Manorama Industries Limited

Q&A

Q: What was the capacity utilisation for this quarter, and what is your guidance for the full year with the upcoming de-bottlenecking?

A: We achieved an 80% utilisation rate on our capacity in Q1. With the de-bottlenecking of our second plant expected around Q3 which will add 4,500 tonnes and take total capacity to 52,000 tonnes per annum we expect full-year utilisation to be around 80–85%.

Q: Could you share the revenue contribution and realisation per ton details for your CBE (Cocoa Butter Equivalent) and CDN segments?

We don't share per-ton realisations as our products involve different custom formulations and recipes per customer. However, product contribution stands at 71.4% combined for CBE and CDN (with CBE alone at 30.3%) and the remaining in stearin products. Overall pricing for our value-added products remains stable.

Q: How will the export ban on shea nuts from countries like Nigeria impact your raw material sourcing strategy?

A: Nigeria is just 1 of 22 shea nut-producing African countries. We operate through local subsidiaries in 10 different African regions to source seeds and butter. Temporary single-country bans do not materially impact our sourcing strategy given our vast geographical footprint in Africa.

Q: What is the revenue/sourcing bifurcation between imported and domestic raw materials?

A: Sourcing is broadly split 50–60% from imported seeds and butter (mainly shea nuts/butter from Africa) and 40–50% from domestic sources (sal, mango, and other exotic Indian seeds).

Q: What is the total proposed CAPEX plan and how much will be spent in FY27?

A: Our total proposed CAPEX plan is approximately ₹460 crore. Out of this, we plan to invest ₹225 to ₹250 crore in FY27. This includes expanding our solvent fractionation and refinery capacities in India and our backward integration project in Burkina Faso, Africa.

Q: When will the new CAPEX capacities be operational, and when will they reflect in revenue?

A: The new capacities are targeted for commissioning around Q3 FY28. They will start contributing gradually from then, but the full financial impact will be more visible in FY29 as capacity utilisation ramps up.

Q: What is the investment for the Burkina Faso facility, and what is the expected payback period?

A: We are investing around ₹120–130 crore in the Burkina Faso project (where we bought ~24 acres of land). We expect a 3-year payback period once the plant is operational, which will improve bottom-line efficiency and reduce freight costs.

Q: Could you elaborate on the downstream CBEA opportunities you are exploring?

A: We are introducing E-CBEA (Enzymatic Cocoa Butter Equivalent) using an enzymatic process to convert liquid oil fractions into hard fractions (cocoa butter alternatives). This value-added forward-integration technology allows us to use our co-products/by-products (like olein) for food, chocolate, confectionery, and HORECA applications.

Q: What is the status of the Brazilian partnership, and when will commercial production scale up?

A: We started trial production dispatches to the Brazilian processing facility last quarter. It will gradually ramp up over the next 2 to 4 quarters as dispatches from our Indian base plant scale up.

Q: Revenue grew 39% year-on-year this quarter. How much of this was driven by volume growth?

A: Around 85% of the year-on-year revenue growth was volume-led, with the rest coming from realizations/mix.

Q: Employee expenses decreased by 20% quarter-on-quarter. Is the current expense level sustainable?

A: The previous quarter included a one-off provision for performance incentives. Going forward, the quarterly employee expense run-rate should hold stable at around ₹14 to ₹15 crore.

Q: Other income was high at ₹16 crore this quarter. What contributed to this, and what is your forex hedging strategy?

A: Out of ₹16 crore, ₹13 crore was from forex gains and ₹3 crore was fixed deposit (FDR) interest. Since we do both imports and exports, we enjoy a natural hedge. As per policy, we hedge 50–60% of our net unhedged exposure.

Q: With large CAPEX plans requiring higher working capital, will you need further equity dilution?

A: No, we do not plan any further equity dilution. We recently raised ₹500 crore via QIP, have ~₹150 crore in FDRs, and have sanctioned working capital limits from lead bankers (like SBI) to fund our requirements.

Q: What is your long-term outlook on gross margins and operational performance?

A: Our gross margins historically stay in the 45% to 50% range. While quarterly margins might show minor fluctuations based on product mix, we expect our sustainable margin trajectory to remain intact, supported by capacity expansion and a higher proportion of value-added products.

Strategic Outlook

1. The company plans to increase utilisation of its expanded 52,000 TPA capacity to 85–90%, while focusing on operational efficiency across the integrated value chain and leveraging higher manufacturing capacity for future growth.
2. Backward integration remains a key priority, with the planned Shea processing facility in Burkina Faso expected to strengthen supply security, reduce seed freight costs and optimise the utilisation of Indian extraction assets.
3. Manorama plans to scale refining capacity by adding 300 TPD of refining capability, including a planned 90,000 TPA refinery, supporting greater forward integration and expanding its ability to serve value-added applications.
4. The company intends to deepen its global presence by scaling international subsidiaries, developing strategic partnerships and expanding customer access across newer markets, particularly in MENA, Latin America and other high-growth regions.
5. The incorporation of a wholly owned subsidiary in Chad and acquisition of around 10 hectares in Burkina Faso for a Shea processing facility are expected to further strengthen sourcing security, traceability and long-term competitiveness.
6. Management remains confident about long-term growth, supported by an expanding product portfolio, stronger customer partnerships, increasing contribution from cocoa butter alternatives and continued investments across the value chain.

Business Strategy

1. The company follows an integrated “waste-to-wealth” model, sourcing exotic tree-borne seeds from India and Africa, processing them through its integrated facilities and converting them into CBE, specialty fats and butters for food, confectionery and personal care applications.
2. Manorama is focused on strengthening its sourcing ecosystem through village-level aggregation and tribal-community networks in India, while expanding direct access to Shea seed origins in West Africa through its international subsidiaries.
3. The company plans to invest ₹460 cr over the next 2–3 years towards capacity expansion, including fractionation, CBA, ESOS and refining capabilities, with major projects targeted for commissioning by FY28.
4. Product premiumisation remains a key focus, with the company increasing the contribution of CBE, stearin, specialty fats and application-specific value-added formulations to improve product mix and strengthen margins.
5. The company continues to invest in R&D-led product innovation through its DSIR-certified research centre, developing customised solutions and working closely with customers’ R&D teams across food, confectionery, cosmetics and personal care.
6. Manorama is expanding its global footprint through international subsidiaries and strategic partnerships, including its Brazil partnership with Dekel for CBE and specialty fats production and growing customer access across MENA and Latin America.

Key Highlights

1. Consolidated revenue grew 39.53% YoY to ₹404.01 crs in Q1 FY27, crossing the ₹400 cr quarterly revenue milestone for the first time, supported by stronger value-added product mix and higher utilisation of fractionation capacity.
2. EBITDA increased 42.17% YoY to ₹106.21 crs, with EBITDA margin improving by 49 bps to 26.29%, driven by effective cost control and improved operating leverage.
3. PAT surged 66.70% YoY to ₹78.21 crs, while PAT margin expanded to 19.36% from 16.20% in Q1 FY26. Diluted EPS increased 67.77% YoY to ₹13.17.
4. The company maintained a 60:40 export-to-domestic revenue mix in Q1 FY27 and has expanded its geographical presence to 39+ countries through 10 international subsidiaries.
5. Fractionation capacity increased to 47,500 TPA, supported by capacity additions and debottlenecking, while the company continues to strengthen its integrated manufacturing ecosystem across seed milling, extraction, refining and fractionation.
6. Manorama completed a ₹500 cr QIP in July 2026 at ₹1,470 per share, strengthening its balance sheet ahead of the FY28 capex cycle and providing financial flexibility for manufacturing, sourcing and value-added product expansion.

Performance

Q1 FY27:

1. Revenue from operations: ₹404.01 crs (↑39.53% YoY)
2. EBITDA: ₹106.21 crs | EBITDA Margin: 26.29% (↑49 Bps)
3. PAT: ₹78.21 crs | PAT Margin: 19.36% (↑316 Bps)

FY26:

1. Revenue from operations: ₹1,366.74 crs
2. EBITDA: ₹361.33 crs | EBITDA Margin: 26.44%
3. PAT: ₹223.14 crs | PAT Margin: 16.33%