Dalmia Bharat Sugar & Industries Ltd Management Discussions

Even as geopolitical tensions and energy disruptions weakened global growth expectations to 2.9% in 2026, we remained supported by Indias more resilient domestic growth architecture relative to many peers.

Global Operating Environment

The global economy entered 2026 on a relatively stable footing, but the external environment has become materially more uncertain as the conflict in the Middle East has intensified. According to the IMFs January 2026 World Economic Outlook Update, global growth was estimated at 3.3% in 2025 and projected at 3.3% in 2026, before moderating marginally to 3.2% in 2027. However, according to the OECDs March 2026 Interim Economic Outlook, the recent escalation in the Middle East has introduced a meaningful downside risk to this baseline, with global GDP growth now projected at 2.9% in 2026 and 3.0% in 2027, assuming the present energy disruption proves temporary. (IMF)

According to the OECD, the global macroeconomic setting is now characterised by a more fragile balance between residual growth momentum and renewed cost-side pressures arising from energy, freight and input-market volatility. Advanced economies continue to face subdued industrial activity, softer consumer demand and heightened policy uncertainty. At the same time, emerging markets are expected to remain relatively stronger, albeit with greater dispersion in outcomes across countries. (OECD)

India remains comparatively well placed within this environment. According to the IMFs January 2026 update, India is projected to remain among the fastest-growing major economies, with real GDP growth of 6.4% in 2026. At the same time, according to the Department of Economic Affairs Monthly Economic Review for March 2026, domestic financial conditions have remained supportive, with bank credit growth at 14.5% year-on-year in February 2026 and overall flow of financial resources to the commercial sector rising 33.2% year-on-year. This indicates that, while India is not immune to global shocks, its domestic growth architecture remains more resilient than that of many peers. (IMF)

Inflation and Interest Rate Trajectory

The inflation outlook has become more complex than earlier anticipated. According to the IMF, global disinflation had been expected to continue through 2026. However, according to the Department of Economic Affairs, current inflation readings in India do not yet fully reflect the potential impact of rising crude oil prices, which now pose an explicit upside risk. In parallel, according to the OECD, the current energy shock and the uncertain trajectory of the Middle East conflict have increased the possibility of renewed inflation persistence across major economies. (IMF)

Accordingly, the expected path of monetary easing may become more measured and uneven across jurisdictions. Central banks in major economies are likely to remain data-dependent, particularly where energy-price pass-through could interrupt the disinflation process. For India, the policy challenge is not one of underlying domestic weakness, but of managing imported cost pressures without derailing growth momentum. (OECD)

Crude Oil, Energy Security and Biofuel Relevance

The earlier expectation of softer energy prices now warrants qualification. According to the World Banks October 2025 Commodity Markets Outlook, oil markets had been expected to ease in 2026, with Brent crude assumptions materially below current spot levels. Since then, however, the war-led disruption has substantially altered market conditions. According to Reuters on 31 March 2026, Brent crude was on course for a record monthly gain of 56% in March 2026, driven by fears of prolonged conflict, supply disruption and persistent inflationary spillovers. (The World Bank Documents)

The scale of the supply risk remains significant. According to Reuters, citing Barclays on 26 March 2026, a prolonged disruption to the Strait of Hormuz could imply a potential oil supply loss of 13-14 million barrels per day, underlining the magnitude of the shock should the conflict widen further or persist for longer than currently assumed. This has important implications not only for crude prices, but also for shipping, petrochemicals, fertilisers and broader input costs across multiple sectors. (Reuters)

For India, this reinforces the strategic importance of reducing vulnerability to volatility in imported energy. According to the Department of Economic Affairs, crude-led inflation now represents a clear upside risk. In such an environment, ethanol and other domestic biofuel pathways gain relevance not merely on account of conventional blending economics, but because they support energy security, import substitution and policy-led decarbonisation. This is particularly relevant during periods when geopolitical developments distort fossil fuel prices and expose the strategic costs of import dependence. (Department of Economic Affairs)

Implications for Ethanol Economics

The economics of ethanol must therefore be interpreted through a broader strategic lens. In a benign oil-price environment, ethanol competitiveness can appear more intricately linked to relative fuel pricing and near-term blending spreads. In the current environment, however, the case for biofuels is being reinforced by policy priorities that extend beyond simple price arbitrage. According to current government and multilateral assessments, the external shock has elevated the importance of energy resilience, feedstock e_iciency and domestic supply diversification. This strengthens the long-term structural rationale for integrated and compliant producers operating within Indias blending ecosystem. (Department of Economic Affairs)

For DBSIL, the present environment is therefore better understood not as a cyclical distortion alone, but as a reminder of the strategic relevance of integrated sugar and ethanol capacity in a volatile world. Companies with disciplined operations, dependable feedstock linkages, and the ability to align with national blending priorities are likely to remain better positioned as energy security, inflation management, and sustainability objectives converge more tightly within policy and capital allocation frameworks. (Department of Economic Affairs)

Domestic Operating Environment

In FY2026, the Indian economy remained among the fastest-growing major economies despite a more uncertain external backdrop marked by geopolitical conflict, elevated energy risk, trade fragmentation and commodity-price volatility. According to the National Statistical O_ices Second Advance Estimates, Indias real GDP growth for FY2025 is estimated at 6.5%. At the same time, according to the IMFs January 2026 World Economic Outlook Update, India is projected to grow by 6.3% in 2026 and 6.5% in 2027 on a calendar-year basis, underscoring continued medium-term resilience relative to most major economies. According to the Department of Economic Affairs March 2026 Monthly Economic Review, domestic financial conditions remained supportive. However, the recent rise in crude oil prices has introduced a fresh source of macroeconomic uncertainty through inflation, freight and input-cost channels.

According to the Reserve Bank of India, the Monetary Policy Committee maintained the policy repo rate at 5.25% in February 2026, reflecting a calibrated approach that balances growth support with inflation vigilance. Headline inflation remained relatively contained but imported inflation risks have increased meaningfully following the escalation in the Middle East and the associated volatility in crude prices. At the same time, the domestic growth outlook continued to be supported by resilient demand, services activity, public capital expenditure and relatively healthy credit conditions. According to the Department of Economic Affairs March 2026 Monthly Economic Review, bank credit growth stood at 14.5% year-on-year in February 2026, while the flow of financial resources to the commercial sector rose 33.2% year-on-year, indicating that the domestic economy entered FY2027 with a still-supportive financing environment.

The agricultural outlook remains broadly stable at this stage, though it is subject to the usual uncertainties in the timing and distribution of the southwest monsoon. As of 31 March 2026, the India Meteorological Department had not yet issued its first- stage long-range forecast for the 2026 southwest monsoon. According to the IMD, the southwest monsoon normally sets in over Kerala around 1 June and covers the entire country by around 15 July. In the interim, the latest official weather guidance suggests a mixed but manageable pre-monsoon setting. According to the IMDs February 2026 seasonal outlook, normal to above-normal rainfall was expected over many parts of the country during March 2026, except in parts of northeast India and some areas of northwest and east-central India, where below-normal rainfall was indicated. The same outlook also pointed to an above-normal number of heatwave days during March to May 2026 across several parts of east, east-central and peninsular India. Accordingly, while the kharif outlook will depend more decisively on the eventual monsoon distribution, the pre-monsoon period may see localised stress on soil moisture, water availability and crop-preparation conditions in heat-exposed regions.

For India, the principal macroeconomic risks in the current environment arise from imported energy inflation, external-sector pressures and global policy uncertainty rather than from any fundamental weakening of domestic demand. According to the Department of Economic Affairs Monthly Economic Review for March 2026, prevailing inflation numbers do not yet fully capture the impact of rising crude oil prices, which now pose a clear upside risk to the inflation trajectory. A sustained increase in oil prices could widen the import bill, place pressure on the current account and the rupee, and be transmitted into freight, fertilizer, and other input costs across the economy. In parallel, according to the Department of Economic Affairs

February 2026 Monthly Economic Review, trade policy uncertainty remains a defining feature of the external environment, with the global trade policy uncertainty index rising 33.2% month-on-month in January 2026, potentially discouraging investment and complicating business planning. At the same time, according to the IMFs 2025 Article IV Consultation for India, although

Revenue and Profitability

During FY2026, Dalmia Bharat Sugar and Industries Limited (DBSIL) recorded revenue from operations of 3618 crore, representing a 3% decline year-on-year over 3,725 crore reported in FY2025. While revenue from operations saw a marginal decline, the Company demonstrated Strategic Resilience in a highly regulated landscape. This stability was powered by a 4.3% year-on-year increase in Net Sugar Realisation (NSR) to 39.7/ kg, which helped offset lower crushing volumes caused by erratic agro-climatic conditions. Our ability to sustain revenue levels in a challenging environment is the direct outcome of our transition to a lean ‘pure-play leader with absolute segmental clarity.

EBITDA stood at 520 crore, with margins at 14.35% due to external cost-side pressures beyond Managements immediate control. This includes higher sugarcane costs. To mitigate these impacts, we deployed ‘Diagnostic Mastership, leveraging AI-driven forecasting to suppress error margins and optimize our product mix, ensuring that our core operational engine remains robust for FY2027.

Indias external position remains supported by resilient services exports, adequate capital bu_ers and continued fiscal consolidation, risks to the outlook remain tilted to the downside from escalating trade measures, prolonged external uncertainty and adverse commodity- price movements. These factors warrant continued vigilance even as India remains relatively better positioned than many major economies.

Balance Sheet Highlights

Net worth as of 31 March 2026 stood at 3,244 crore (31_March 2025: 3,063 crore), supported by retained earnings from operations. Equity share capital remained unchanged at 16.19 crore, reflecting a stable capital structure with growth funded through internal accruals. Long-term borrowings stood at 459 crore (31 March 2025: 513 crore), with a long-term debt-to-equity ratio of 0.16 as of 31 March 2026, reflecting a conservative leverage profile. Gross fixed assets increased from 3,089 crore in FY2025 to 3,321 crore in FY2026, reflecting capital deployment toward integrated manufacturing infrastructure. The current ratio stood at 1.58 times (FY2025: 2.58x), indicating a comfortable liquidity position.

Application of Funds

Gross fixed assets rose from 3,089 crore in FY25 to 3,326 crore in FY26. The asset base continues to reflect investments made toward capacity augmentation and operational e_iciency initiatives, including the commissioning of the Gangapur (Baghauli) grain- based distillery.

Non-current investments amounted to 1246 crore as of 31 March 2026, compared with 583 crore recorded as of 31 March 2025, representing a 654 crore increase the during the year. This is primarily driven by a tactical arbitrage strategy to manage surplus liquidity. In FY2026, the Company managed its seasonal working capital requirements by leveraging comparatively cheaper working capital limits and invested its own surplus funds in High-yield instruments. This approach to the management of Financial Capital ensures that even during seasonal cycles, our balance sheet is actively engineering a net benefit for the bottom line.

Working Capital Management

Total current assets stood at 2,405 crore as of 31 March 2026, compared with 2,159 crore as of 31 March 2025, reflecting a 11% year-on-year increase. Net cash from operating activities was subject to cyclical compression, falling to 210 crore. This was the result of a double impact in the working capital cycle: inventory valuations rose due to higher cane SAP, while trade payables decreased as a shorter crushing season led to the accelerated settlement of nearly all cane dues by March 31, 2026. The management views this as a temporary suppression of cash conversion, reflecting the Companys commitment to maintaining a debt-free status with its partner cultivators..

The current ratio stood at 1.58 times during FY2026, compared with 2.58 times reported as of 31 March 2025, indicating a comfortable liquidity position. Change in current ratio is mainly due to deployment of own funds in relatively high-yielding instruments.

Inventories comprising raw materials, work-in-progress and finished goods stood at 1693 crore as of 31 March 2026, compared with 1,647 crore reported as of 31 March 2025, reflecting a 3% change during the year. Sugar stock positions and seasonal crushing cycles within the industry primarily influence inventory levels.

Cash and Bank Balances

Cash and cash equivalents amounted to 318 crore as of 31 March 2026, compared with 287 crore as of 31 March 2025, representing a 11% year-on-year increase.

The Company continues to maintain adequate liquidity to support operational requirements, capital expenditure commitments and financial obligations.

Key Financial Ratios

Ratio	Formula	FY2026	FY2025	Change (%)	Comments
a Current Ratio	Current Assets / Current Liabilities	1.58	2.58	-39%	Current Ratio has decreased due to increase in working capital limit utilization (as own funds were deployed in high yield instruments.)
b Debt- Equity Ratio	Debt / Equity	0.16	0.19	-16%	-
c Debt Service Coverage Ratio	(PBT + Dep +Interest) / (Int+ Repay	4.07	4.57	-11%	-
d Return on Equity Ratio	PAT/ Avg Shareholder Equity	0.08	0.13	-38%	Decrease due to non-availability of one-time
e Net Profit Ratio	Net profit / Total Revenue	0.07	0.10	-30%	tax benefit received in the previous year.
f Return on Investment	Net Profit / Total Assets ? 100	4.36	7.98	-45%
g Inventory Turnover	Revenue / Avg Inventory	2.17	2.19	-1%	-
h Trade Receivable Turnover	Total Sales / Avg Receivables	24.01	33.60	-29%	Change in ratio is due to increase in average Trade Receivables.
i Trade Payable Turnover	Net Credit Purchases / Avg Payables	15.62	9.43	66%	Change in ratio is due to decrease in Trade Payables driven be early closure of sugar season.
j Net Capital Turnover	Net Annual Sales / Shareholders Equity	1.15	1.27	-9%	-
k Return on Capital Employed	EBIT /Capital Employed	0.10	0.11	-12%	-

Outlook: Mastering Scale and Engineering Long-Term Value

Mastering Scale and Engineering Long-Term Value As we look toward FY2027 and beyond, DBSIL is transitioning from a period of intense capacity building to a phase of "Operational Mastery." Our forward strategy is anchored in the theme "Mastering Challenges, Creating Value," focusing on asset optimisation, geographic diversification, and tech-led e_iciency to strengthen long-term capital productivity and value creation. While global economic uncertainties and trade logistics volatility persist, our integrated business model - now a leaner "pure-play" agro-energy enterprise following the demerger of non-core refractory and travel units - provides a resilient platform to navigate these complexities with segmental clarity.

Geographic De-risking and Global Aspirations

A critical pillar of our future growth is the strategic mitigator for domestic market saturation: our entry into Tanzania. Marking FY2026 as "Year Zero" for international manufactured capital, we are exporting the "Dalmia Way" of operational excellence to a high-potential, sugar-deficient market. By acquiring a 51% stake in Eagle Agrotech Holdings Limited, we have secured a 20,000-hectare footprint that allows us to build a sustainable raw material base before initiating factory construction, providing a geographic natural hedge against the structural limits of the Indian domestic market.

Operational Agility and Feedstock Mastery

Domestically, we remain focused on Mastering Policy Volatility through unparalleled feedstock agility. With our total distillery capacity reaching 950 KLPD, we have established a robust "Natural Hedge" by scaling our grain-based ethanol capacity to 350 KLPD. This flexibility allows us to optimise distillery throughput regardless of government-imposed restrictions on cane juice diversion, ensuring we remain a leader in the National Biofuel Policy ecosystem. For FY2027, our focus shifts to asset sweating, targeting sugar capacity utilisation of >93% and distillery utilisation of >85% to maximise capital velocity.

The Digital Leap:

From "Metal to Mind", our forward roadmap is defined by a transition from foundational digital retrofitting to cognitive operations. We have doubled our investment in AI and emerging technologies to institutionalise "Metal to Mind" decision-making. By introducing AI-enabled optimisation engines for fermentation control and shift scheduling, alongside satellite geo-sensing for precision agriculture across our 200,000-farmer command area, we are decoupling growth from resource intensity.

Circular Infrastructure and Regenerative Commitment

Sustainability remains the lens through which we de-risk our future. Our forward pipeline includes high-impact "Waste-to-Wealth" projects:

Kolhapur CBG Project: A flagship 13 TPD Compressed Bio-Gas plant to convert distillery spent wash into green fuel.

Jawaharpur Steam Savings: A 49 Crore initiative targeted for November 2026 completion, expected to reduce steam consumption by 10% and save 54,000 MT of bagasse annually.

Regenerative Agriculture: Scaling our soil health programs to reach a soil organic carbon target of 0.5%–0.75% and achieving our 10x water positivity goal by 2030.

Through these disciplined interventions, DBSIL is not just navigating the next cycle but is actively engineering its operating system to extract maximum value. We remain committed to delivering superior shareholder returns while contributing to Indias broader objectives of energy transition, rural prosperity, and food security.

Case Study:

Eagle Agrotech Tanzania – De-risking Growth Through Global Optionality

While DBSIL has historically anchored its growth in the high-yield clusters of Uttar Pradesh and Maharashtra, FY2026 marks ‘Year Zero for our international manufactured capital in Tanzania. The project is currently in the estate development phase, focusing on bush clearing, nursery construction, and due diligence for factory infrastructure. This phased, low-capital-intensity early stages allow us to build a sustainable raw material base in a high-growth, sugar-deficit geography, ensuring our long-term growth trajectory is decoupled from domestic agro-climatic limitations..

This Abu Dhabi-based holding entity, which controls a sugarcane plantation and factory project in Tanzania, represents a strategic move from a surplus market to a high-growth, sugar-deficient geography.

This venture is operationalized through a philosophy of "High Strategic Optionality with Low Capital Intensity." This acquisition grants the Company a majority-controlled entry into a market where domestic realization rates are consistently higher than world market prices. Furthermore, the partnership with the Alabbar family office (the principals behind the Emaar Group) provides DBSIL with significant institutional credibility and local navigational expertise, effectively de-risking the regulatory and geopolitical complexities of a first-time international foray.

Strategically, Eagle Agrotech is framed as a forward-looking initiative rather than a near-term revenue contributor. We have adopted a disciplined, phased investment approach:

The Backward-Integration Phase: Currently in "Year Zero," our primary focus is on stabilizing agricultural assets on 20,000 hectares of virgin land located 150 kilometers from the commercial capital, Dar es Salaam.

Asset-Light Timing: By prioritizing the establishment of a robust crop cycle before initiating factory construction - targeted for completion in approximately three years - we are ensuring that industrial capital is not deployed ahead of raw material readiness.

Geographic Natural Hedge: This expansion serves as a critical strategic hedge, providing a growth trajectory that is decoupled from the specific agro-climatic and policy constraints of the Indian domestic market.

Through this low-capital entry into East Africa, DBSIL is not merely building a factory; it is establishing a scalable "Standardized Template" for global growth, ensuring that long-term value creation is supported by a diverse, multi-geography asset base.

Business Overview

An Integrated Agro-to-Energy Enterprise

Dalmia Bharat Sugar and Industries Limited is one of Indias most structurally integrated agro-to-energy enterprises, operating across the sugar, ethanol, and renewable power value chains. Our business model is anchored in the e_icient conversion of agricultural feedstock into a range of value-added outputs, enabling resilience across commodity cycles and policy regimes.

Established in the mid-1990s, the Company has expanded its footprint across Uttar Pradesh and Maharashtra, with a cane crushing capacity of approximately 43,200 TCD, a distillery capacity of 950 KLPD and a cogeneration capacity of 138 MW. Every component of sugarcane - juice, molasses, bagasse and by-products - is channelled into revenue-generating streams.

Strategic Evolution

Over the years, Dalmia Bharat Sugar and Industries Ltd. (DBSIL) has progressively evolved from a conventional sugar manufacturing enterprise into a more integrated agro-to-energy enterprise with diversified revenue streams across sugar, ethanol and renewable power. This transition reflects the Companys focus on strengthening operational integration, improving the realisation of value from sugarcane, and aligning its growth strategy with Indias evolving biofuel and renewable energy policies.

DBSIL has evolved its strategic framework for FY2026 to transition from foundational growth to "Mastering Challenges and Creating Value." The seven strategic pillars adopted during FY2025 remain the core architecture of our progress, now adapted to reflect our maturation as a tech-led agro-energy giant with an emerging international footprint.

Strategic Pillar

01 Financial Prudence and Value

Our financial objective is to strengthen capital discipline, earnings quality and long-term value creation. This value-creation narrative is supported by the demerger of non-core refractory (DMC) and travel (GT) units, which has transformed DBSIL into a leaner, "pure-play" entity, enhancing valuation clarity for investors. By maintaining a "net zero" debt posture through surplus liquidity and leveraging government interest subvention schemes (e_ective cost ~6%), we ensure that our capital deployment remains focused on high-IRR projects that deliver double-digit growth in earnings per share.

02 Digital Transformation

We have reached a critical inflexion point in our digital roadmap, moving from hardware installation to the "Diagnostic Mastership" state. A key priority is leveraging technology and process optimisation by gradually expanding the use of digital tools across the value chain, including improved monitoring of cane procurement, enhanced plant-level operational e_iciency, and better inventory visibility to support informed decision-making. We have doubled our investment in AI and emerging technologies for FY2026 to automate Standard Operating Procedures (SOPs), reducing manual error and unplanned downtime as we move toward closed- loop autonomous operations.

03 Sustainable Operations

Our commitment to environmental stewardship has evolved into a strategic lever for de-risking the supply chain. We are strengthening sustainability initiatives by continuing to improve operational e_iciency through responsible resource management, water conservation, energy optimisation, and the effective utilisation of by-products, such as bagasse, for renewable power generation. Key milestones for FY2026 include:

Decarbonisation: Operationalising a flagship 13 TPD Compressed Biogas (CBG) project at Kolhapur and a 10% steam-saving project at Jawaharpur (saving 54,000 MT of bagasse annually).

04 Operational Excellence

We are now harvesting the full-year impact of our aggregate capacity expansions. A primary focus is expanding ethanol capabilities by strengthening the distillery segment through integrated capacity expansion, including the commissioning of the Gangapur (Baghauli) grain-based distillery in December 2025, while maintaining feedstock flexibility across molasses, sugarcane derivatives, and grain-based inputs in line with regulatory guidelines. This expansion brings our total distillery capacity to 950 KLPD and sugar crushing to 43,200 TCD, with utilisation rates of >82% and >88%, respectively.

05 Human Capital Development

As we transition from "Metal to Mind," our people are being repositioned as Value Architects. In FY2026, we aim to achieve 100% digital literacy among frontline factory staff to enable mastery of cognitive SCADA/DCS systems. Furthermore, with the acquisition of a 51% stake in Eagle Agrotech Holdings Limited, HR is establishing global mobility standards and workforce profiling to manage our first international plantation and factory project in Tanzania.

06 Stakeholder Engagement

We are intensifying our engagement with 200,000+ partner cultivators by turning the field into a data-rich environment. By institutionalising precision agriculture - including satellite geo-sensing and drone surveillance - across our entire command area, we provide real-time feedback to farmers on irrigation needs and cane health. This digital integration reinforces institutional trust and ensures the sustainable supply required to support our expanded industrial throughput.

07 Market and Policy Alignment

Our business model is now engineered to "Master" regulatory volatility through feedstock agility. We are enhancing integrated production flexibility by maintaining the ability to optimise the allocation of sugarcane between sugar production and ethanol manufacturing depending on policy direction, market conditions, and ethanol blending requirements. By scaling grain-based ethanol capacity to 350 KLPD, we have established a "Natural Hedge" that allows us to sustain distillery volumes even during government-imposed restrictions on sugar juice diversion. Internationally, our entry into Tanzania de-risks our growth trajectory from domestic market saturation by providing access to a high-potential, sugar- deficient geography.

Segmental Contribution to Revenue and EBIT

Segment	Revenue Contribution	EBIT Contribution	FY2026 Highlights
Sugar	72%	73%	Core revenue driver; stable domestic demand despite export restrictions
Distillery	28%	25%	Highest margin segment; ethanol blending programme; grain + molasses feedstock
Others	0%	2%	Wind Power, ancillary contributions

Key Data Updates for FY2026:

Gangapur (Baghauli) Distillery: Transitioned from CWIP (Capital Work-in-Progress) to Fully Operational. The 100 KLPD grain-based facility commenced commercial operations on December 27, 2025.

Total Distillery Scale: Aggregate capacity reached 950 KLPD, significantly strengthening the Companys grain-based ethanol production.

Case Study:

The BSDL Amalgamation & Portfolio Rationalisation

"From Acquisition to Integration: The Baghauli Story"

The transformation of our business portfolio in FY2026 is best exemplified by the "Baghauli Story" - a two-act strategic journey that transitioned from a distressed acquisition to a fully integrated, high-yielding operational asset. This narrative serves as a textbook example of capital discipline, illustrating how DBSIL has mastered the complexity of simultaneously scaling core capacities while divesting non-core legacy burdens.

Act One: Speed and Synergy (The Turnaround)

The story began in late 2023 with the acquisition of Baghauli Sugar and Distillery Limited (BSDL) under the Insolvency and Bankruptcy Code (IBC). Demonstrating exceptional execution speed, our engineering teams revived the 3,500 TCD sugar unit and its 12 MW cogeneration plant within just 90 days of acquisition. This turnaround not only restored latent industrial capacity but also immediately unlocked synergies across a 60,000-hectare command area in Uttar Pradesh, strengthening our regional footprint.

Act Two: Converting CWIP into Feedstock Agility

The second phase focused on the 100 KLPD distillery project inherited in an incomplete state (CWIP). Strategically pivoting from the original molasses-based design, we converted this unit into a grain-based facility to align with the national biofuel roadmap and our internal feedstock agility goals. The facility commenced commercial operations on December 27, 2025, successfully transitioning a balance-sheet liability into an active profit engine. This commissioning reinforced our total grain-based ethanol capacity to 350 KLPD, providing a critical "Natural Hedge" against policy-led restrictions on cane juice diversion.

Portfolio Rationalisation: The Pure-Play Transition

While Baghauli was being integrated, Act Two was complemented by the NCLT- sanctioned demerger of our non-core refractory (DMC) and travel (GT) units. With final approval from the National Company Law Tribunal, Chennai Bench,on September 12, 2025, these legacy side-businesses were transferred to Dalmia Bharat Refractories Limited. This simultaneous action - adding 3,500 TCD and 100 KLPD of core capacity while divesting contingent liabilities associated with the demerged units - has transformed DBSIL into a leaner, "pure-play" agro-energy giant.

The BSDL amalgamation, effective April 1, 2024, now concludes as a coherent story of value creation. By focusing exclusively on our core Sugar and Distillery segments, we have established a simplified corporate structure that provides absolute segmental clarity to investors and strengthens capital discipline and investor clarity.

Business Segment Review - 01

Sugar

DBSIL continues to operate as one of Indias most structurally integrated and operationally disciplined sugar manufacturers. During FY2026, the sugar industry navigated a complex environment characterised by moderated cane availability in select regions, policy-led controls on sugar exports and ethanol diversion, and evolving demand-supply dynamics. Despite these headwinds, DBSIL maintained operational stability through disciplined cane planning, calibrated diversion strategies and e_icient plant utilisation.

Global Sugar Industry

The global sugar industry continues to play a critical role in the agricultural and food- processing ecosystem. After achieving the 180-million-tonne threshold in the previous year, global sugar production reached approximately 180.4 million tonnes, according to the International Sugar Organisation (ISO). For 2025–26, the ISO projects global production to increase to around 181.8 million tonnes, shifting the market from a deficit in the prior season to a modest surplus of roughly 1.6 million tonnes.

Global consumption remains above 180 million tonnes annually, reaching a record 181.2 million tonnes in 2023–24, driven by population growth, rising incomes in emerging economies, and sustained demand from food-processing industries. Worldwide, the sugar-ethanol linkage is deepening, particularly driven by Brazilian production economics, introducing an additional variable that connects the sugar market with global energy prices.

Indian Sugar Industry

Indias sugar industry is deeply embedded within the countrys vast agricultural ecosystem, supporting rural livelihoods and agro-based industries. India produces around 329.7 million tonnes of food grains annually and is the second-largest global producer of sugarcane. According to ICRA, gross sugar production for SY2026 is projected to rise by around 15% to nearly 34 million tonnes, supported by improved cane planting in Maharashtra and Karnataka and favourable weather.

After accounting for an estimated 4 million tonnes of sugar diversion towards ethanol, net sugar output is expected to remain around 30 million tonnes, broadly balancing domestic consumption of about 28 million tonnes. Closing inventories are projected at around 6.3 million tonnes - approximately 2.5 months of domestic consumption - indicating a comfortable demand-supply situation.

Indias sugar exports have remained relatively modest in the current season, with shipments reaching around 2.01 lakh tonnes through February 2026. Policymakers have increasingly encouraged producers to prioritise ethanol production to manage surplus cane and maintain supply balance while supporting Indias broader clean- energy objectives. The sector is also expanding its role in climate-linked initiatives, with ISMA signing an MoU with the Global Carbon Council (GCC) to strengthen participation in international carbon markets.

SWOT Analysis - Indian Sugar Industry

Strengths	Weaknesses	Opportunities	Threats
Large agricultural base & raw material availability; integrated agro- energy model; strong EBP policy support; large & stable domestic consumption; emerging carbon market participation	High agro-climatic dependence; significant policy dependence (FRP/SAP, export quotas); working- capital intensive operations; regional production concentration	Expansion of ethanol production capacity; diversification into green energy & bioenergy; carbon market participation; production recovery and supply stabilisation	Geopolitical & trade uncertainties affecting exports; domestic supply imbalance risk; global sugar price volatility; policy-driven market adjustments

Operational Performance

During FY2026, DBSIL operated all six sugar mills across Uttar Pradesh and Maharashtra, achieving substantial utilisation despite headwinds from agro-climatic conditions and policy constraints.

SWOT Analysis - Indian Sugar Industry

Metric	FY2026	FY2025	Remarks
Cane Crushed (lakh tonnes)	51.03	55.59	Cane crush affected by lower yields due to agro- climatic conditions
Sugar Produced (lakh tonnes)	5.4	5.6	Adjusted for ethanol diversion
POL (%)	13.55%	13.76%	Impacted by varietal changes and agro-climatic conditions
Net Recovery Rate (%)	10.56%	10.0%	Impacted by B-heavy and juice diversion decisions

Competitive Strengths

Competitive Strengths
Strategic Scale	Six sugar mills across Uttar Pradesh and Maharashtra have a combined crushing capacity of 43,200 TCD as of 31 March 2026. A diversified footprint reduces concentration risk and provides operational resilience to regional climatic variability.
	The upgradation of the Nigohi unit to 10,500 TCD is fully operational, strengthening throughput capability and enhancing economies of scale.
UP Leadership	One of the leading private-sector sugar manufacturers in Uttar Pradesh, supported by long-standing farmer relationships and structured cane development programmes that enhance cane visibility, varietal improvement and supply stability.
Recovery Performance	Competitive recovery rates supported by improved varietal mix and agronomic interventions. A high proportion of early-maturing cane varieties in Uttar Pradesh supports better recovery, improved throughput and e_icient crushing cycles.
Diversion Flexibility	An integrated structure enables calibrated allocation between sugar and ethanol, optimising revenue realisation within regulatory limits. In FY2026, diversion decisions were aligned with prevailing guidelines and ethanol blending requirements.

Challenges and Mitigation

The sugar business continues to be exposed to structural industry risks, including agro-climatic variability, government-determined cane pricing, export controls and inventory management pressures. In FY2026, moderated cane availability in parts of northern India and regulatory constraints on sugar diversion required tighter operational coordination. DBSIL mitigates these risks through:

Strong farmer engagement and varietal development programmes

High proportion of early-maturing cane varieties to improve recovery.

Integrated flexibility between sugar and ethanol production streams

Prudent inventory and working capital management across the season.

Cost discipline across all six manufacturing operations

Segment Outlook

Sugar Segment Outlook

The sugar segment is expected to remain the cornerstone of DBSILs integrated agro- energy model. India continues to maintain a structurally strong domestic sugar market. Industry estimates indicate gross sugar production could increase significantly in the next sugar season. For integrated players such as DBSIL, the ability to dynamically allocate sugarcane between sugar and ethanol provides greater operational flexibility and margin stability. While influenced by agro-climatic conditions and policy developments, the ongoing integration of sugar operations with downstream ethanol production is expected to reduce cyclicality and support more stable long-term performance.

Business Segment Review - 02

Distillery

The distillery segment continues to represent a strategic growth engine within DBSILs integrated business model, providing structural diversification from the cyclical sugar business. As of 31 March 2026, the segment has transitioned from expansion-led growth to optimisation-led scale, with capacities fully integrated into the Companys operational framework.

FY2026 was characterised by calibrated policy direction around sugar diversion and ethanol blending. With Indias ethanol blending programme achieving approximately 20% blending nationally - five years ahead of the original target - ethanol remains a structurally supported segment under the countrys energy transition roadmap. The distillery business continues to enhance revenue stability, improve working-capital velocity, and support margin resilience across the broader agro-to-energy portfolio.

Indias Ethanol & Biofuel Industry Landscape

Indias energy transition has gathered significant momentum as the country aligns its development pathway with long-term climate commitments and energy security goals. At COP26, India announced its net-zero target for 2070, supported by the five-point Panchamrit strategy, which includes achieving 500 GW of non-fossil fuel energy capacity by 2030 and meeting 50% of energy requirements from renewable sources.

Non-fossil fuel sources now account for approximately 51.93% of Indias total installed power capacity, surpassing fossil-fuel-based capacity for the first time. Within this mix, bioenergy - including bagasse-based cogeneration and ethanol - plays a critical role. Biofuels, particularly ethanol, have emerged as a key pillar of Indias efforts to decarbonise the transport sector.

Under the Governments Ethanol Blended Petrol (EBP) programme, India has achieved a major milestone: 20% ethanol blending in petrol, five years ahead of its original target. Ethanol blending has expanded from around 1.5% in 2014, supported by policy incentives, assured procurement by Oil Marketing Companies (OMCs), and capacity expansions across both sugarcane-based and grain-based_distilleries.

Key Ethanol Blending Benefits

Dimension	Impact
Energy Security	India imports 85% of its crude oil requirements; domestic ethanol reduces import dependence and strengthens energy security.
Environmental	Ethanol blending has reduced carbon emissions by 5.4 million metric tonnes of CO? and lowered vehicular CO and hydrocarbon emissions.
Rural Economy	Government initiatives supporting ethanol production have enabled payments of approximately 87,000 crore to farmers.
Foreign Exchange	Increased ethanol blending has generated forex savings of over 1 lakh crore by reducing crude oil imports.
Production Scale	India is currently the third-largest ethanol producer globally after the United States and Brazil.
Demand Outlook	With petrol consumption of 698 crore litres, ethanol demand is projected to exceed 1,000 crore litres by FY2026 under a 20% blending rate.

Operational Performance

With the removal of ethanol production caps for ESY 2025–26, DBSIL operated with enhanced flexibility during FY2026, optimising its feedstock mix and maintaining healthy utilisation levels across distillery operations.

SWOT Analysis -

Metric	FY2026	FY2025	Remarks
Installed Capacity (KLPD)	950	850 KLPD + 100 CWIP	Gangapur (Baghauli) grain distillery of 100 KLPD was commissioned on December 27, 2025.
Ethanol Production (crore litres)	19.23	18.18	Includes molasses and grain- based output
Average Realisation (/litre)	60.5	62.2	Varies by feedstock; price reset in ESY2025
Feedstock Mix (Molasses: Grain)	65%:35%	64%:36%	Higher grain usage due to expanded grain distillery capacity
Capacity Utilisation (%)	67%	66%
EBIT Contribution (Segmental)	25%	17%	The highest margin segment across the integrated portfolio

 

Competitive Strengths
Feedstock Versatility	Ability to operate across multiple feedstocks - B & C- heavy molasses, direct sugarcane juice (subject to regulatory permissions), and grain. This diversified architecture enhances flexibility in response to policy changes and commodity price movements.
Scaled Capacity Platform	Installed distillery capacity of approximately 850 KLPD, supplemented by the 100 KLPD grain-based unit at Gangapur (Baghauli). This expanded base reduces dependence on a single feedstock stream and strengthens participation in the EBP programme.
Integrated Cost Advantage	Distillery operations benefit from captive utilities, steam from cogeneration, shared infrastructure, and logistical e_iciencies, supporting cost competitiveness and operational discipline as part of fully integrated sugar complexes.
EBP Programme Alignment	Structured ethanol supply to Oil Marketing Companies under assured procurement frameworks, providing pricing visibility and demand assurance that supports earnings stability relative to standalone sugar operations.
Regulatory Agility	During periods of restrictions on sugar-based ethanol production, grain-based capacity is utilised to sustain volumes. This agility has reduced disruption risk and reinforced segment resilience under varying policy conditions.

Challenges and Mitigation

The distillery segment remains influenced by government pricing policies, OMC procurement frameworks and raw material cost volatility, particularly in grain markets. Periodic regulatory adjustments governing feedstock diversion continue to require careful operational planning. DBSIL mitigates these risks through:

Diversified feedstocks mix across molasses, juice and grain-based inputs.

Multi-location capacity deployment reducing single-plant concentration risk.

Disciplined working capital management across the ethanol supply cycle

Integrated operational infrastructure, sharing utilities with sugar operations.

Structured engagement with OMC tenders to secure volume and pricing visibility

Case Study:

The Kolhapur CBG Project

"Spent Wash to Green Fuel: Closing the Distillery Loop"

At DBSIL, our commitment to Circular Infrastructure is best demonstrated by the flagship 58 Crore Compressed Biogas (CBG) project at our Kolhapur unit. This initiative represents a defining "Waste-to-Wealth" milestone, transforming one of the distillery segments most challenging environmental liabilities - spent wash - into a high-value, revenue-generating green fuel.

Engineering the Circular Loop: From Pollutant to Power

Distillery spent wash has traditionally been a complex byproduct to manage due to its high organic load. By adopting advanced anaerobic digestion technology, we are engineering a closed-loop system that converts this waste into renewable energy. The Kolhapur plant is designed to achieve a peak output of 13 Tonnes Per Day (TPD) of Compressed Biogas, effectively neutralising the environmental footprint of our distillation process while maximising the caloric value of our waste streams.

The Revenue Model: Monetising Green Molecules

Monetising Green Molecules This project is not merely an environmental safeguard but a strategic driver of Financial Capital. We have established a robust commercial model in which the produced bio-CNG will be sold directly into Indias emerging green energy grid. Expected to be commissioned by November 2026, the project is to be funded through a disciplined mix of debt and equity, ensuring that our transition to a CBG leader remains aligned with disciplined capital allocation and long-term value creation.

Environmental Stewardship and ESG Impact

The Kolhapur CBG project directly addresses the core concerns of ESG investors regarding distillery waste management. By diverting spent wash into biogas production, we are:

Decarbonising Operations: Contributing to our phased decarbonization roadmap and reducing_ Scope 1 emissions.

Enhancing Resource E_iciency: Moving closer to our goal of near 100% circularity for all industrial byproducts.

Supporting Energy Security: Positioning DBSIL at the frontier of Indias National Biofuel Policy ecosystem by adding a new tier of renewable energy to our portfolio.

Through this project, Kolhapur continues its legacy as a global e_iciency leader, validated by its three consecutive CII Excellence in Energy Management Awards, proving that intelligent infrastructure can simultaneously protect the planet and the bottom line.

For more details on how our waste-to-wealth initiatives support regenerative agriculture and soil health, refer to the Natural Capital chapter on page [70]. For the specific financial impact of byproduct commercialisation, see the Financial Capital section on page [42].

Segment Outlook

Distillery Segment Outlook

The distillery segment is expected to remain a key growth driver as India continues to strengthen its biofuel ecosystem through the EBP programme. With 20% ethanol blending achieved ahead of schedule, ethanol demand from OMCs is expected to remain structurally strong, providing long-term visibility into volumes. The segment is likely to benefit from sustained policy support, expanding ethanol demand, increasing grain-based capacity (including the commissioning of the Gangapur (Baghauli) 100 KLPD unit), and growing adoption of diversified feedstocks. While regulatory developments related to feedstock allocation and ethanol pricing will continue to be monitored, the structural shift towards biofuels is expected to support stable medium-to-long- term growth.

Risk Management

Risks, Threats and Concerns

DBSIL operates in a complex, policy-regulated agro-industrial environment characterised by commodity price volatility, agro-climatic dependencies, and evolving regulatory frameworks. The Company maintains a structured enterprise risk management framework to identify, assess, monitor, and mitigate material risks across its integrated operations.

Competitive Strengths

Risk Category	Risk Identification	Mitigation Strategy
Regulatory & Policy	The sugar and ethanol industries operate within a highly regulated framework. Changes in FRP/SAP pricing, export quotas, ethanol diversion guidelines, and OMC procurement policies may affect operational and pricing dynamics.	Continuous monitoring of regulatory developments; proactive engagement with industry bodies and policymakers (ISMA, NFCSF); maintaining operational flexibility to balance sugar and ethanol production in line with policy directives.
Market & Economic	Volatility in global and domestic sugar prices, fluctuations in grain costs for ethanol production, inflationary pressures, and changes in interest rates can influence profitability and working capital requirements.	Diversified revenue streams across sugar, ethanol and renewable power moderate exposure to single-product price volatility. Disciplined inventory management and procurement strategies mitigate input price fluctuations.
Agro-Climatic & Operational	Sugarcane availability and recovery rates are influenced by climatic conditions, including irregular rainfall, droughts, floods, pest outbreaks (red rot disease), and soil health degradation, thereby impacting crushing volumes and throughput.	Strong farmer engagement programmes; adoption of high-yield and disease- resistant cane varieties; agronomic support initiatives; geographic diversification of manufacturing units across multiple cane belts in UP and Maharashtra.
Geopolitical & Trade	The ongoing conflict in the Middle East has heightened risks around energy prices, freight costs, shipping availability, petrochemical supply chains and broader trade flows. According to Reuters, the war has disrupted oil, LPG, and petrochemical movements through and around the Strait of Hormuz, contributing to higher crude prices, tighter input markets, and increased volatility across currencies and bond markets, including in India. These conditions may influence commodity realisations, input costs, export economics and overall market sentiment.	The Company remains predominantly oriented toward the domestic market and therefore has limited direct exposure to fluctuations in international demand. This provides partial insulation from external trade dislocation.However, the business may still be indirectly affected by higher fuel, logistics, fertiliser, packaging, and other input costs arising from global supply disruptions.Management continues to closely monitordevelopments in energy markets, trade flows and pricing conditions, while maintaining sourcing flexibility, prudent inventory planning and calibrated market strategies to respond to evolving conditions.
Sustainability & Environmental	Sugar manufacturing is resource-intensive, particularly in terms of water consumption and seasonal biomass utilisation. Increasing environmental regulations and evolving ESG disclosure expectations may impose additional compliance requirements.	Investment in water conservation; adoption of energy-e_icient technologies; utilisation of bagasse for renewable power generation; structured ESG reporting and compliance mechanisms to manage regulatory evolution.
Technology & Cybersecurity	The increasing digitalisation of plant operations, ERP platforms (SAP), and data infrastructure exposes operations to potential cyber threats, system disruptions, and data security risks.	Implementation of robust IT security protocols, network monitoring systems, data backup mechanisms, periodic cybersecurity audits, and employee awareness programmes to strengthen digital resilience.
Financial & Liquidity	Seasonal cash flows characterise the sugar industry, with inventory build-up cycles and significant working capital requirements. Movements in interest rates or tightening credit conditions could impact financing costs.	Prudent leverage levels; disciplined capital allocation; adequate liquidity bu_ers; long-standing banking relationships to ensure continued access to credit facilities across seasonal cycles.

Governance

Internal Control Systems and Their Adequacy

DBSIL maintains a comprehensive and evolving internal control framework designed to support its integrated operations across the sugar, distillery and cogeneration businesses. These systems are intended to ensure reliable financial reporting, operational e_iciency, compliance with applicable laws and regulations, and the protection of the Companys assets across its geographically distributed facilities.

The Companys internal control architecture is built on clearly defined responsibilities, risk-based control mechanisms and continuous monitoring processes. It includes well-established policies, documented standard operating procedures (SOPs), defined authorisation hierarchies, and periodic review mechanisms conducted at the plant, functional, and corporate levels.

Financial Controls

The Company has implemented structured financial controls covering key operational and financial processes such as procurement, inventory management, revenue recognition and capital expenditure. Transactions are governed by a maker- checker-approver framework, supported by enterprise-level SAP systems that facilitate automation, traceability, and compliance with internal policies and statutory requirements. Financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) and are subjected to periodic review and audit by statutory auditors.

Operational Controls

Operational controls are embedded within the Companys manufacturing, cane procurement and logistics processes. Standard operating procedures govern critical plant processes across all six manufacturing units. Regular management reviews and cross-functional oversight ensure that operational performance is monitored against established benchmarks and that deviations are identified and addressed promptly.

Compliance and Risk Management Controls

The Company maintains a structured Compliance Management Tool that tracks regulatory filings, environmental compliance requirements and industry-specific regulatory guidelines issued by central and state authorities. The regulatory developments and compliance requirements are promptly updated in the tool and mapped to the relevant operational and functional teams through the legal and compliance officer(s) to ensure adherence to evolving requirements.

Compliance with the SEBI Prevention of Insider Trading Regulations is ensured through the Insider Trading Compliance Management

System, which tracks all disclosures and approvals and maintains a Structured Digital Database with respect to Unpublished Price Sensitive Information.

The Audit Committee of the Board reviews the adequacy and effectiveness of internal control and compliance systems based on inputs from internal audits, statutory audits, and auto-generated compliance certificates generated through the compliance management tool and management assessments.

IT and Cybersecurity Controls

In line with the increasing digitalisation of business operations, the Company has implemented layered information technology controls designed to safeguard data integrity and system security. These include firewalls, controlled access mechanisms and secure authentication protocols. Periodic cybersecurity reviews and disaster recovery preparedness exercises are conducted to evaluate system resilience. Role- based access permissions and audit trails are maintained to monitor system usage and ensure accountability.

Internal Audit

The Company has engaged an independent internal audit firm to conduct risk-based internal audits in accordance with an audit plan approved by the Audit Committee.

The scope of these audits covers key operational processes, financial controls and compliance systems across business units. Observations and recommendations arising from internal audits are reviewed by management and presented to the Audit Committee for oversight. Appropriate corrective actions are undertaken to strengthen control mechanisms and enhance operational effectiveness.

Human Resources

Material Developments in Human Resources and Industrial Relations

In FY2026, DBSIL has accelerated its transition from "Metal to Mind," repositioning its workforce from manual task execution to "Value Architects" of a tech-led agro-energy enterprise. The total number of employees employed by the Company (directly or indirectly) during the year are 3400. Our human capital strategy is now aligned with capital discipline, productivity and operating excellence, focusing on three transformative pillars:

Organisational Restructuring and Agility: The NCLT-sanctioned demerger of the non-core refractory (DMC) and travel (GT) units was completed in FY2026, resulting in a leaner, more specialised workforce dedicated to our core Sugar, Distillery, and Power segments. Simultaneously, the Company successfully established its first international footprint in Tanzania, setting global mobility standards and workforce profiles for the Eagle Agrotech project.

The Digital Leap: Moving beyond the foundational digital retrofitting of FY2025, the Company has set a target of 100% digital literacy for the total workforce in FY2026. This initiative ensures that frontline factory staff can effectively "master" the predictive analytics, SCADA/DCS systems, and AI- driven forecasting tools that now govern our operational units.

Industrial Relations and Regulatory Evolution: Industrial relations remained harmonious throughout the organisational transition, supported by transparent collective bargaining and a zero-tolerance approach to human rights risks. On November 21, 2025, the Government of India notified four new Labour Codes; DBSIL has proactively recognised the initial financial impacts of these changes and is prepared for full compliance as final rules are notified.

Safety Mastery: Maintaining the Zero Fatality milestone remains our core priority. We have intensified our health and safety monitoring.

For a detailed analysis of our talent acquisition strategies, digital upskilling metrics, and comprehensive health and safety performance, please refer to the Human Capital chapter on page [88].

Sustainability Initiatives during FY2026

In FY2026, DBSIL has elevated sustainability from a compliance mandate to a primary strategic lens for "Mastering Challenges and Creating Value." Our Natural Capital strategy is now an essential engine for de-risking the supply chain and long- term margin protection. This year marks a transition from foundational environmental reporting to a regenerative industrial model, in which our physical operations are designed to return more to the ecosystem than they extract. Key initiatives for the year include:

Water Stewardship Leadership: We have intensified our watershed management and pond rejuvenation investments advancing near water-neutral operations through water-e_iciency and stewardship initiatives. This progress keeps us on the definitive path toward our 10x Water Positive goal by 2030, supported by a reduction in specific water consumption to <0.06 KL/ MT of cane.

Circular Economy & Waste-to-Wealth: A defining milestone is the development of our flagship 13 TPD Compressed Biogas (CBG) project at Kolhapur. By utilising anaerobic digestion to convert distillery spent wash into renewable biogas for sale to the grid, we are closing the loop on one of our most challenging waste streams while creating a new revenue driver.

Decarbonization & Thermal E_iciency: To "Master" climate risks, we have expanded the use of Mechanical Vapour Recompression (MVR) technology to lower energy intensity below 600 million KJ / million INR. A major forward-looking initiative is the 49 Crore steam-saving project at Jawaharpur, targeted to reduce steam consumption by 10% and save 54,000 MT of bagasse annually.

Regenerative Agriculture & Soil Health: We are deepening our engagement with 200,000+ partner cultivators to restore soil integrity. Through large-scale soil testing (18,000 samples analysed annually) and the provision of press mud and bio-compost, we are driving toward a soil organic carbon target of 0.5%–0.75% by 2030.

ESG Digital Integration: We have updated our ESG monitoring framework to a centralised, real-time reporting system that tracks core metrics - including carbon footprint and water intensity - across all operational units, including the newly integrated Gangapur (Baghauli) unit.

CSR Initiatives during FY2026

In FY2026, DBSIL has evolved its Corporate Social Responsibility (CSR) from a compliance mandate into a strategic lens for "Mastering Challenges and Creating Value" across its rural ecosystem. Rooted in the Gandhian principle of Trusteeship, our social strategy is designed to drive a triple bottom-line impact by sharing wealth and expertise with the 200,000+ partner cultivators who form the backbone of our supply chain. The Companys flagship Gram Parivartan program continues to anchor rural transformation. At the same time, the DIKSHa skilling centres have been repositioned to align with our digital leap, targeting 100% digital literacy and industry- ready vocational training for youth across Uttar Pradesh and Maharashtra. By integrating precision agriculture feedback loops and intensifying investments in community water stewardship and social infrastructure, DBSIL ensures that its industrial growth directly catalyses the socio-economic resilience of its host communities. For FY2026, we remain committed to a scalable impact model with an investment aligned with the statutory 2% mandate, ensuring that every rupee deployed reinforces our social license to operate and our long-term business viability.

Cautionary Statement

This document contains forward-looking statements that reflect the Companys current expectations, beliefs, assumptions, and estimates regarding future business performance and economic conditions. These statements are inherently subject to risks and uncertainties, many of which are beyond the Companys control. Actual results may differ materially from those projected due to a range of factors, including but not limited to global commodity price fluctuations, regulatory changes, climatic conditions, input cost pressures, and changes in consumer behaviour or government policy. The Company undertakes no obligation to publicly revise or update any forward-looking statements, whether due to new information, future developments, or otherwise. These statements should be read with the financial and operating performance data and risk factors outlined in this Annual Report.