CMP: INR 1,071 Rating: BUY Target Price: INR 1,639

India Glycols Ltd reported numbers, Q1FY27 revenue stood at INR 1,130cr (+8.6% YoY/+15.8% QoQ); below our estimates of INR 1,180r, supported by recovery in chemical and ennature biopharma business. Gross Profit stood at INR 433cr (+19.3% YoY/+17.2% QoQ); above our estimates of INR 413cr. Gross margins improved by 342 bps YoY (+47 bps QoQ) to 38.3% in Q1FY27, due to better product mix and pricing. EBITDA stood at INR 170cr (+13.3% YoY/+1.8% QoQ); in line with our estimates of INR 173cr. EBITDA margin improved by 62 bps YoY (-205 bps QoQ) to 15% in Q1FY27, due to premiumization and cost optimization. PAT stood at INR 97cr (+32.2% YoY/+11.5% QoQ); in-line with our estimates of INR 99cr. PAT margin improved by 153 bps YoY (-33 bps QoQ) to 8.6% in Q1FY27.

Key Highlights

Value unlocking via strategic demerger: The NCLT-approved trifurcation into India Glycols Ltd (specialty chemicals), IGL Spirits Ltd (spirits + biofuels), and Ennature Bio Pharma Ltd (nutraceuticals/APIs) is a major catalyst. This restructuring eliminates the conglomerate discount by creating three pure-play entities, each with distinct operational dynamics, enabling sharper management focus. Post demerger, each business can pursue its own growth trajectory and unlocking significant shareholder value.

Growth & Margin expansion across diversified businesses: IGL Spirits Ltd is dominant market leader in UP/Uttarakhand with captive ENA production ensuring cost leadership. IMFL revenue grew 26% YoY to 1.4mn cases, with Prestige & Above nearly doubling. Premiumization focus includes new launches in deluxe whisky, semi-premium vodka, and white spirits, with revenue growth expected to outpace volume growth. The Amrut partnership and exclusive Bacardi maturation facilities strengthen the premium portfolio. The management aspired EBITDA of INR 500cr+ in FY27E and INR 1000cr+ over 4-5 years. India Glycols Ltd (Chemicals) is the world’s largest supplier of bio-based specialty chemicals and pioneer in bio based amines and carbon-smart glycols. It has strong partnerships with Dove, L’Oréal, Unilever. The management aspired INR 2,500cr revenue and INR 400cr+ EBITDA in 4-5 years. In Ennature Bio Pharma Ltd, Nicotine business grew 2x QoQ with new capacity at Kashipur. The management is targeting IN 130-150cr EBITDA in 4-5 years.

Financial discipline and clear path to debt-free: Finance costs reduced to INR 25cr (-43.6% YoY) in Q1FY27, due to active debt reduction. The has a clear target to become debt-free from FY28 onwards, which will further boost bottom-line. Capex is expected to be minimal at INR 5-20cr for FY27E, with no large-scale capex planned for at least two years, as the company focuses on modular expansions using existing assets.

Outlook & Valuation: India Glycols is in a transformative and value-accretive phase, driven by an NCLT-approved demerger into three focused pure-play entities, which is expected to unlock shareholder value. The spirits business, with dominant market share in UP/Uttarakhand and captive ENA cost leadership, is aggressively expanding its premium IMFL portfolio (26% YoY growth) through partnerships with Amrut and Bacardi. The spirits business is targeting INR 500cr+ EBITDA for FY27E and a top-alco-bev position. The chemicals business, as the world’s largest bio-based specialty chemicals player, is capitalizing on the global sustainability shift with innovations like bio-based amines, targeting INR 2,500cr in revenue and INR 400cr in EBITDA over 4-5 years. Ennature Bio Pharma, with its best-ever quarter and nicotine growth (2x QoQ), targets INR 130-150cr in EBITDA in 4-5 years. We estimate revenue/EBITDA/PAT CAGR of 12%/15.4%/29% over the period of FY26-29E, with EBITDA margin expanding to 16.9% (FY29E). At the CMP of INR 1,071 per share, we maintain our “BUY” rating at a TP of INR 1,639 per share, based on SOTP; an upside of 53%. SOTP; an upside of 53%.