Sayaji Industries Reports Turnaround Profit of Rs 3.1 Crore in Q2

Revenue stood at Rs 264 crore, up 6% YoY; EBITDA hit Rs 16 crore.

Reader Takeaway: Profit recovery signals operational improvement, though margin volatility and project delays remain key areas of concern.

What just happened

Sayaji Industries reported a consolidated profit after tax (PAT) of Rs 3.1 crore for Q2 FY27, a significant recovery from the Rs 9.2 crore loss recorded in the same quarter last year. Revenue for the period came in at Rs 264 crore, marking a 6% increase on a year-on-year basis, despite a 9% sequential decline from the previous quarter. EBITDA was reported at Rs 16 crore, a major improvement from year-ago levels, though margins saw a sequential dip to 6.2% from 7.3%.

Why this matters

The company is executing a strategic pivot by divesting a non-core land parcel in Kathwada for Rs 73 crore to fund working capital and operations. Having already received an initial Rs 20 crore, the management plans to use the proceeds to support core business activities. This liquidity injection is critical as the company manages ongoing input cost inflation and capital expenditure for its modernization projects.

Project Status

The company is facing minor headwinds in its capital projects. Its Technology Modernisation and Automation project is running one quarter behind schedule, with completion now expected by the end of Q3 FY27. Additionally, the Alland & Sayaji and Nigay & Sayaji joint venture projects are delayed, with work now expected to commence in Q4 FY27 due to pending regulatory permissions.

Risks to watch

Investors should monitor the company's ability to pass on elevated input costs, which impacted margins this quarter. The reliance on the remaining balance of the land divestment over the next 12 months is also a key factor for future cash flow stability. Additionally, further delays in the modernization and JV projects could impact the timeline for anticipated operational efficiencies.

Management Commentary

Management noted that the maize starch industry has begun passing on inflationary costs and expects price pressures to ease with the arrival of the winter crop post-Diwali. Despite logistical challenges in exports, demand remains firm, and the company confirmed no significant impact from the geopolitical situation in West Asia.