Manorama Industries Q2 FY27 Earnings Call: Revenue Jumps 41.9%, Sees 25-27% EBITDA Band

Strong Quarter with Margin Resilience Despite Freight Headwinds

• Q2 FY 2026-2027 revenue of Rs.459 crore — up 41.9% YoY from Rs.323 crore in Q2 FY 2025-2026, driven by strong demand, higher volumes, and a stronger value-added product mix (CFO Ashok Jain).
• Q2 EBITDA of Rs.118 crore, up 34.4% YoY — margin of 25.8% despite higher inbound freight costs and global macro events affecting shipping routes, which the CFO described as largely external and tied to the border logistics environment.
• Q2 PAT of Rs.81 crore, up 51.8% YoY — PAT margin expanded 114 bps to 17.6%.
• H1 FY 2026-2027 revenue of Rs.863 crore (+40.8%) — EBITDA grew 38% to Rs.224 crore (26% margin); PAT grew 59.2% to Rs.159 crore with margin up 213 bps to 18.5%.
• Volume contributed ~85% of the YoY revenue increase — price realization contributed ~10-15% (Ashish Saraf).
• Other income of Rs.25 crore in H1 FY 2026-2027 — comprising Rs.15 crore forex gain and Rs.10 crore FD interest (CFO).
• Net debt to equity of 0.0x — as of 31 September 2026, vs 0.3x at end FY 2025-2026; cash and bank balances stood at Rs.498 crore.

Restructured Leadership, Four-Pillar Growth Agenda

• Leadership restructuring announced — Mudit Kumar Singh as chairman (governance and risk oversight), Deep Saraf as managing director (operations, manufacturing, supply chain, capacity utilization, project delivery), and Vinita Saraf as President - Business Excellence and Development; Ashish Saraf said this is "not a change of direction" and strategy, values and culture remain the same.
• Four growth pillars outlined by Deep Saraf — expand capacity, scale refining, premiumize the mix, and expand globally, with discipline.
• Quarterly revenue now above Rs.400 crores — customers in more than 39 countries and exports at 61% of revenue (period unspecified), with the company "about to" undertake major expansions.
• Exports at 61% of H1 FY 2026-2027 revenue — domestic-to-export mix of 39:61, spanning Asia, Europe, US, South America, the Middle East, and Africa.
• Milcowa Innovation and Research Center — works with customers and R&D teams on application-specific products to move from ingredient processing to specialized solutions.

Debottlenecking Underway; New Capacity Slated for Q3-Q4 FY 2027-2028

• Existing capacity at ~85% utilization — on expanded capacity of 47,500 tons in Q2 FY 2026-2027; Ashish Saraf expects 85-90% utilization for the existing setup in FY 2026-2027, with debottlenecked capacity expected to be completed by end of FY 2026-2027.
• 4,500 MTPS debottlenecking project "under planning in Q3" FY 2026-2027 — commercial production timing to be updated after accreditation.
• New capacities targeted to commission around Q3-Q4 FY 2027-2028 — with gradual volume contribution from FY 2028-2029 onwards; new plants will start at ~40-50% utilization and reach optimum 85-90% roughly 2-3 years after commissioning.
• Rs.70-75 crore invested in current capex to date — against analyst-cited capex guidance of Rs.225-250 crores and total capex of Rs.460 crores (period unspecified); "a good chunk" of investment expected in H2 FY 2026-2027, with more in FY 2027-2028.
• Asset turn of ~6x generated from the existing asset base — from past forward-integration investments; Ashish Saraf sees ~6-7x asset turn at optimum utilization, depending on product mix, for FY 2027-2028.
• Burkina Faso backward integration progressing — in a critical in-house design and engineering phase; land acquired but awaiting regulatory approvals; project timelines targeted for FY28, around Q3 and Q4 of that financial year. Analyst Kaushik Mohan (Trinetra Asset Managers) estimated a 2-3% company-level benefit; Ashish Saraf did not quantify it, saying it is too early to communicate a percentage.
• Latin America facility ramping gradually — existing capacity fully booked with current customers; volumes shipped from Indian plants to the Latin plant for rework are increasing, with ramp-up "maybe in a year or so."

25-27% EBITDA Band; Freight and Input Inflation Weigh on COGS

• EBITDA margin band of 25-27% for FY 2026-2027 — Ashish Saraf declined numeric guidance but said the band "looks comfortable," with modest quarter-to-quarter movements possible due to macroeconomic factors and business risks.
• Value-added products at ~75% of total sales value in Q2 FY 2026-2027 — up from a prior 65-70% range; comfortable band with existing capacity is 70-80% (FY 2026-2027), and Saraf expects 70-80% contribution in the medium term (period unspecified).
• 75% of volume from CBE and stearin fractions in Q2 FY 2026-2027 — mostly from the fractionation unit; remainder from olein, refined butters, and byproducts like DOCs.
• Raw material cost rose ~480 bps in H1 FY 2026-2027 — while other expenses fell ~360 bps; Ashish Saraf attributed this to gross-profit-level costing, mainly freight costs from global macroeconomic events and recent fuel and transportation price hikes; no change in financial reporting format.
• Shea raw material prices rose in Q2 FY 2026-2027 on higher freight costs — on imports from West African countries, already reflected in the books; general input-cost inflation of ~5-7% across raw materials also cited. Management did not give a YoY freight percentage on the call and said it would share the exact figure offline through its advisors.
• Margins should improve gradually — from product mix changes, operating leverage, and economies of scale as phased capacity comes online; no specific period was given in the answer.
• Solvent fractionation plant still in planning and engineering stage — complexity arises because the company processes wild crops whose yields vary across raw materials; updates to follow once the project substantially materializes.

Demand Healthy and FY 2027-2028 Booked; Inventory Build Tied to Shea Procurement

• No slowdown or destocking in demand — from global chocolate or cosmetic customers for CBD and specialty fats despite the geopolitical situation, as products are "short in supply" in Q2 FY 2026-2027.
• Capacities "quite booked" for FY 2027-2028 — demand described as "very healthy"; Q2 growth came from both new and existing customers, though the exact split was not disclosed.
• Inventory rose to Rs.1,000 crore as of 31 September 2026 — from Rs.728 crore in March 2026, driven by earlier shea nut procurement from West African regions (where the company recently expanded) and seasonal sal and mango seed procurement; receivables up ~82% from March 2026 were attributed to the last 15 days of September 2026 revenue, with remittances already received.
• Inventory expected to normalize in Q3 and Q4 FY 2026-2027 — heavy inventory in the last quarter of the year is typical seasonality; the build will not be significant in Q3 and Q4 FY 2026-2027.
• H1 FY 2026-2027 operating cash outflow of Rs.252 crore — attributed by the CFO to inventory timing rather than the underlying business; working capital expected to normalize through H2 FY 2026-2027, funded through existing banking limits and internal resources.
• On inventory supporting ~Rs.1,800 crore annualized sales — Ashish Saraf said the Rs.1,000 crore inventory should not be simply annualized, but past unit economics suggest the company should be clocking that kind of target with this inventory.

Healthy FY 2027-2028 Top-Line Expected; Management Declines Numeric Guidance

• Healthy top-line growth expected for full FY 2027-2028 — supported by the H2 capacity ramp-up and remaining debottlenecking (Ashish Saraf); a 5-10% price benefit from inflation and other factors is expected to contribute to the sales mix in FY 2026-2027 and FY 2027-2028.
• Management declined numeric revenue and EBITDA guidance — Ashish Saraf said comparing growth against 40%, 30% or 20% is not the right approach, as the growth plan is a longer-term vision and such figures are not what the company communicates to shareholders.
• Good growth expected in Q3 FY 2026-2027 — following good growth reported over the last few quarters; capex, product mix and business fundamentals plan "remains totally intact."
• Cocoa price correction has no direct impact on realizations — Ashish Saraf said contract pricing does not move directly with cocoa prices, as CBE differs in raw materials, processes and technology; recently renewed contracts are delivering cost-margin pass-through and prices for current production are stable.
• CBA opportunity is "a process which takes time" — Ashish Saraf did not give a specific timeline for CBA product approvals or trials, saying the team is focused on project priorities and applications being worked on.
• Execution risk on expansion timelines — analyst Mayur Parkeria (Scriptbox Wealth Managers) cited a 75,000 tons capacity expansion vs an earlier 25,000 tons greenfield plan, "as guided" by FY28; Ashish Saraf said management believes it should be meeting the project timelines shared with shareholders and will share any modifications or updates with stakeholders.
• Closing remarks from Deep Saraf — strong H1 FY 2026-2027 delivered with a clear leadership structure in place; the integrated business model, sourcing capabilities, growing value-added portfolio, global reach, and robust balance sheet position the company to capture the long-term opportunity in CBE and specialty fats.