Nava Limited Q3 FY26 Earnings Call Summary

Summary

Nava Limited - Q3 FY26 Earnings Call Summary Thursday, February 05, 2026 4:00 PM IST

Event Participants

Executives Ashwin Devineni (Managing Director & CEO), B. Srinivasa Rao (Financial Controller), GRK Prasad (Executive Director), Nikhil Devineni (Executive Director), P. Karthik (AGM - Projects & Finance), VSN Raju (Company Secretary & VP)

Analysts Jainam (ICICI Securities), Jatin Damania (SVAN Investments), Kaushik Doshi (ICICI Securities), Nidhi Shah (ICICI Securities), Sailesh Raja (B&K Securities), Shree Gopal Kankani (S.G. Kankani & Associates), Stuti Agarwal (CIL), Vaishnavi Gurung (Craving Alpha Wealth Fund)

Financials & KPIs

Geographic & Segment Commentary

• Energy (Zambia): The Maamba Energy (MEL) plant achieved a 97% PLF, contributing significantly to consolidated profitability. Phase 2 expansion (300MW) and a new 100MW solar project are underway to diversify the energy mix away from hydropower in Zambia.
• Energy (India): Domestic power exchange pricing dropped ~12% YoY, leading the company to shift toward long-term bilateral contracts. The 60MW Odisha IPP plant has secured a 5-year contract with Tamil Nadu at ₹5.2 per kWh.
• Mining: The segment maintains a steady sales volume of 35,000-42,000 tons per month. Management views this as a resilient, high-visibility vertical with sustainable margins.
• Ferro Alloys: Pricing improved by 8% in Q4 compared to Q3 FY26 due to government infrastructure spending. While margins remain thin (near breakeven in Q3), management expects stable top-line performance through FY27.
• Agribusiness: Early success achieved in Avocado plantations with a pilot crop of 140 metric tons. The Kawambwa Sugar project is in execution with a focus on long-term revenue diversification.

Company-Specific & Strategic Commentary

• Capital Allocation: Completed a $50 million buyback at Nava Global, funded by dividends from Maamba Energy, to enhance shareholder value.
• Asset Diversification: Investing in non-power verticals including Avocado plantations ($55M commitment) and a Sugar complex ($100M commitment) to build long-term resilience.
• Resource Security: Manganese ore for ferroalloy production is largely sourced from international markets, minimizing exposure to domestic price hikes by MOIL.
• Exploration: Ongoing mineral exploration in Ivory Coast (360 sq. km concession) and lithium exploration in Africa; both remain in early stages with no material discoveries reported yet.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Domestic Power & PPAs

• Question: How does the company view domestic power growth given declining exchange prices? (Jatin Damania)
• Answer: Prices dropped 12% YoY; the company is moving toward bilateral contracts. The 60MW IPP in Odisha is tied up for 5 years with Tamil Nadu at ₹5.2/kWh. Q4 FY26 is fully committed (Ashwin Devineni).

Zambia Expansion Capex

• Question: What is the capex outlay for the 300MW thermal and 100MW solar plants? (Jatin Damania)
• Answer: Thermal Phase 2 is $400M and Solar is $90M. As of Dec 31, $190M was spent on thermal and $10M on solar. Funding is a 70:30 debt-equity ratio, with Nava contributing 65% of equity and ZCCM-IH 35% (P. Karthik/Ashwin Devineni).

Agribusiness Scalability

• Question: What is the scale and timeline for the avocado segment? (Vaishnavi Gurung)
• Answer: 1,100 hectares total (4 divisions). Two divisions are planted; a 140MT pilot crop was harvested. It will take 8 years for full production and 4-5 years to become a significant segment (Ashwin Devineni/P. Karthik).

Ferro Alloys Margin Pressure

• Question: Why did ferroalloy profitability drop despite a price increase? (Jatin Damania)
• Answer: The 8% price increase refers to the current Q4 vs. Q3. The segment is currently near breakeven but scale remains high (Nikhil Devineni).

Key Takeaway

Nava Limited delivered a strong Q3 FY26, characterized by an 83.5% QoQ jump in consolidated net profit and EBITDA margins expanding to 48.3%. This performance was underpinned by the Maamba Energy (MEL) plant in Zambia operating at a 97% PLF and the successful reduction of arrears to $30.5 million. Strategically, the company is pivoting toward a diversified energy and agri-business model, committing $400 million to Phase 2 Thermal (300MW) and $90 million to Solar (100MW) in Zambia, alongside a $100 million sugar project. While the domestic Indian power market faces pricing headwinds (down 12% YoY), Nava has mitigated risks by securing long-term PPAs at ₹5.2/kWh. Looking forward, the H1 FY27 commissioning of solar and H2 FY27 commissioning of thermal expansion are expected to add ~$200 million in annual revenue. Investors should monitor the progress of the $55 million avocado plantation and the high-capex sugar complex, which are critical to the company’s 2028 resilience strategy.