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Volume growth weak; all-time high margins drive earnings beat

* Revenues grew 5% YoY to ~INR8.1b (-2% QoQ), in line with our estimate. Volumes declined 11% YoY to 1m tons, while realization grew by a whopping 18% YoY to INR7,944/ton, driven by a price hike implemented post-1QFY25. The company also discontinued certain low-margin agreements in 4QFY25, which impacted volume growth but also supported margins.

* EBITDA margins stood at 23.1%, against our estimate of 18.3%. The margins were supported by a price hike implemented during the end of 1QFY25. Additionally, fuel costs as a % of revenues declined, supported by an increase in procurement from refineries (from 32% in 4QFY24 to 42% in 4QFY25). Lorry hire charges as a % of revenues declined, driven by an improvement in kms run by VRL-owned vehicles.

* EBIDTA grew 77% YoY to INR 1.9b in 4QFY25 (23% above our estimate).

* Strong operating performance drove APAT up to INR743m in 4QFY25 vs INR215m in 4QFY24 (our estimate was INR527m).

* Capex incurred in 4QFY25 stood at INR480m. Net debt stood at ~INR4b in Mar’25 vs INR4.7b by the end of Dec’24.

* The Board recommended a final dividend of INR10 per equity share for FY25.

* During FY25, revenue was INR31.6b (+9% YoY), while EBITDA stood at INR5.7b (+46% YoY, EBITDA margin was 18.1%, and APAT stood at INR 1.8b (+106% YoY).

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