Ganesh Benzoplast Limited ($500153)

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?

Yes, that's what the plan is.

Okay. And how much CapEx have we done for [indiscernible] and for the next year's capacity, like how much are we planning to do?

Combined CapEx for both of the capacities together is approximately INR 100 crores.

Okay. And one more question on the EPC side. So we got this one large INR 175 crores JSW Port order. How much of that is executed and how much of that is pending to execute?

So the engineering for that is over. And we are expecting that once this monsoon finishes, the actual groundwork can start.

Okay. And value wise how much is done?

Value-wise, I would say about -- I would have to check back on that and get back to you.

And margins are -- there are like higher single digits?

Yes.

Okay. Yes, that was all. And one more last question, sorry, if I can take it. So when you used to give that margin breakup, I used to see that this trading business always used to have this negative EBITDA margin. So why was that?

Trading include your EPC, trading includes your other like unallocable income and unallocable expenses. So obviously, that is variable things. You cannot expect similar thing over past quarter or future quarters. So there might be a plus or minus. But your rental income remains stable, it supports trend only and EBITDA margin is also stable.

Okay. Okay. And sir, can you please continue to give that margin breakup, segmental margin breakup?

Yes, we have noted the point, we'll incorporate that.

We take the next question from the line of Harish, an individual investor.

Am I audible?

Yes.

My question is regarding your Goa asset. What is the total investment you have done in the Goa asset?

So Goa was built in the year 2001. So we'll check on that, that what's the current investment on that and get back to you.

We are trying to be a modification at the same time. So what do you think -- what is the capital outlay for that?

That will be close to about INR 2 crores.

And you said that we have not tied up with any company for the use of the asset. Any negotiation on that? That's why we are going ahead with the modifications.

We've not had negotiations, but we've had discussions. There is a demand for petroleum in Goa, so we are trying to make a case to shift that demand fully or partially to our terminal. So yes, there are discussions going on, but we have not reached any negotiation stage on that.

Any ballpark figure? How much will [indiscernible] from that?

No. As of now, there's no ballpark figure.

Coming back to your presentation, slide #8. [Technical Difficulty] Can you explain me what it is? It is difficult to understand what exactly it is?

Yes. So this year, the JNPT plot rental for 7 and 13 plot has increased by INR 23 million almost -- INR 23 crores. Previously, it was INR 2 crores per annum. And now it has been increased by INR 23 crores. So total INR 25 crore is the lease rental for old plots. And there was an exceptional income of INR 9 crores, which got on account of the termination of that LPG thing.

When did it happen?

We can't make out what you're saying.

[Foreign Language].

It is around March -- February end or March 1, 2025.

Okay. So the full year impact is there in this year?

Yes, Yes.

Okay. So are we not able to pass on these rental to the customer?

Yes. We are doing that. And we expect that over the next 2 to 3 years, we should be able to achieve that. And then again, for the next 27 years or 26 years, you don't have this kind of impact.

Okay. Coming back to Slide #12, where we got 14 and 15 some new tankers you are doing. This is the same expansion you have been talking, CapEx being done?

Yes.

When do we get the operational?

See, I already explained this a few times on this call before, that the first phase of this, which is approximately 50,000 kL is expected to commission at the end of this calendar year.

We take the next question from the line of Anukul Arora from InVed Research.

Yes, sir. I had a few follow-up questions. I think, sir, what was the reason for the impact in EBITDA margin with the LST division for us?

I explained now, the lease rent has gone up by INR 23 crores.

Okay. And anything in the mix like EPC mix versus what we have been doing?

No, that will not have an impact on the LST division.

Understood. Understood. And lastly, it would be the case, what are the growth figures we are seeing in FY '27? What would be the growth triggers?

Like I explained that we are doing the expansion and that is the growth trigger that will come because that will increase our overall installed capacity by almost 15%.

Got it, sir. Got it. Sir, just to clarify on the margins part that I was asking. I think we have taken roughly INR 17 crores, INR 18 crores of hit in these rentals in Q3, and I think we had made around 21%, 22-odd percent EBITDA margin on a consol basis. And Q4 was due around INR 6-odd crores. But I think Q4, we did on a consol basis, roughly 18%, 19% margin. So I wanted to understand what was the reason for a shift downwards from 21%, 22% to 18% in Q4?

When I was explaining, it's the lease rental. We are now up to last quarter, there was pro rata provisioning of this lease rental and the cumulative total INR 25 crores, we have made the provision in the last quarter of the financial year '26. So if you can compare year-on-year, then you'll see there is a downward trend of INR 6 crores as against a lease rental increase of INR 25 crores, there was profit margin down by only INR 6 crores. So to some extent, we have passed on that burden to the customer, that additional. But yes, in this year, that additional INR 6 crores, INR 7 crores downside of that tax, we'll definitely go into pass to the customer. So that effect will be neutralized in this current financial year. And at INR 9 crores that exit was there. Obviously, that was onetime income from BW. So it will take roughly, I can say, 15 to 18 months to recover the entire thing.

Got it. it. So roughly, going back to the same trend would roughly take us 2 to 3 years in terms of the EBITDA margin.

Yes, yes.

We take the next question from the line of Ketan R. Khera, an individual Investor.

Rishi, on the Goa terminal, how much are we spending in terms of expenses every year?

Every year, see, we are just doing the normal maintenance CapEx that we need to do to keep the terminal in shape, which is approximately close to about INR 10 lakh a month or so.

And some lease rentals are there.

And lease rentals.

Some skeletal staff.

Close to about INR 10 lakh to INR 12 lakh a month.

INR 10 lakh to 12 lakh a month.

[Technical Difficulty] in P&L, but that is not in my cash flow.

Sorry, sorry. Come again, Mr. Kabra.

This is non-cash item depreciation, obviously.

Of course, of course, yes. yes. No, I meant in terms of the expenses that you clarified INR 10-12 lakh a month. And just increase in the lease rental that we have experienced. So how much is the capacity affected because of that?

Look, capacity is not affected because of any lease rental.

No, no. My question is, say, for example, the 100% capacity that we have at JNPT, we have got tanks on different plots. Not all plots lease rentals have shot up, right? Only some...

Okay. So we don't look at that. We look at it as a single business unit. So we look at JNPT as a single business unit, but I get your question. So out of the total installed capacity of roughly about 3 lakh kL, almost INR 2.80 lakh kL is on these plots.

The same capacity?

Yes, Yes.

Sir, then see, what I'm trying to get around is when our rentals have increased 10x, but we are still expecting the rentals to increase the rate of inflation in the next. So how would we be able to recover or reach to the same levels of margins in the next 2 to 3 years? Because you've been explaining that you will reach the margins in 2 to 3 years at the same levels that we used to do before. but 10x in rentals, but -- your expenses, but the income rental is not increasing at the same rate, will not increase the same in the next 2 years?

Yes. But you have to understand that the lease rent is not the 100% portion of your lease rental, right? If your -- the logic was that 100% expense is allocated to lease rent and I agree with you. That -- so suppose if every year, for example, if we are able to increase our revenue by INR 5 crores to INR 7 crores, for example, right? In INR 3 crores, your revenue has gone -- in 3 years, your revenue has gone up by INR 21 crores. But lease rental has not gone up by INR 21 crores, then. So you have covered whatever was increased now over the next 3 years.

And secondly, with this new expansion, obviously, this 45,000 kL then later -- so you will get the EBITDA margin of more than almost 80% of the new tanks. So that is going to compensate in 15 to 18 months.

We take the next question from the line of Dharmen Parikh from DM Corporation.

I just wanted to understand why have been our receivable over 6 months increasing?

Receivable constitute Chemical as well as your EPC as well as your rentals. So in overall, like EPC is going on. So there are some terms and conditions to the that we have to extend the credit terms by more than 60 days, 90 days. So that is the reason.

And the retention money gets paid after 1 year and all that.

That is the mix and match but there is no problem in recovery or anything.

So we are not placing any bad debt issue, if that's your question.

Yes, that's all.

I should not say any -- I should say there is no significant or major. Minor, small, small things keep happening, but that's not significant.

Ladies and gentlemen, there are no further questions from the participants. I now hand the conference over to Mr. Rishi Pilani for closing comments.

Thank you, everyone, for joining us for the quarterly update for FY '26 quarter 4. For any further questions, please feel free to reach out to any of us. Have a good evening, and have a great day.

Thank you all.

Thank you.

Thank you, sir. On behalf of Ganesh Benzoplast Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.