Zuari Industries (NSE:ZUARIIND) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to q one FY twenty seven earnings conference call of ZUARI INDUSTRIES LIMITED. 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. Please note that this conference is being recorded. I would now hand the conference over to Mr. Arian from MEFG and Tyne. Thank you, and over to you, sir. Thank you, Ms. Khan. Good afternoon, everyone, and a very warm welcome to all participants on the Q1 FY 'twenty seven earnings conference call, of ZUARI INDUSTRIES LIMITED. Today on this call, we have Mr. Atif Sahib, Managing Director Mr. Alok Sachin, Executive Director Mr. Jatin Jain, Chief Financial Officer Mr. Yadvinder, ZUARI INDUSTRIES LIMITED, a wholly owned subsidiary and the real estate arm of ZUARI INDUSTRIES LIMITED.

1:01 As Slimmer, before we start this call, this call will contain some forward looking statements, which may be based upon our beliefs, opinion and expectations of the company. As of today, these statements are not a guarantee of future performance and will involve unforeseen risks and uncertainties. With this, I hand over the call to Mr. Akhisab. Over to you, Sankir. Thank you, friends. On behalf of ZUARI INDUSTRIES LIMITED, I would like to extend a very warm welcome to all the participants who have joined us today for the Q1 financial results discussion. We start with the performance of the Sugar, Power and Ethanol division. Our sugar sales stood at INR 4.7 lakh compared to INR 3.6 lakh in the last year, the same quarter, which represents a 29% increase year on year, primarily supported by higher domestic quota allocation.

1:53 Average sugar realizations also improved to INR 4,116 per quintal from INR 4,036 per quintal last year. Despite the improvement in sugar volumes and realizations, margins remained somewhat under pressure, substantially due to about 8% increase in the SAP, which was INR 30 per quintal for the last season as well as somewhat lower recovery from ethanol, which was manufactured through the molasses route. Sugar recovery for this first quarter stood at 11.7%. Last year, we had not produced, so the numbers cannot be compared with last year. We the performance of the current quarter included six operating days in April 26, whereas there was no crushing operation in the last year.

2:43 Our ethanol business remained on a steady momentum with production increasing by 1% to 10138kl and sales grew by 5% to 10248kl. Average realization stood at INR60.70 per liter. Power sales for the quarter stood at INR62.8 lakh unit compared to INR7.7 lakh units for the same quarter last year. R and M activities are currently in progress at the ZUARI as we prepare for the upcoming crushing season. Moving on to our subsidiaries and joint ventures. The real estate subsidiary of the company ZUARI INDUSTRIES LIMITED, achieved a very important milestone this quarter with the 100% completion of the St. Rigis Residence of Dubai.

3:32 We are expecting to commence handovers shortly with all the preparatory activities currently underway, while the profit repatriation from the project has already commenced. This marquee project demonstrates our capability of successfully executing projects of similar size and scale in that region. We also continue to make steady progress on our asset light development management model. As you are aware, we are doing a project in Hyderabad called Gangotri Trebooja project, where the sales office and customer experience centers are now complete and marketing activities are in full swing. The project in Dusajes, a sellable area of 2,800,000 square feet. We have also executed a DM agreement for a 14.8 acre plotted development in Bangalore.

4:23 ZERA approval is in place for this project. We continue to evaluate further DM mandates across Bangalore, Kolkata and Hyderabad. In our subsidiary, Simon India, during the quarter, we executed projects worth about INR 30 crore with approximately INR70 crore worth of orders currently under execution. The ongoing crisis in West Asia has resulted in deferred CapEx across sectors affecting the engineering and construction industry as a whole. The company is exploring opportunities actively both within the country and outside to strengthen its order book, while working on digitalization and AI led initiatives. Our ethanol joint venture, ZUARI INDUSTRIES LIMITED, stabilized its plant operations during the current quarter and has secured orders until the month of October 2026.

5:20 As regards our investment portfolio, we continue to maintain strategic investments across our core portfolio that comprises, as you are aware, Chambal Fertilizers, ZUARI AGROCHEMICAL, PARADI PHOSITED, TEXMICORIL and Engineering and TEXMACO Infrastructure and Holdings. The value of our listed strategic investments as on June 30 was INR 4,223 crore, which was up 15% quarter on quarter due to market movement. Friends, we are making decent progress on our deleveraging exercise. Excluding working capital, the aggregate external debt of the company and its subsidiaries was INR1888 crore as against INR1909 crore at the end of the fourth quarter.

6:14 Profit repatriation from our Syntagis project in Dubai has commenced with part of the proceeds received in July and August and the balance expected during the current fiscal year. We also expect that the loan that was given to an associate company ZUARI AGROCHEMICALLS LIMITED will also be repaid to the company in the current quarter. Looking ahead, I think on the sugar prices and inventory, just to give you a recap, in the previous season, the sugar production was estimated to be 31,100,000 metric ton after accounting for ethanol diversion of 3,100,000 ton and domestic consumption of 28,300,000 metric ton and exports of 700,000 ton.

7:02 Closing sugar stocks are expected to decline to around 4,300,000 metric ton compared with 5,300,000 metric ton in the previous year. Probably this is what has led to the recent spike in sugar prices that you may be observing. The opening inventory for the next sugar season will be lower and the tighter supply position is probably dictating the higher prices of sugar. Indian sugar prices have risen 10% over the past month to record highs. Prices in Uttar Pradesh are currently at to INR4920 per quintal, with Maharashtra also registering reasonably high prices. With festival demand expected to gather pace, the pricing environment is expected to support sugar realizations.

7:53 The global sugar market has also remained supportive with prices at around AUD $6.06 per pound, close to their highest levels in over a year. This reflects expectations of tighter global availability, particularly following lower production in Brazil and increased diversion of gain towards ethanol. As regards our ethanol business, the realization, the prices continue to be static and therefore they weigh on the margins. However, we remain optimistic about the sector's outlook and expect the government to consider a price revision in the near term. As I have been mentioning in the previous calls, we continue to evaluate inorganic growth opportunities across our businesses. We also continue to adopt digital solutions across businesses to improve efficiency and streamline our work processes.

8:42 So which brings me to the end of my address for the current quarter, and I now invite my CFO, Jatin Jain, to take you through the financial results of the company. Over to Thank you, sir. Thank you, everyone, and good evening, everyone. I will begin by providing a review of ZUARI INDUSTRIES' performance. On a stand alone basis, the company reported total income of INR 283.9 crores in Q1 financial year twenty twenty seven, registering a 26% year on year increase, primarily driven by higher sugar sales volumes supported by increased domestic quota allocation and improved realization. EBITDA stood at INR 31.3 crore compared to INR 36.9 crores in Q1 financial year 'twenty six.

9:28 Profit before tax before exceptional items stood at a loss of INR 4.4 crores for the quarter compared with a profit of INR 0.9 crores in Q1 financial year 'twenty six. And profit after tax stood at a loss of INR 9.5 crores compared with a loss of INR 3.9 crores in the corresponding quarter of the previous year. The average cost of borrowings declined by 56 basis points year on year to 9.73% in Q1 financial year 'twenty seven from INR 10.29 crores in Q1 financial year 'twenty six. On the consolidated basis, total income stood at INR 27.5 crores in Q1 financial year 'twenty seven, registering a 22% year on year increase from INR 67.6 crores in Q1 financial year 'twenty six. Consolidated EBITDA stood at INR 29.8 crores during the quarter. Profit before tax before exceptional items stood at a loss of INR 5.4 crores compared to a loss of 0.4 crores in the last corresponding quarter of the previous year. And consolidated profit after tax stood at a marginal profit of INR 0.05 crores compared with a loss of 0.48 crores in Q1 financial year twenty twenty six. Finance cost has declined by INR 1.46 crores year on year to INR 61.5 crores from INR 63 crores in Q1 financial year twenty twenty six.

10:41 The company continued to benefit from improved operational efficiencies, disciplined financial management and reduction in borrowing costs during the quarter. In respect of our updates on our subsidiaries, one of our major subsidiaries, ZUARI LIMITED, Q1 financial year total income grew by 25% year on year to INR 33.9 crores versus INR 27.1 crores in Q1 financial year 'twenty six. Q1 financial year 'twenty seven EBITDA improved to INR 24.6 crores from INR 21.7 crores in Q1 financial year 'twenty six. And profit before tax stood at a loss of INR 0.7 crores as against a loss of INR 1.5 crores in the corresponding quarter of the previous year. For Salmon India Limited, our total income stood at INR 11.7 crores compared to INR 15.9 crores in the corresponding quarter of the previous year. For ZUARI INDUSTRIES Limited, our total income stood at INR 4.1 crores as compared to INR 5.9 crores in the corresponding quarter of the previous year due to decline in the market.

11:39 Similarly, for our broking business, Wari Insurance Broker Limited, gross written premium for Q1 financial year 'twenty seven reached to INR 20.8 crores from INR 33.3 crores in Q1 financial year 'twenty six. Brokerage income from Q1 financial year 'twenty seven stood at INR 3 crores compared to INR 3.8 crores in Q1 financial year 'twenty six. And EBITDA stood at INR 2.2 crores in Q1 financial year 'twenty seven versus INR 3.2 crores in Q1 financial year 'twenty six. Thank you, Darshan. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask question may press star and one The first question is from the line of Saul Mal Shah from Paris Investments. Please go ahead.

12:50 Yes. Hi. Thanks for the opportunity. Sir, as we mentioned, repatriation of profits have started to come from our Dubai project. So can we have some rough estimates, how much are we expecting in the current quarter and how much in December quarter? Yes. So we have in the current quarter received million, which in Indian rupee terms translate to INR142.58 crores. And we had projected that we will receive INR900 crore, up to INR900 crore in the current financial year. And I should say that we are on track to receive the balance amount. Okay. And everything should be completed by December quarter or you feel that there might be some delays?

13:41 I think we have always given a guidance that we should expect to complete a repatriation of about INR900 crores in the current financial year. Okay. Okay. And are we facing any I mean, just to understand, are we facing any challenges with respect to this project? I mean, buyers backing out or asking for discounts considering the current geopolitical issue? No, we are not facing any challenges whatsoever so far. Okay. Okay. And sir, once we pay off this INR 1,100 odd crores of debt, so how much reduction in interest cost we can have in FY 2028? So you can calculate it actually. What is our average cost Average cost of borrowing is 9.73%.

14:27 So considering a reduction of INR 1,100 crores in our overall borrowing, we can see a decline in our finance cost. Okay. Okay. So at least INR 100 crores to INR 110 crores, we can see reduction. Okay. Okay. Sir, if I may ask one more question? Yes. Yes. Yes. Yeah. So what is the idea behind buying shares of ZUARI INDUSTRIES LIMITED $1.50 crores? And by when we can complete this transaction? This transaction, like it will be completed in one more tranches. So we have taken an ICD approvals and the strategy behind this transaction is that we want to consolidate the investments which are there in our different companies at the holding group level.

15:20 Very simple and straightforward. We are consolidating all the investments into the main holding company, which is ZUARI INDUSTRIES. Historically, this investment was lying, some of it was lying in ZUARI INDUSTRIES, some of it is lying of in ZUARI INDUSTRIES, which is the main listed entity. And it will also help these transactions, deleverage those entities, whatever debt they may be carrying, they will use this to settle their external debt. Okay, okay. Sir, just to confirm on your opening remarks, you mentioned we will be receiving this INR $2.50 odd crores from ZUARI INDUSTRIES That's what we are expecting. Okay.

16:06 Okay. That's it from my side. Thank you and all the best. Thank you. Thank Thank you. The next question is from the line of Guanjin Modi, an individual investor. Please go ahead. Good afternoon, sir. Sir, the first question was regarding the recent price spike, which you just mentioned. So also we heard some rumors about government problems, some policies regarding transferring that to ethanol sector. I think some deals around that. So any comments on that? How are we hosting that to impact our financials? As a policy, we do not comment on rumors, and it's a question of serious government policy.

16:51 As and when formal policy is announced, we will take a stand, Ujjain. Okay. So second question was regarding the previous party has been mentioned about ZUARI INDUSTRIES heard of a filing from ZUARI INDUSTRIES LIMITED. We are expecting, as I mentioned earlier, the entire INR258 crore outstanding debt to be repaid to us in the current quarter. So there is no extension as per the five year which was made by ZUARI I think what really matters is that we expect to get repaid and that is what is absolutely important for our industry.

17:41 Got Any plans further to increase our ethanol production given the books we have till October and all the book we have? Do we see anything? Or are we filing for any tenders right now from INCs? Can you repeat the question again, please? And which entity are you talking about? I'm talking about Indian and the ethanol business in our sector. This is regarding the order book which we have till October. We still see any tenders coming up from ONC and are you planning to participate? Absolutely. We are expecting the next round of tenders to come sometime in October and the company will be certainly participating in that round.

18:34 That's all from my side. Thank you. Thank you. The next question is from the line of ZUARI INDUSTRIES Hi, sir. Good afternoon. Good afternoon. So I had a few questions. If management were to run its business by expected value creation over the next five years, how would you prioritize sugar and ethanol, real estate, engineering services and strategic investments such as ZFEL and TIHL? And what KPIs should investors attract for each segment? As we have been mentioning in our previous calls, these strategic investments are going to continue in our portfolio.

19:26 You notice that they are in strategically important sectors of the Indian economy. Primarily, our investments are in fertilizer and railways. And as prudent analysts, you must be seeing the performance of these companies and participating in their investment calls as well. So we will continue to hold our strategic investments for sure. As far as VARI INDUSTRIES is concerned, we certainly are quite long on real estate as well as engineering and construction. But I think in terms of the growth opportunity, we definitely see opportunities in real estate much more than engineering and construction. Engineering and construction is still a fledgling business.

20:14 My sense is that in the longer term that will also grow, but it's the real estate which will provide the momentum. On the sugar side, we are now operating a facility at 100% capacity utilization. It has demonstrated robust performance. And while we hope to continue our performance in the ensuing season, we remain open to idea of acquisitions should they present themselves. So tomorrow, let's say, an opportunity comes and we find it worthwhile, there could be some additions to capacity. Otherwise, the growth vectors will come from real estate and engineering and construction.

21:01 I have mentioned in the past as well that ethanol used to be a stated objective. And we have placed on record that our objective is to grow that ethanol business to 1,000 kLPD. We had to take a pause because of the substantial overcapacity that came to light during the last tenders against the INR $10.50 crore of tenders, 1,800 crore worth of offers were received. So obviously, we have put our CapEx plans on hold. But tomorrow, if the country decides to roll up the policies and increase ethanol blending and we have flex fuel vehicles and whatnot, I think we again can see whether we want to grow our business both organically and inorganically.

21:50 Okay. So that's all. So the stand alone revenue grew 27% year on year to INR 66.5 crores, but the operating EBITDA declined from INR 22.4 crores to INR 13.9 crores. So if you could help me what were the key drivers of margin compression despite the strong revenue growth? Yes. I drive you in terms of the major hit in terms of our margin is the increase 8% increase in the sugarcane prices. So government of UP in the last financial sugar season, they have increased the prices of sugarcane from INR $3.70 per quinter to INR 400 per quinter, which has impacted our margin profitability.

22:37 That helps. And sugar segment revenue increased 34% year on year to INR 236.8 crores, yet the segment profit declined to INR 8.4 crores from INR 12.3 crores. So if you could explain the factors impacting profitability, including gain cost, recovery rates or inventory movements? So as you can see in terms of our increase in our revenue, if you see on an year on year basis, our revenue has jumped from INR 176 crores to INR $2.36 crores. So the major driver is that we have got a higher quota allocation from Government of India. In this current quarter, we have sold additional INR 1 lakh quintal of sugars, which has bring in an additional revenue of INR 45 crores to the company. On account of our segment results, our segment results have fallen from INR 12.29 crores in the last financial years to 8.36 crores.

23:29 The major driver, which is impacting our profitability for the sugar business is the increase in our cane cost that has happened in the last sugar season. Okay. So that's helpful. One last question. The consolidated part was also 0.05 crores despite high revenue. And excluding associate income and exceptional items, So what are the what is the sustainable earning profile of the core businesses over the next twelve to eighteen months? Sustainable? Like, in terms of sustainability of your trade, like as we have highlighted earlier that there has there will be repatriation of INR 1,100 crores in this current quarter. No, she's talking about the operating performance of the three segments, which is sugar, power and ethanol.

24:26 So her question is about sustainability. Will you be able to sustain these numbers, etcetera, etcetera? Yes, ma'am. So let me respond to it. As I mentioned earlier, the segments that you see will again come back into action as we start the next season. Our operating performance has been very robust in the previous season, and there is no reason why we should not repeat that performance, if not better it. The good news is that the prevailing prices of sugar are quite high, and it's easy for anybody to do some math around what would it do to the numbers of sugar companies. We also hear that the sugarcane crop, particularly in Uttar Pradesh, is doing quite well.

25:16 So we look forward to a fairly decent quarters ahead. The next question is from the line of Satish Sharma from Preehoun. Please go ahead. Yes. Good evening, sir. Can you hear me? Yes, please. Sir, I was going through the circular you had come out with at the time of the results. That's why you mentioned that, you know, you're going to buy the shares of ZUARI LIMITED. Last time when you did the same from ZUARI INDUSTRIES, you bought the share at $1.90 and the share price has gone to $11.05 now.

26:04 So what is the logic of doing all these things when you're losing money and converting all money... Shareholders money to other companies? Does it... It doesn't go with the proper assets of the company? Can you clarify what are you doing with that? See, the last transaction did not go through. It was an enabling approval that was taken. But there was no actual transaction that took place. As I mentioned earlier, I mentioned earlier, is part of our strategy to consolidate all listed equity investments in the main holding company. And as it happens under the laws of the land, these transactions will be at market price, right. And the share prices then, of course, post acquisition would depend on the performance of those companies.

26:51 So just to reiterate, the old transaction that you mentioned, there was an enabling resolution, but no transaction actually took place. And this time as and when we do the transactions, I think you will get to know again, formally we will notify everybody and we will consolidate everything in the holding company. What was the benefit of the shareholder of the ZUARI INDUSTRIES? What is the logic? Already there is it's holding is there in ZUARI INDUSTRIES, which is again our subsidiary only. So what is the logic to the shareholder of our company? What is the advantage to that? The logic is that it should be in the main listed company and the listed unlisted company may have some external debt that can be repaid as a result.

27:39 But but but but I what I what I my main question was when we try to do the same with this material, which has went down from one ninety to 90 to As I explained earlier, the transaction has not gone through. Therefore, there's no point talking about it. Okay. Thanks a lot. That's it. The next question is from the line of Saul Bil Shah from Parex Investments. My question is on our furniture division. So I think we are still having losses in this division. So are we looking to dispose it off? Any value we can generate through that? I think right now whatever you see the losses coming from that division are on account of the small little expenditure on our handful of people that have been deployed, some expenditure on maintenance and some ICDs that they have got to service those ICDs. Other than that, there's no other expenditure that one is incurring in the furniture division.

28:50 We have been talking to people who could potentially revive that business. If something works out as part of the revival plans, we will revive it. But otherwise, we will make some decisions about this business by the end of this financial year. Correct, correct. That's it from my side. And sir, just a feedback. So I really appreciate since last few quarters, we have been going quarterly con calls. And we can see management's intent towards shareholder value creation. So Absolutely. And you will you will see that in coming quarters as well. You will see that in coming quarters. Because, sir, we have enormous, I mean, value sitting inside industries and all of our group companies, but still we are not able to, you know, fully evaluate.

29:40 So thanks for doing all the quarterly calls and all, and we look forward for them. Thank you. Thank you. Thank you. The next question is from the line of Soumya Raghavanci from Nirva Securities. I just have two questions from my end. Firstly, sugar realization improved to 4,116 per quintile, and sales volume rose to 4.7 lakhs quintiles. What is your outlook on domestic sugar pricing and exports for FY twenty seven?

30:29 And how sensitive are earnings to changes in sugar prices? I would I have already dealt with the pricing issue in my comments. And I mentioned that while the prices have been somewhat muted in the first quarter and they were not commensurate with the rise in input prices, The prices current prices are significantly higher. And I also outlined the reasons. Of course, the financials of the company are very sensitive to prices. As far as exports are currently the exports are not allowed. So we don't foresee that in the current situation exports will be permitted.

31:18 And I think we are looking forward to a decent quarter on the back of the current prices. Okay, sir. Got it. Sir, ethanol sales increased only marginally despite capacity availability. Are there any constraint related to feedstock allocation, government policies, procurement by OFCs? No, there is no constraint from the government side. And whatever ethanol we whatever molasses we produced, we have consumed to making ethanol. Historically, we have bought molasses also from outside opportunistically. But this year, the prices of outsourced molasses was not economical.

32:09 And therefore, we decided not to pursue those purchases and make ethanol. And that's why you see the numbers as they are. But tomorrow or in the next season, if you find that we have an opportunity to buy and produce, we will do that. And we have also be mindful of the fact that before that, there'll be a tender process and there'll be an allocation, etcetera, etcetera. Okay, sir. So my next INDUSTRIES question is on ZUARI INDUSTRIES. For only six days during the quarter. What are your expectation for cane availability and crushing days in the upcoming season, particularly in Uttar Pradesh?

32:58 We can't speak about Uttar Pradesh as a whole. As I mentioned a short while ago, in our command area, the sugarcane crop seems to be maturing quite well. And we are expecting a very healthy cane production subject to weather holding up and not creating any difficulties, weather or disease. These two factors always bother us. So if there are no unusual weather events or an outbreak, disease outbreak, we expect a robust gain production in our command area. All right. So the last question from my end. The company disclosed the potential Uttar Pradesh Ethanol import export pass fee exposure of about $0.07 lakh but has not made a provision. Can you discuss the legal position and potential downside risk if the case is not resolved favorably?

33:57 So this is the case which has been there for all the sugar mills are being against this case with the court. So we have not created the provisions, but we have given an indemnity. And the court cannot make a retrospective change in the law, bringing in an effective adjustment that you pay an export fees for the ethanol that you export out of Uttar Pradesh. So we are very hopeful that it will not come as a provision in my books of accounts going forward because law cannot be made retrospectively. Has to be made prospectively. Okay. So all right, all right. That's it from my side.

34:44 You so much, Thank Thank you. The next question is from the line of Jayanta Kumar, an individual investor. Please go ahead. Hello. Thank yeah, you for giving me thank you for giving me an opportunity to talk in this call. My first question is on the monetization of plan holding by ZUARI INDUSTRIES and ZUARI INDUSTRIES and INTOVIOUS ZUARI LIMITED, its subsidiaries, ZUARI INTOVIOUS INDUSTRIES and TEXNACO. So want to enter into mining business. So can you throw some light on these two items?

35:33 I can only speak about ZUARI INDUSTRIES, and I can only speak about the land monetization matter of ZUARI INDUSTRIES. Let me clarify that ZUARI INDUSTRIES has no intention or has had no intention in the past and has no current intention of getting into mining. So coming back to the land monetization. Yes, it was a part of our strategy for deleveraging the company. But the Gujarat the Goa assembly passed a law, which came in the way and the circle rates were also enhanced very, very substantially, making these kind of deals very, very complex and challenging.

36:18 So for the time being, I think all land monetization plans as far as Hawaii is concerned is put on hold. While we are using all other avenues to deleverage ourselves, primarily through the repatriation of profits from Dubai as well as repayment of loans from the associate company, ZUARI INDUSTRIES Thank you, sir. One more question regarding the reverse merger of consolidation along subsidiaries. So when can we expect this to happen? Currently, we are not thinking of consolidating any of our subsidiaries in ZUARI INDUSTRIES LIMITED. We are managing majorly our focus is on our real estate business and the ethanol business that we do it through ZUARI INDIAN.

37:10 And some little other subsidiaries, which provide us a marginal profit to our to the holding company. Currently, we don't have any plans to consolidate our subsidiaries in the main holding company. Okay, sir. Thank you. The next question is from the line of Yashweta from Escape Capital. So I've got a few set of questions. So firstly, like the company highlighted, digitalizations and AI led initiatives within time in India. So can you quantify the expected impact on project execution time lines, manpower productivity or the bidding efficiency over the next few years?

37:59 These are too early actually. Honestly, if you ask this question to any CEO, they will find it very difficult to answer. I think these are early days. We are experimenting and implementing various tools. I think we still have to implement quite a few of these tools only when we will have a sense of how much is the impact and quantification of impact would be possible. So that's the short answer that I can give. Philosophically speaking, what are we trying to do in Simon India? The engineering work is very, very labor intensive. You deploy so many thousands or hundreds of engineering hours to, let's say, produce a drawing.

38:45 We are wondering whether by using digital tools or artificial intelligence, we can compress that time. Now at this stage, I can't quantify and tell you that in this project, we did this, etcetera, etcetera. So number of experiments are currently underway and the initial results appear to be quite encouraging. And hopefully, in the next few quarters or maybe next year sometime, I'll be able to happily share with you some very good use cases of how we saved so many engineering hours on a particular project. Understood, sir. And also, like the given government continued push for ethanol blending, so are there any plans to expand your distillery capacity or shift to some feedstock mix or increase participation in higher margin ethanol categories?

39:34 Right now, do you have a situation where there is significant overcapacity? As I mentioned earlier, the last tender that came against an order of INR $10.50 crore liters, the offers that the government received or OMCs received was INR 1,800 crore liters. We understand that the actual capacity may have gone up a little higher and maybe it's INR 2,000 crore liter. So you really don't want to increase capacity in that environment unless there is a significant increase in blending percentage. And we are waiting for the government. They have announced higher blends, 35% and even 100%, and there have been a couple of vehicle launches also.

40:22 But there is no real increase in the demand for ethanol as far as OMC are concerned. And it will all be tested and proven when they come up with the new tenders in the month of October. So I think it's just a couple of months away and when we will see the tenders coming in. And we will know the numbers and then we can plan accordingly. If we see that the government is keen and the demand for ethanol is increasing very substantially and there is an undercapacity, then we will invest. Of course, we are now people with reasonable experience in the sector and we can set up distilleries, we can buy distilleries. But we will have to wait until we see clarity on the demand side.

41:09 Got it. Got it. And also your other expenses declined substantially on a Q o Q basis. So was this primary seasonal? And like what is the normalized quarterly run rate investors should model going forward? Yes, ZUARI sir. So our other expenses remain in the range of 14 crore, INR 14 crore to 15 crore every quarter because this is a period during which we do repair maintenance for our sugar division. No, no. Is there a difference between Q4 and Q1? Q4 is a Q4, other expenses are on the higher side. So that's what you want to mention. Q4 other expenses are on the higher side because it is a pure operating period. During that, ZUARI has operated for ninety days. And during this Q1, our other expenses are in the range of INR 14 crores. During this period, we majorly do the repair and maintenance for our sugar mill and power division.

42:12 Understood, sir. Understood. And on year on year basis, if you see, last year, this number was INR 14.46 crore for the same quarter, Q1. This rate is INR 14.36 crore. So it's practically the same. Understood, sir. And just the last question from my end. So the unallocated income also increased to INR 13.7 crores from around INR 8.1 crores year on year. So like what are the major contributors? And are these levels likely to continue in upcoming quarters? The income which has increased on account of unallocated is the ICD's income that we have given to our group companies. So ICD that we have given to our group companies and also the difference is that our expenditure on our other divisions for our sensor business and investment businesses have reduced.

43:10 So net of our unequival income has increased net of unequival expenses. Okay, sir. Got it. Got it. Thank you so much. Thank you. The next question is from the line of Pail Sharma from DD Capital. Please go ahead. Hi, sir. Thanks for the opportunity. I have some couple of questions with me. So my first question is, like, associated JV income contributed $3.43.7 crore percent, like 343.7 crores during the quarter, which largely offset the operating level losses. So could you please help us understand the key contributors to this income and also how sustainable they believe these earnings are going forward?

44:01 So the key contributor in our share of profit from associates is from ZUARI AGRO CHEMICALLS, ZUARI AGRO CHEMICALLS Limited. So ZUARI AGRO has contributed INR 39 crores in the share of profit of loss from JV and associates. And that profit in the ZUARI INDUSTRIES LIMITED, has majorly come from parathy phosphates. They have given a profit of INR $3.93 crores during the first quarter. So of that, 50100% has come in ZM PPL and of that, 24 has come in ZUARI INDUSTRIES LIMITED:] So let me try to rephrase what Jatin has said. The bulk of this item is coming from the performance of ZUARI AGROCHEMICLES LIMITED.

44:50 ZUARI AGROCHEMICLES has a joint venture with OCP Morocco called ZMPPL, and ZM PPL holds equity in Paradeep Faucets. So the underlying asset is really Paradeep Faucets. Its performance reported performance for the previous quarter was crores of PAT, which has been consolidated in ZM PPL and has flowed back to ZUARI AGROCHEMICALLS. Understood, sir. Understood. And the next question is, like, this handover is now underway at ZUARI LIMITED. Like, what proportion of the project receivables is still outstanding? And, also, how much cash, repatriation should investor expect over the next four to six quarters?

45:45 So let me answer the second question first, which I've already answered. Our guidance for the current financial year is INR 900 crore of repatriation of profits and of which we have received INR142 crore. The balance amount, which is a little over INR750 crore is on track. And that guidance still holds, and we just provided that earlier in response to another question. As far as the balance payments to be made by unitholders, I would request my Alok Banerjee to just clarify. Alok, if you are there in the call, can you please provide this answer?

46:30 Yeah. Like... Hi. Good afternoon. So since we have received a 100%, you know, building completion certificate, we are now starting to hand over the units to the residents who have purchased. And as Mr. ZUARI said earlier, that we expect that in this financial year, the balance about INR800 crore should come in by the end of the financial year. No, that's obviously I've given already Alok. The total amount estimated in this year is INR900 crore of which INR142 million has come and INR78 crores let's say will come by the end of this year. That clarity everybody has got. What she is asking is a little different.

47:16 What is your payment plan and how much more do you need to collect from the buyers flat apartment buyers? That's what she is asking. Yes. We need to collect roughly another about or our shares. Percentage? On percentage, we need to collect about 40% more. Percent of Yes. The top So we need to collect 40% to 45 of the customer collection. In terms of our payment plan, the payment plan is 50%, 50%. So now we have raised the demand also the customer post receipt of the completion certificate.

48:02 So we expect to receive back receive the money from the customers in this current quarter. Understood, sir. Understood. And my last question is that the real estate segment has seen a significant increase in segment assets, like crossing INR77000 crores. And like, could management provide more visibility on the monetization timeline for these assets and the returns that investors can expect from them? So in terms of our segment assets, segment assets for our real estate division as on 06/30/2027 stands at INR $7.70 crores, which majorly comprise the receipts from our Dubai projects of INR 400 crores. So in the next one to two quarters, majority of our segment assets for our real estate divisions will come and the actual realization of that cash will happen in this current financial year.

49:02 Understood. Thank you so much, sir, and all the best. Thank you. Thank you. Thank you. The next follow-up question is from the line of Sondul Shah from Parex Investment. Please go ahead. Yes. Hi. Just one question, Can you throw some light on ZUARI INDUSTRIES? So how are we looking to expand this business? Any more DM projects in the pipeline? Because I think few quarters back, mentioned to increase this to INR 10,000 crores. So can we have your views on the same? Alok, you want to take this question? Yes. Okay. I'll do that. See, what we already have is an order book of about 6,000 crores roughly.

49:52 And we are now in the process of launching the project in Hyderabad and Bangalore in the next month. And once we launch and we see the success, we have quite a few deals in the pipeline, which will then rectify. As of now, we are focused on getting these projects off the ground. And thereafter, we will be able to close out on further projects in these two cities, which is our focus area. If I may add, I think the gross development value of the projects, Alok, that you have in hand is INR 4,900 crores. And we did mention that our aspiration is to have a GDV of INR 10,000 crores. So one can say that we are halfway in that journey.

50:43 50% of the journey is covered. The route that we have taken, which is the asset light, investment light approach of DM model is a difficult and challenging route. One has to find the right kind of people with whom our brand can be associated and the project should also be bankable projects with good prospects. So it is not easy to just grow it because we are not simply buying land and launching projects. So the bottom line is that we are halfway there. As Alok mentioned, we continue to scout for opportunities, particularly in South India for TM projects.

51:30 And our aspiration is to go to 10,000 as I mentioned earlier. Correct. And the Bangalore project, which you mentioned is the plotted development one? Yes, it is. As a very interesting project, it's about 15 acre plotted development with RERA approvals in place. And what Alok tells me that it should do reasonably well. Okay. And generally, this plotted development should complete faster, right? Yes. Yes. That's true. So by when we can expect to complete that project? It it takes a cycle time of about fifteen months from the date of launch. Okay. Fifteen to eighteen months. Unlike a regular apartment project, it will be three to four to five years.

52:22 Okay. Okay. Fine. That's it from my side. Thank you. Thank you. Ladies and gentlemen, as that was the last question for today, I would now hand the conference over to Mr. Arian for closing comments. Over to you, sir. Thank you. Really appreciate Aadin's wish. If you have any please reach out to us at MFG Investor Relations. Thank you. You. On behalf of the management, I would like once again to thank all the investors, analysts and potential investors who have joined the call today. We really appreciate your questions and we look forward to interacting with you in the next quarter. Thank you. On behalf of ZUARI INDUSTRIES LIMITED, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.