins improved from 17.5% to 21.1%.
  • **Chemicals:** Performance Chemicals showing promising growth. Joint Venture sales "up in double digits" with "EBITDA up in high double digits." Focus on value-added products, targeting over "150% volume value contribution growth" in niche segments. EBIT margins expanded from 9.9% to 10.9%.
  • **Ennature Biopharma:** Currently facing margin pressure (2.38% net margin Q1). Strategy for revival includes differentiation, regulatory approvals for developed markets, and branded nutraceuticals, expecting "substantially" increased margins from Q3.
  • **Capital Expenditure (CapEx) & Debt:** No "huge CapEx" planned for current year (only Rs. 40-50 crores rollover/maintenance CapEx), funded internally. Plans to repay approximately Rs. 300 crores of debt this year from cash accruals.
  • **Restructuring:** Demerger plan to create IGL Spirits, Chemicals cluster, and Ennature Biopharma aims to unlock shareholder value.

India Glycols Limited reported a robust financial performance in Q1 FY26, with net revenue increasing by 7% and Profit After Tax (PAT) growing by a strong 21%. The recent earnings call illuminated the company's clear strategic direction and forward-looking guidance across its diverse business segments. Management emphasized initiatives aimed at sustaining this momentum, focusing on market leadership, value-added products, and disciplined capital allocation to drive future profitability and shareholder value.

Driving Growth in Bio-Fuels and Potable Spirits

India Glycols' Bio-Fuels business continues to fuel strong performance, with its top line surging 45% in Q1 FY26. Management remains confident in sustained expansion, driven by increased consumption and market penetration. The company highlighted the government's robust ethanol blending strategy, noting the 20% target for 2025 is

"well on track,"

ahead of the original 2030 timeline. Future plans aim for 25-30% blending by 2030. This strong policy support and the administrative price mechanism are expected to ensure

"steady decent margin"

stability.

The Potable Spirits segment also posted strong Q1 FY26 results, with revenue up 22% and EBIT margins improving from 17.5% to 21.1%.

"Bunty Bubli"

remains India's highest-selling liquor, maintaining 7-12% annual growth. India Glycols is strategically expanding its Indian Made Foreign Liquor (IMFL) portfolio, focusing on premiumization through its Amrut partnership. This includes plans to enter the Canteen Services Department (CSD) and expand into new states like Kerala and two to three additional regions this fiscal year, targeting

"much better growth"

and enhanced profitability.

Strategic Focus on Value-Added Chemicals and Biopharma Revival

In the Chemicals segment, India Glycols is building on its value-added Performance Chemicals business, which is showing promising growth. The joint venture with Clariant reported

"double-digit"

sales growth and

"high double-digit"

EBITDA growth. This improvement is attributed to a reduction in the EO price gap and an enhanced product mix from global technologies. The company is actively pursuing new product developments in niche areas like oil field chemicals, crop protection, and bio-based amines, aiming for

"in excess of 150% volume value contribution growth"

in this small, but strategic, segment. EBIT margins in Chemicals expanded from 9.9% to 10.9%.

The Ennature Biopharma segment currently faces challenges, with margins under pressure at 2.38%. Management acknowledged market softness due to slowing demand and new entrants, particularly in products like thiocolchicoside. However, a clear strategy is in place for revival, focusing on product differentiation, achieving regulatory approvals for developed markets like the U.S. and Europe, and building a branded nutraceuticals portfolio. The company anticipates a

"substantially"

increased margin from the direct introduction of branded nutraceuticals in the U.S. and European markets from Q3 onwards, signaling a focused turnaround.

India Glycols is navigating its diversified portfolio with a clear, disciplined strategy. The robust performance in Bio-Fuels and Potable Spirits, combined with targeted initiatives in Chemicals and Ennature Biopharma, positions the company for sustained growth and improved profitability. A prudent capital expenditure plan and a commitment to debt reduction further strengthen its financial health, indicating a stable and positive trajectory for future performance.

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