Gulshan Polyols Limited (Gulshan), a multi- product manufacturing company, has announced the financial results for the first quarter ended on 30th June, 2023.

Gulshan’s revenue from operations increased by 8.62% from Rs. 270.18 crore in Q1 FY23 to Rs. 293.47 crore in Q1 FY24. The revenue growth was led by healthy demand for products across all our segments.

EBITDA decreased by 28.36% from Rs. 21.78 crore in Q1 FY23 to Rs. 15.61 crore in Q1 FY24 and margins from 8.06% to 5.32% owing to elevated commodity prices impacting raw material.

PAT stood at Rs. 10.19 crore in Q1 FY23, compared to 4.39 crore in Q1 FY24 recording a decline of 56.88 % due to operational factors as mentioned above and raised finance cost and depreciation consequent to on-going expansions.

Q1 FY24 Earnings Update

The company has successfully achieved another milestone by starting commercial operations at its 500 KLPD Grain based Ethanol Plant at Boregaon, Distt. Chhindwara, Madhya Pradesh. It has also dispatched sizable volumes of Ethanol to reputed clients, viz., Reliance Industries Limited and Nayara Energy Limited.

Due to short supply of rice from FCI for producing Grain Based Ethanol from the existing 60 KLPD plant, there was a decrease in revenue from the same plant.

Commenting on the performance of Q1 FY24, the management team of the company states that, “We are happy to share with you our financial and business performance for Q1 FY24. Revenue from operations stood at 293.47 crore showing a healthy increase of 8.62% on a YOY basis predominantly driven by good growth across our business segments. We have managed to achieve good growth across all our segments during the quarter.

The company continues to face pressure on account of Raw Material Prices across Grain Processing and Ethanol Division and thus, our margins have declined during Q1 FY24 compared to Q4 FY23 due to elevated key input prices.

The company had to shift to SFCI rice to produce ethanol, as the price of ethanol from DFG grains had turned unviable due to unprecedented price increase of rice. However, the supply of SFCI remained limited and irregular, hence impacting the revenue in the Ethanol Division.

Grain processing division, has witnessed sharp decline in margins owing to in season raw material purchased at higher price in anticipation of price rise. This has been corrected now in the current quarter.

Some products in the grain processing division have witnessed sharp fall in selling prices. Company is relooking at its existing product mix and focusing on better margin products going further.

Further, On the ESG front, we continue to transform lives of the community around us and are consistently focused on sustainability in all our operational and growth planning.

We would like to highlight the following updates with respect to our individual business segments:

Grain Processing Segment:

We continue to remain one of the dominant players in the grain processing segment on the back of enhanced product portfolios, vast industry experience and geographic reach. Our products in this segment find multi-faceted applications in industries like pharmaceuticals, oral care, paints, paper and packaging, food and confectionery, animal feed, oil, textiles and adhesives.

Q1 FY24 Earnings Update

The underlying growth in these industries has led to healthy demand for our products and has allowed Gulshan to meaningfully contribute to the ‘Make in India’ theme by focusing on product development that allows large scale import substitution.

Ethanol (Biofuel/Distillery) Segment:

The Capex on 500 KLPD Grain Based Ethanol manufacturing unit has completed and the unit has started commercial operations allowing Gulshan to become the largest single stream Grain Based Ethanol producer in Asia. Further, the development of our Assam unit is also progressing well on expected timelines.

With the above capex coming on-board, Gulshan will become one of the dominant players in Grain Based Ethanol manufacturing in the coming years.

Mineral Processing Segment:

We continue to hold a respectable market share in this segment and are recognized for our exquisite service and products like On-site PCC plants, Ground natural calcium carbonate / Wet ground calcium carbonate, Activated calcium carbonate and others.

We believe that Gulshan is at a cusp of a transformational journey of becoming one of the leading players in all the solutions it provides. We aim to grow by expanding our product base, reaching newer geographies and working efficiently towards the ‘Make in India’ program while being an environmentally friendly company.

We would like to express our gratitude to our employees for their ongoing efforts and our investors/ stakeholders for their support and encouragement as we go forward in capturing the growth prospects that lay ahead of us.”

Management Outlook

Gilshan’s 500 KLPD facility at Borgoan, Madhya Pradesh has started commercial operations allowing Gulshan to become the largest single stream Grain Based Ethanol producer in Asia.

The company has completed approx. 50% capex for its total requirement for its 250 KLPD in Assam. Currently, fabrication and Installation of Plant & Machinery is in progress.

The company has always remained consistent in paying incentives to its shareowners. Accordingly, the Board of Directors of Gulshan Polyols Limited has approved the allotment of 1,03,95,097 Equity Shares of Re. 1/- as bonus shares in the ratio of 1:5 to the existing shareholders of the Company as on June 23, 2023.

Business Updates:

The company has successfully achieved a milestone when its 500 KLPD capacity Grain based Ethanol Plant at Boregaon, Distt. Chhindwara, Madhya Pradesh passed all the Quality Control parameters for the Production of Ethanol during the trial run.

On June 23, 2023, the Board of Directors of the company approved the allotment of 1,03,95,097 equity shares of Re. 1/- to the existing shareholders of the company in the ratio of 1:5 i.e., 1 fully paid up equity share of Re. 1 each for every 5 existing fully paid up equity shares of Re. 1 each held.

During the Quarter ended June 30, 2023, the paid-up equity share capital of the Company stands increased to 6,23,70,586 equity shares due to bonus issue