Ganesh Benzoplast Limited (500153) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Ganesh Benzoplast Limited Q4 FY '26 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I will now hand the conference over to Mr. Rishi Pilani, Chairman and Managing Director of the company, for opening remarks. Thank you, and over to you.

Thank you. Good afternoon, everybody. Thank you so much for joining us for the Q4 FY '26 conference call. We will initiate the call by taking you through the business highlights for the period under review, after which we will open the forum for question and answers. Now I hand over the call to Mr. Amar Kabra, GM Finance and taxation to share the quarter numbers with you.

Yes. Hi. Good afternoon, everybody. This is Amar Kabra. So I will share you the numbers. On consol basis, during the Q4 of financial year '26, the company achieved a total revenue of INR 1,115 million as compared to INR 999 million for the corresponding quarter in the previous year, with an increase of 12% Y-on-Y. The company earned PAT of INR 152 million as against loss of INR 132 million for the corresponding quarter in the previous year. For full year, for financial year '26, the company achieved a turnover of INR 4,114 million as compared to INR 3,743 million in financial year '25, with an increase of 10% Y-on-Y and the profit after tax increased to INR 733 million as compared to INR 380 million in previous year, with an increase of 93% Y-o-Y. EPS for financial year '26 increased to INR 10.19 versus INR 5.29 in the last year, which is nearly double. On a stand-alone basis, during the Q4 of financial year '26,, the company achieved total revenue of INR 726 million as compared to INR 575 million for the corresponding quarter in the previous year, with an increase of 26% Y-on-Y. The company earned PAT of INR 122 million as against a loss of INR 158 million for the corresponding quarter in the previous year. For financial year '26, the company achieved a turnover of INR 2,600 million as compared to INR 2,154 million in financial year '25, with an increase of 21% Y-on-Y. And the profit after tax increased to INR 613 million as compared to INR 307 million in the corresponding period in the previous year, with an increase of 99% Y-on-Y. EPS financial year '26 increased to INR 8.52 versus INR 4.27 in previous year. This was the highlight of the Q4 financial '26 results. Now I would like to open the forum for question and answer.

[Operator Instructions] We take the first question from the line of Nishita Sanklecha from Sapphire Capital.

So I just wanted to understand our current capacity is of around 3 lakh, 50,000 kL. So what is the capacity utilization there?

Hi, Nishita. So in JNPT, our capacity utilization is almost 100%. In Goa it is close to 0. And in Cochin, it is close above 80% to 85%.

So what is the reason...

Overall, it will be about 95%.

Right. In Goa, why is it close to 0?

See, Goa was mainly a bunkering terminal. And once the mining ban came in Goa, after that, the big ships have stopped calling Goa port, which is basically -- so the bunker requirement has gone away. We are exploring other avenues, but as of now, the situation is, it is not occupied.

Okay. Understood. Are we doing anything because we are at around 95% of utilization. Are we doing any CapEx? Or do we have any CapEx plan to increase our capacity?

Yes. Currently, CapEx is going on to increase the capacity by another 50,000 -- approximately 50,000 kL in JNPT.

Okay. And what is the CapEx amount for us?

So the CapEx amount for that is approximately between INR 40 crores to INR 50 crores for that particular phase expansion.

And like have you started the expansion or what's the update there?

So the work is already ongoing, and we are expecting that by end of this calendar year, we should be able to commission this phase.

Right. Okay. Understood. And so I just wanted to understand, so -- from what I had in the presentation, has reduced because our rental expense in JNPT has increased like it's 10x more than it was in FY '25.. So if you can throw some light on that, why has it increased so much?

So this is every 30 years, there is a reset in the rentals by the ports. So we got the land -- we got these land in 1995, so this is a reset in 2025. and the next reset will happen in 2055.

Okay. Okay. Understood. So going forward, what kind of for margin can we expect?

Margin means, what do you mean?

EBIT what sort of EBITDA margin can we expect in FY '27?

See, based on the current trend, which I've always maintained, the rental revenues keep going up by about 5% to 6% every year. That trend continues. Only difference is that now you have this reset of this rental, which happens once in 30 years. So over time, as the rentals catch up on this reset over the next 2 to 3 years, then the EBITDA will keep on changing accordingly.

Thus we are adding capacity. So obviously, the new capacity will have more EBITDA percentage as compared to the past revenue because already the fixed overheads all being taken care. So obviously, it will be upward trend only, slight.

Okay. Okay. Okay. But is it like take that [indiscernible]?

Yes, because this is a significant jump in the rentals.

Right. Okay. Understood. And anything on revenue growth? What kind of growth? What kind of revenue growth can you expect?

Like I said, approximately 5% to 6% on the current tanks that will be out, that's what we hope to achieve every year.

Yes. on the LSG segment, consolidated with the Chemical segment as well what kind of revenue growth that you see?

Chemical is also running more or less on steady state. If you see over the last 3 years, the chemicals PAT has almost gone up 2.5x. So -- and right now, we are not doing any major products for capacity expansion in Chemical. Small debottlenecking are going on. but there is no major project going on to like increase the capacity by step jumps. So Chemical also will remain on the steady path going forward.

We take the next question from the line of Ankul Arora from Invest Research.

I had a few follow-ups on the last part, I think on the Goa terminal, we had certain pending approvals for petroleum products. So anything on that front?

Yes. So we've got the statutory approvals in place to do some modifications on the tanks to handle blended petrol, which the approvals have been received by us. The work is expected to start post monsoon and finish by March 31 of this -- of 2027. But as of now, we do not -- so this is our attempt to add capabilities to that terminal, but there is no contract that we have signed as of now for handling petroleum on that terminal. So I just would like to clarify that we are trying to increase the capability of the terminal to create more options.

Understood, sir. Understood. Got it. Yes. if you can highlight more on the Chemical division, I think there was a bit of slowdown in Q4. So what was the particular reason for that?

So there's no slowdown in Chemical division. There are 2, 3 exceptional items which has hit in the last quarter of this financial year. One is the recertification. We've got the recertification from U.K. and Europe territory for that major expenses required, which has been into profit and loss account. So that is one of the things. And you are aware that Chemical division management has been changed in the last 2 years. Previously, some, Ramakant Pilani sir was handling. Now the control has been shifted to Rishi Pilani and his family. So for that period, the dues and salaries hike of previous staff, means Chemical division staff was spending since a long time. And that was under discussion since last 1.5 years, which was got settled in this quarter. So these 2 impact are there in Chemical. Otherwise, on a year-on-year basis, if you exclude, so you'll find a trend of at least 15% jump in the PAT of Chemical division. So that's pretty good.

Yes, just that answers this. Sir, I think the lease renewal that you highlighted that happened every 30 years. So for the new tanks that we had recently done, so when is the lease renewal new for them?

As of now, the lease renewal for them is due in 2047, with the current sign leased.

Okay. 2047 for those -- for the 2 tanks that we have done the CapEx.

Which 2 tanks? So the -- so we have built 19 tanks earlier and now we are in this phase constructing 3 more tanks.

Big tanks with 45,000 capacity.

So you're talking about that phase?

Yes, yes. I was talking about that.

Yes, yes.

Got it, sir. I think one more question. I think our CapEx of [indiscernible], I think we expect around 50% capacity by Q1. So are we on track for that?

Yes. So we are expecting that by end of this calendar year, we should be able to commission that.

Okay. Got it. Got it. Lastly, sir, any CapEx on the ammonia storage or additional [indiscernible]. I think we were planning for around INR 450 crores, INR 500 crores of CapEx. We had...

That CapEx is still under discussion. So the land is earmarked for the bullets. It's kept aside for the LPG bullets and the ammonia tank, but that CapEx is still not initiated.

Understood, sir. So how much of the land is still available for us?

In the new plot.

In the JNPT part, terminal.

Approximately 5 to 6 acres is available.

We take the next question from the line of Dharmil Parik from DM Corporation.

Am I audible?

Yes.

Yes.

Yes, sir. Firstly, I wanted to know what are our plans with the wholly owned subsidiary, which we have planned to open in Singapore?

So as of now, the -- with this new -- with the war and the new development and the fact that we have now taken over the management of the Chemical division, and we have a very good now inroads into the supply and distribution of chemicals with us, so we are looking at opportunities that might open up for allowing basket trade. Now what I mean by that is that suppose there is a supplier from whom we are buying chemical X, but they also make chemical Y, chemicals Z, which goes to my sort of customer in Europe from whom supplying my fixed which might produce material from my factory. So I can offer to that client in Europe that not only will I supply to you, what I manufacture in my factory here in India, but from an international source from whom you are already buying, we do a basket for you where we'll also supply you the other products that you need. So it's right now at a very preliminary stage. We have a few ideas that we are discussing to see what all can be implemented. But that's the primary purpose of this is to become like a one-stop supplier to your client for all his product needs.

Understood, sir. So okay. Secondly, in previous con calls for, we were told that 50% of the ongoing CapEx will be operational by Q1, which I heard even previous -- in previous questions, that you said that it will be completed within this financial year. So within this financial year, entire CapEx will be finished or only 50% of the work will be finished?

No. So no, entire the entire 49,000 phase will be completed by this December.

Okay. So can we expect the revenues to reflect from Q4 of this year?

Yes. Yes.

Okay. Secondly, I'm assuming our -- with my limited knowledge, our rentals in JNPT are on spot pricing. So because -- due to this war and everything as from my observation, LST companies around the world have made a link because of the rates shooting up and trade getting disrupted. So can we expect some good amount of higher realization, higher margins in Q1 this year?

I'm not sure which companies around the world you're talking about, but as far as what JNPT, you have to understand that JNPT is already running at almost 100% capacity utilization. We have -- it's not spot basis. It's a mix of primarily long-term storage contracts and some spots. And we have not observed any such exceptional demand or requirement that would allow us to take any opportunistic advantage of this situation in terms of pricing or even throughput turnover. Because you have to realize that while some people may have been able to take advantage of demand supply gap, but there was also a very, very reduced inflow coming into India because of the war situation. So it was not that the capacities were running over full and there was no place to keep cargo and so people -- like I could charge exceptional rates for this period.

Understood. Understood, sir. And my last question, our inception to LST business, we've always been into 3 ports, which is JNPT, Cochin and Goa. Why don't we look at expanding and adding some other good assets to our portfolio? Because we practically have everything, whatever LST company requires, we have good promoters, we have good experience. We have entire ecosystem. But still why we are getting -- only concentrating on these three ports?

See, that's a very good question, but I'll answer it in a very simple manner that we always look at any opportunity in terms of its ROI in the sense that we want to make sure that if we are committing company's capital and resources towards any other port, we should be able to give at least equal or more ROI than what we are getting in JNPT because JNPT right now, you have expansion possibilities, right? So if I have to deploy INR 1 of the company's money, if I'm not deploying it in JNPT and if I'm deploying it somewhere else, then there has to be that much reason and logic that is going to give me a higher return than JNPT. And unfortunately, as of now, we've not found such opportunities where you get such high returns.

Understood, sir. If not in India, maybe abroad?

Yes, we can -- see, we are open to everything. But the thing is that we need to be sure that we don't end up deploying company resources in a manner that is not equivalent to what we can generate here. That surety we need. So if we get a back-to-back contract, we get a good deal, then definitely, the company will go ahead and do it.

We take the next question from the line of Krupa Desai from Electrum Capital.

Just 1 follow-up question on the earlier participant's question. So we had already signed some LOI with Visakhapatnam government. We were planning to come up with some capacities in Visakhapatnam I believe. So any update on that?

No, I believe that there is, not involving us, but between the previous person who held this plot in Visakhapatnam and the Visakhapatnam port, there is some dispute going on. So it has nothing to do with us. But due to which the LOI is on hold. I'm not sure whether it is being put on hold legally or it supports internal decision. But because of that, the LOI is right now -- I should not say LOI has been put on hold. Its progress further from LOI is on hold.

Okay, sir. And in this quarter, in the presentation, you have not given the segment-wise margin breakup. So for this quarter, are we able to do like 45%, 47 percentage of margins on the rental revenue business?

This time, we have made a lot of changes in the presentation because since last 4 years, we are giving the same presentation and we have made a lot of changes. So might be that has been missed, so we look at it later on.

Yes. So has that margin changed, this 45% to 47%?

No, that remains same.

And do we expect an improvement? Because I think in this year, we see a capacity coming in.

That's I already explained because if the new capacity, our EBITDA margin will definitely going to increase.

Yes, yes. And I just needed to confirm. So in Q1, we expected 40,000 kiloliters of capacity to come live. So is that on track?

Yes, yes, that is going on, and by this year-end, that will be [indiscernible] so by the Q1 of next year, next financial -- calendar year that will be [indiscernible].

Okay. Q1 of next financial year or Q1 of FY '27?

Q4 of this financial year, you can see Q4 of this financial year.

Q4 of this financial year, 40,000 kiloliters of capacity will be operational.

Yes.

And next year, another 60,000 is coming, right?