Dhampur Bio Organics Ltd Management Discussions

Global economic review

Global economic grew marginally at 3.4% in 2025 compared to 3.3% in the previous year, influenced by the US tariff shock of April 2025. Despite being partially unwound through subsequent trade deals, it left effective tariff rates well above pre-2025 levels and heightened trade policy uncertainty.

Advanced economies witnessed a marginal growth from 1.8% in 2024 to 1.9% in 2025, while emerging market and developing economies demonstrated relative resilience, expanding by 4.4% in 2025 compared to 4.3% in 2024.

Global inflation continued its multi-year downward trend in 2025, declining to an estimated 4.1% from 5.8% in 2024.

Regional growth (%)	2025	2024
World output	3.4	3.3
Advanced economies	1.9	1.8
Emerging and developing economies	4.4	4.3

(Source: IMF, un.org)

Performance of the major economies, 2025

Outlook

Given the challenge of forming stable, real-time assumptions for projections, the IMF World Economic Outlook report adopted a reference forecast instead of a conventional baseline, assuming the war remains contained in duration, intensity, and reach, with disruptions easing by mid-2026, in line with commodity futures as of March 10, 2026.

Under this reference view, global growth is projected at 3.1% in 2026 and 3.2% in 2027. Global inflation is expected to rise to 4.4% in 2026 before easing to 3.7% in 2027.

(Source: OECD Interim Economic Outlook, IMF, World Economic Forum, Federal Reserve, Bank of England, European Central Bank, Bank of Japan)

Indian economic review

The Indian economys real GDP grew at 7.7% in FY 26 compared to 7.1% in FY 25. This growth was driven by strong consumption and increasing investments, reaffirming Indias position as the fastest-growing major economy.

Indias Real GDP at Constant Prices was estimated at H323.12 Lakh Crore in FY 2025-26, compared with H299.89 Lakh Crore for FY 2024-25.

Growth of the Indian economy

	FY 23	FY 24	FY 25	FY 26
Real GDP growth (%)	7.0*	7.2	7.1	7.7

E: Estimated. Note: FY24 figure restated under new base year 2022-23. (Source: MoSPI (February 27, 2026))

* The FY 23 figure (7.0%) is from the old base year series (2011-12) as the new series back-data for FY 23 will only be available after December 2026.

Growth of the Indian economy quarter by quarter, FY 2025-26

	Q1FY 26	Q2FY 26	Q3FY 26	Q4FY 26
Real GDP growth (%)	6.7	8.4	7.8	7.8

Note: Q2 revised upward from 8.2% and Q3 from 7.35% under the new base year 2022-23 series released February 27, 2026. (Source: MoSPI)

Infiation, policy and currency dynamics

Inflation remained benign through much of FY 26, with full-year CPI estimated at an exceptionally low 2.1%. This created room for 125 basis points of cumulative rate cuts, supporting consumption and investment.

However, macro stability was accompanied by currency volatility. The Indian rupee depreciated sharply by 9.88% during FY 26 - its steepest fall since FY 12 - touching H94.78 against the US dollar. This reflected global capital flows, a strong dollar environment, and geopolitical uncertainties.

Capital flows and market behaviour

Foreign portfolio investors remained risk-averse, withdrawing a record H1.8 Trillion during FY 26 - the largest outflow in 36 years. However, strong domestic institutional inflows of H8.50 Trillion provided a crucial counterbalance, highlighting the growing maturity and depth of Indias domestic capital markets.

Indias market capitalisation declined 8% year on year in FY 26 to $4.5 Trillion from $4.83 Trillion in FY 25, marking the sharpest drop since FY 23. The BSE Sensex declined 7% or 5,467 points in FY 26, against a gain of 5.1% or 3,763 points, in FY 25. Similarly, the Nifty 50 fell 5%, or 1,188 points, in FY 26, compared to a gain of 5.3% or 1,192 points, in FY 25. against a gain of 5.34%, or 1,192 points, in the corresponding period. The downturn was largely driven by the ongoing West Asia conflict and concerns around potential tariff measures under Donald Trump, which weighed on global investor sentiment. Gold prices surged 61.47% during FY 26 reflecting global risk aversion and safe-haven demand.

Indias net direct tax collections rose 5.12% y-o-y to H23.40 Lakh Crore in FY 26, though this fell short of the Revised Estimate of H24.21 Lakh Crore by approximately H80,000 Crore. Corporate tax collections came in at H10.99 Lakh Crore against a target of H11.09 Lakh Crore, while personal income tax (including STT) stood at H12.41 Lakh Crore against a target of H13.12 Lakh Crore - the larger of the two misses, partly reflecting the income tax relief extended to the middle class in the Union Budget 2025-26

Banking sector

Indias banking sector reflected improving financial health, with the gross non-performing asset ratio declining to a robust 2.1% as of September 2025, indicating stronger asset quality and disciplined lending practices. This stability was mirrored in profitability metrics, as scheduled commercial banks reported a return on assets of 1.3% and a return on equity of 12.5% during the first half of 2025-26, underscoring sustained operational efficiency and a healthier Balance Sheet trajectory.

Indias growth story

Real Gross Value Added (GVA), which measures economic output excluding taxes and subsidies, grew 7.9% in FY 26, compared with 7.3% in FY 25. At current prices, nominal GVA rose 9.1% to H314.87 Lakh Crore from H288.54 Lakh Crore a year earlier.

The tertiary services sector remained a key growth driver, expanding by 9.0% in FY 26 and increasing its share in nominal gross value added to 54.3% from 52.8% in FY 25, supported by broad-based momentum across segments.

During FY 26, financial, real estate, IT and professional services grew by 9.9%, while trade, hotels, transport, communication and broadcasting recorded a strong 10.1% growth, and public administration and other services expanded by 5.8%.

The secondary sector grew 9.1%, accelerating from 8.0%in the previous year, driven by manufacturing alongside construction growth of 7.1%. This combination of services-led scale and manufacturing acceleration is shaping a more balanced and resilient economic structure.

Consumption and investment

During FY 26, Private Final Consumption Expenditure (PFCE) and Gross Fixed Capital Formation (GFCF) maintained above-7% growth, reflecting a well-balanced demand composition across household spending and investment activity.

Growth catalysts

Policy-led consumption boost: The Union Budget FY 27s tax relief measures-particularly income tax exemptions up to H12 Lakh-are expected to stimulate discretionary spending and reinforce consumption-led growth.

Anticipatory Pay Commission impact: The 8^th Pay Commission, though expected to be implemented from FY 28, is already shaping consumer sentiment, creating a forward consumption impulse. Monetary stability: The Reserve Bank of Indias calibrated stance, with the repo rate at 5.25%, balances inflation risks with growth support, ensuring macroeconomic stability.

Credit expansion: Improved banking health and liquidity conditions are expected to sustain strong credit growth across MSMEs, housing, and retail segments.

Fiscal prudence with growth focus: The Union Budget maintains fiscal discipline while prioritising infrastructure, MSME support, skilling, and innovation-key levers for long-term productivity.

Outlook

The year under review underscores a defining divergence: a world grappling with uncertainty, and an India navigating it with confidence. In a global environment marked by fragmentation and caution, India stands out as a rare convergence of stability, scale and structural opportunity. The World Bank has revised its FY 27 growth estimate upward to approximately 6.6%, reflecting resilient domestic momentum even as growth moderates from the previous year. India is expected to retain its position as the fastest-growing major economy.

Growth will be shaped by a combination of strong domestic demand and resilient private consumption, supported by low inflation and GST rationalisation, alongside stable export performance with improved access to key markets. This momentum is further reinforced by sustained policy support, ongoing economic reforms, and a favourable demographic advantage.

While risks persist, particularly from elevated energy prices, subsidy pressures on government spending, and uncertainty in global demand, Indias macroeconomic fundamentals remain strong.

Over the medium term, sustained consumption, gradual investment recovery, and expanding global trade linkages are expected to reinforce Indias position as a key driver of global economic growth.

(Source: MoSPI, Business Standard, Press Information Bureau, IMF, OECD, Deccan Chronicle. NDTV Profit, Outlook Business, The Asian Banker)

Global sugar sector

The global sugar market witnessed a gradual return to supply stability during Sugar Season 2025-26 after several seasons marked by supply tightness and elevated price volatility. Higher production across major sugar-producing nations improved overall market availability, while global inventories recovered from previously declining levels.

Global sugar production reached nearly 189.3 Million Tonnes during SS 2025-26, reflecting an increase of 8.3 Million Tonnes over the previous year. The growth was led primarily by higher output in Brazil and India, which more than offset lower production in the European Union. China also recorded improved production of nearly 12.6 Million Tonnes during the year, with a further marginal increase expected in the upcoming season.

Brazil continued to play a central role in balancing global sugar supplies during the season, supported by favourable weather conditions, improved crop yields and expansion in cultivation areas.

However, the outlook for SS 2026-27 indicates a moderation in sugar production as mills are expected to divert a larger share of sugarcane towards ethanol. Consequently, Brazilian sugar exports are projected to decline from 33.8 Million Tonnes in SS 2025-26 to nearly 29 Million Tonnes in the following season.

Global trade flows remained resilient, with higher export shipments from Brazil, India and Thailand compensating for lower exports from the European Union. Thailand is expected to further strengthen its position with sugar production rising by around 2% to 10.3 Million Tonnes, supporting an increase in exports to nearly 7.0 Million Tonnes.

The stronger production environment also contributed to a recovery in global sugar inventories, particularly in India and China, indicating a rebuilding of stocks after multiple years of constrained supply conditions. In contrast, the United States experienced a modest decline in sugar production to nearly 8.5 Million Tonnes, with stock levels remaining under pressure due to quota-based import restrictions.

Indian sugar sector

Indias sugar sector is expected to witness a recovery in the 2025-26 marketing year, supported by improved sugarcane output, favourable crop conditions and higher recovery rates. Total sugar production is estimated at 31 Million Metric Tonnes (MMT), with 2.9 MMT diversion towards ethanol resulting in net sugar production of 28 MMT for the season. With internal consumption of 28 Million Tonnes and export of 0.75 Million Tonnes, closing stovk is expected to be around 4.25 MMT against the opening stock of 5 MMT. Onthepricingfront,theFairandRemunerativePrice(FRP)forsugarcane for the 2025-26 season was fixed at H3,550 per tonne, marking a 4% increase over the previous year. FRP for Sugar Season 2026-27 has been set at H3650 per Tonne. However, the Minimum Selling Price (MSP) for sugar has remained unchanged at H31,000 per tonne since 2019 despite rising cane procurement and production costs. The Indian sugar industry continues to strengthen its position as an integrated bio-energy sector through ethanol production and renewable energy initiatives. Supported by improving production fundamentals and stable domestic demand, the sector remains an important contributor to rural livelihoods, agricultural income and Indias clean energy transition

(Source: Chini mandi)

Indian sugar sectors Balance Sheet

(In million tonnes)	2022-23	2023-24	2024-25	2025-26 (E)
Opening stock as on October 1	7.0	5.6	7.9	5.0
Production during season (net of diversion)	32.8	32,0	26.1	28.0
Imports	0	0	0	0
Total Availability	39.8	37.6	34,0	33.0
i) Internal Consumption	27.8	28.5	28,1	2.80
ii) Exports	6.4	0	0.9	0.8
Total ofitake	34.2	28.5	29.0	28.8
Diversion for Ethanol	3.8	2.0	3.5	2.9
Closing stock as on September 30	5.6	9.1	5.0	4.3
(Source: ISMA, Green Leaf)

In Uttar Pradesh, the state government announced a H300 per Tonne increase in the State Advised Price (SAP) for the 2025-26 crushing season. Under the revised structure, SAP for early maturing sugarcane varieties was fixed at H4,000 per Tonne, while common varieties were priced at H3,900 per Tonne, benefiting nearly 4.5 Million farmer households across the state.

Ethanol production continues to remain at the centre of Indias energy transition strategy. For ESY 2025-26, the sugar mills had option to produce ethanol from all sugarcane-based feedstocks, including cane juice, sugar syrup, B-heavy molasses and C-heavy molasses along with grain as feedstock in dual feed distilleries. Overall, the contribution of sugar and grain sector in ethanol supply stands at around 35% and 65% respectively. With Indias achievement of the 20% ethanol blending target, now the focus is on identifying avenues to expand ethanol blending beyond E20 tosupport domestic energy security.

(Sources: Chini Mandi, Hindustan times, PIB)

SWOT analysis of the Indian sugar sector

Strengths

- India remains one of the worlds largest sugar producers and consumers, with a well-established domestic market and extensive production base

- The industry has evolved into an integrated bio-energy sector, with by-products such as bagasse, molasses and press mud supporting ethanol production, cogeneration and compressed biogas initiatives

- Achievement of 20% ethanol blending has strengthened the sectors long-term demand outlook and improved revenue diversification for sugar mills

Weaknesses

- The industry continues to remain highly dependent on monsoon patterns and water availability

- Sugarcane is a water-intensive crop, creating sustainability concerns in drought-prone regions

- High cane procurement prices and regulated pricing mechanisms continue to pressure mill profitability

- Several sugar mills continue to face financial stress, delayed cane payments and high debt burdens

Opportunities

- Rising ethanol demand and the possibility of blending targets beyond E20 present significant long-term growth opportunities

- Expansion of sustainable aviation fuel (SAF), biofuels and green energy initiatives can enhance demand for sugar industry by-products

- Increasing mechanisation, precision farming and high-yield cane varieties can improve farm productivity and recovery rates

- The sector supports the livelihoods of over 50 Million sugarcane farmers and a large rural workforce engaged in cultivation, transportation and processing activities

- Sugarcane continues to remain an important remunerative cash crop across key producing states including Uttar Pradesh, Maharashtra and Karnataka

- India has developed significant ethanol production capacity, improving the sectors resilience against cyclical sugar price fluctuations

- The sector remains capital intensive, with relatively low operating margins in standalone sugar operations

- Export competitiveness remains vulnerable to fluctuations in global sugar prices and logistics costs

- Technological modernisation across farming, harvesting and mill operations remains uneven

- Growing investments in integrated sugar complexes can improve operational efficiencies and revenue diversification

- Indiaslargedomesticconsumptionbasecontinuestoprovide stable long-term demand for sugar and allied products

- Policy support for renewable energy, biofuels and circular economy initiatives is expected to strengthen the sectors growth trajectory

Threats

- Climate change, erratic rainfall and extreme weather events continue to pose risks to sugarcane output and recovery levels

- Global sugar price volatility and sugar dumping by major exporting countries can impact export realisations

- Government intervention through export restrictions and stock controls can affect industry profitability and planning

- Increasing competition from alternative crops may influence sugarcane acreage in key producing regions

- Rising environmental concerns regarding water usage and carbon intensity could increase regulatory pressures on the sector

- Changing consumer preferences and growing health consciousness may moderate long-term sugar consumption growth

Outlook

The outlook for the Indian sugar sector remains closely tied to domestic supply dynamics, ethanol diversion and government policy interventions. In a significant policy shift, the Government of India banned sugar exports with immediate effect until September 30, or until further orders, citing domestic supply considerations.

The Indian Sugar & Bio-Energy Manufacturers Association (ISMA) expected Indias gross sugar production at 31 Million Tonnes for the season ending September 30, 2026 revised downward from its earlier estimate of 32.4 Million Tonnes. Going forward, the sectors performance is expected to remain influenced by production trends, weather conditions, ethanol diversion policies and government decisions on export controls and domestic supply management.

(Source: NDTV)

Indian biofuel sector

In ESY 2025-26, ethanol blending in petrol achieved the landmark 20% target in November 2025, with the cumulative average blending remaining at 20% through December 2025. Between November 2025 and April 2026, Oil Marketing Companies (OMCs) received 513.6 Crore Litres of ethanol, while total blending during the same period stood at approximately 542.7 Crore Litres.

This marks a significant achievement for Indias ethanol blending programme, with blending levels rising from 1.5% in 2014 to 20% in 2025 - five years ahead of the original 2030 target. Over the past decade, the initiative has resulted in foreign exchange savings of more than H1,44,000 Crore, reduction of approximately 736 Lakh Metric Tonnes of CO2 emissions, and substitution of 245 Lakh Metric Tonnes of crude oil.

Total ethanol demand for ESY 2025-26 is estimated at around 1,350 Crore Litres. Under Cycle 1, OMCs allocated nearly 1,048 Crore Litres against manufacturer offers of 1,776 Crore Litres.

As of November 2025, Indias total ethanol production capacity stood at approximately 1,990 Crore Litres, exceeding the capacity required to support the 20% blending mandate. Industry participants are now advocating for targets beyond E20.

(Source: Chini mandi, Economic Times, HMSA Consultancy, Dhanashree crop solutions)

Indian renewable energy sector

India accelerated its clean energy transition significantly during FY 2025-26, adding a record 55.3 GW of non-fossil fuel capacity - nearly double the 29.5 GW added in the previous year. As of March 31, 2026, the countrys total non-fossil fuel installed capacity stood at 283.46 GW, comprising 274.68 GW of renewable energy and 8.78 GW of nuclear power.

Non-fossil fuel sources contributed 29.2% of Indias total electricity generation during the year, accounting for 538.97 billion units (BU) of power generation. In June 2025, India achieved a major milestone by sourcing 50% of its cumulative installed electricity capacity from non-fossil fuel sources - five years ahead of the 2030 target committed under its Nationally Determined Contributions (NDCs) to the Paris Agreement. Further underscoring this momentum, renewable energy met a record 51.5% of the countrys electricity demand of 203 GW on July 29, 2025, marking the highest-ever single-day share of renewable power generation in India.

Solar energy remained the key growth driver, with India adding an unprecedented 44 GW of solar capacity in 2025, taking the countrys total installed solar capacity to 150 GW. Distributed Renewable Energy (DRE) systems contributed 16.3 GW, representing 36% of total solar additions. This included 7.6 GW added under the PM KUSUM scheme and 8.7 GW from rooftop solar installations.

The wind energy sector also witnessed strong growth momentum. India recorded its highest-ever annual wind capacity addition of 6.05 GW during FY 2025-26, surpassing the previous peak of 5.5 GW achieved in FY 2016-17. This represented a nearly 46% increase over additions made in FY 2024-25, highlighting a sharp acceleration in the countrys onshore wind deployment trajectory.

With these achievements, India has emerged as the worlds third-largest renewable energy market in terms of installed capacity, according to IRENA Renewable Energy Statistics 2026, surpassing Brazil. The country continues to advance towards its target of achieving 500 GW of non-fossil fuel-based energy capacity by 2030.

(Source: PIB, The Hindu Business Line, Vajiramad Ravi- current affairs)

Company overview

Dhampur Bio Organics Limited is an integrated sugar enterprise with an expanding presence across agri-business and bio energy, backed by deep domain expertise and advanced manufacturing infrastructure in Uttar Pradesh. The Company operates three modern facilities located at Asmoli, Mansurpur, and Meerganj, and manages its operations through three core verticals, sugar, biofuels and spirits, and country liquor.

In FY 2025-26, sugarcane crushing capacity stood at 29,500 TCD, while biofuel production capacity based on sugar syrup and B heavy molasses reached 312.5 KLPD. The Companys growth strategy is anchored in innovation, integration, and value enhancement, complemented by a strong focus on sustainable practices and community development initiatives spanning rural education, skill development, healthcare, and sports.

The numbers mentioned in Management Discussion & Analysis Report are based on Standalone Financial Statements.

Business vertical

Sugar (refined, sulphitation, raw sugar and renewable energy)

Dhampur Bio Organics Limited operates an aggregate cane crushing capacity of 29500 TCD as of March 31, 2026, across its Asmoli, Mansurpur and Meerganj units. The portfolio spans refined sugar, sulphitation sugar in packed and branded formats, white sugar and pharma grade sugar, with requisite approvals from the Food Safety and Standards Authority of India.

The sugar division has been reinforced through operational efficiencies, proactive engagement with farmers and sustained emphasis on cane development. Moreover, the Company optimises resource utilisation by channelling sugar manufacturing by-products into biofuel production and cogeneration of power, strengthening profitability while underlining its commitment to sustainable and responsible operations.

Outlook

Dhampur Bio Organics Limited will continue to prioritise operational efficiency and cost optimisation across its operations. A key focus area remains strengthening the sugarcane development programme through the introduction of high yielding varieties within its command areas to enhance productivity and recovery. Another focus area is premiumization and development of institutional clients to achieve positive growth in both volumes and margins.

The Company will sustain its contribution to renewable energy by supplying surplus power to the state grid through its cogeneration facilities, reinforcing its commitment to sustainability and sound environmental governance. In parallel, it will optimise the utilisation of resources and by products by marketing surplus bagasse in the open market, thereby unlocking additional value while supporting a more efficient and sustainable operating model.

Key highlights of FY 2025-26

- Sugarcane crushed during the year stood at 32.92 Lakh Tonnes, compared with 34.98 Lakh Tonnes in the previous fiscal.

- No diversion of sugarcane towards syrup-based ethanol, down from 3.37 Lakh Tonnes in FY 2024-25.

- Sugar production for FY 2025-26 was 3.54 Lakh Tonnes.

- Sugar contributed 54% to total revenue, marginally lower than 58% in FY 2024-25.

- Net recovery after diversion to B heavy ethanol was 10.74% in FY 2025-26, as against 9.8% in the preceding year.

- As on March 31, 2026, inventory levels were at 2.20 Lakh Tonnes, with an average carrying value of H37.76 per Kg.

- Co-generation power output amounted to 23.84 Crore units during the year, compared with 23.33 Crore units in FY 2024-25.

- Energy sales were 9.06 Crore units, higher than 7.10 Crore units in the previous fiscal year.

- The co-generation segment realised an average tariff of H4.43 per unit.

Biofuels and Spirits (ethanol and country liquor)

Dhampur Bio Organics Limited operates its distillery at Asmoli, producing ethanol using syrup, B heavy and C heavy molasses and grain (maize/rice) as feedstock. The part of distillery capacity i.e., 100 KLPD was converted from molasses based distillery to molasses and grain based dual feed distillery providing flexibility of feedstocks. The continued thrust on biofuels provides a supportive environment reinforcing the Companys strategic focus on ethanol and allied products.

Outlook

Going forward, the Company aims to further optimise its biofuels and spirits operations through a calibrated approach to feedstock selection and product mix. It also plans to evaluate alternative raw materials for ethanol production to broaden its portfolio and enhance capacity utilisation. These measures are intended to strengthen margins while sustaining growth and competitive positioning in the evolving bio energy landscape.

Key highlights of FY 2025-26

- Ethanol production during FY 2025-26 stood at 680.9 Lakh bulk litres, compared with 609.8 Lakh bulk litres in FY 2024-25.

- Of the total output, 228.7 Lakh bulk litres and 277.3 Lakh bulk litres were derived from B heavy and C heavy molasses, 174.9 Lakh bulk litres from Grain including Extra Neutral Alcohol and no Ethanol was produced from sugarcane syrup.

- Ethanol sales aggregated to 581.8 Lakh bulk litre at an average realisation of H59.3 per bulk litre, as against 504 Lakh bulk litres at H60.61 per bulk litre in the previous fiscal year.

- EBIT for the segment stood at H8.39 Crores in FY 2025-26.

- Country liquor sales during the year were 44.13 Lakh cases against 37.64 Lakh cases in last fiscal year.

- EBIT for the segment stood at H16.75 Crores in FY 2025-26

- The 100 KL per day distillery capacity is converted into a dual feed facility, enabling operations using both molasses and grain.

Risk management
Risk	Impact	Mitigation
Demand risk	Oversupply	A well-diversified portfolio across sugar, ethanol and country liquor segments supports margin stability. Effective utilisation of by-products further enhances overall profitability.
Raw material risk	Raw material shortages	Access to large cane cultivation areas is supported through the supply of high yielding cane varieties, regular farmer engagement and timely payments, ensuring a stable and reliable cane supply.
Climate risk	Unpredictable weather and pest issues	Efficient irrigation practices, well irrigated catchment areas and continuous farmer education help mitigate climate related risks. The use of improved agricultural inputs, fertilizers and pesticides reduces pest related losses and improves crop resilience.
Government policy framework	Unfavourable policy changes	Export controls on sugar, coupled with policy support for ethanol blending, act as structural growth enablers for the industry.
Geographical risk	Distance between cane fields and mills	Facilities are strategically located within high yielding cane growing regions and supported by strong road connectivity, reducing logistical and geographical challenges.
Environment regulatory risk	Changes in environmental regulations	Strict compliance with regulatory requirements and adoption of industry best practices reinforces the Companys commitment to environmental responsibility.
Operational risk	Inefficient operations	An experienced management team enables efficient operations and timely resolution of operational challenges.
IT risk	Data theft and technology obsoletion	Deployment of advanced technology systems, strong security protocols, cloud-based encryption and an in-house Information Security Management System ensure data protection and policy compliance.
Financial risk	Capital intensive operations and leverage	Focus on timely debt servicing and continuous strengthening of the balance sheet supports financial stability.

Financial performance

Analysis of the Profit and Loss Statement

Revenues: Revenues from operations stood at H3106.17 Crore in FY 2025-26 as compared to H2,714.40 Crore in FY 2024-25, clocking a YoY growth of 14.43%. The key drivers for this growth are higher sugar sale and sugar realisation coupled with enhanced power tariff and higher country liquor sales. Other incomes accounted for only 1% share of our revenues, reflecting its dependence on its core business operations.

Expenses: Total expenses stood at H3096.85 Crore in FY 2025-26 against H2,695.31 Crore in FY 2024-25. Raw material costs, including changes in inventories and purchase of traded goods, stood at H1575.23 Crore, accounting for 50.71% share of our revenues, during the fiscal. Employee expenses stood at H112.70 Crore in FY 2025-26, accounting for 3.63% share of our revenues. Further, finance costs and other expenses accounted for H62.96 Crore and H263.04 Crore in FY 2025-26, respectively. The excise duty on sale of goods accounts for H1024.16 Crore in FY 2025-26.

Profits: Profit after tax stood at H24.97 Crore in FY 2025-26 against H12.09 Crore in FY 2024-25 representing a YoY increase of 107%.

Analysis of Balance Sheet

Sources of funds: The capital employed by DBO decreased by 4% from H2,169.86 Crore as on March 31, 2025 to H2,083.85 Crore as on March 31, 2026. Return on capital employed, a measure of returns derived from every rupee invested in the business, stood at 4.85% in FY 2025-26.

Net worth increased by 1.19%, from H1,017.61Crore as on March 31, 2025, to H1,029.68 Crore as on March 31, 2026. Our equity share capital stood at H66.39 Crore, comprising 6.64 Crore equity shares of H10 each.

Long-term debt decreased by 6.11% to H289.93 Crore as on March 31, 2026 on account of repayment of long-term loan. Long-term debt equity ratio stood at 0.28 in FY 2025-26 as compared to 0.30 in FY 2024-25. Gross debt stood at H1,048.01Crore, which includes H207.25 Crore long-term loan, H758.08 Crore of working capital loans, and current maturity of long-term loans of H82.68 Crore. Finance costs stood at H62.96 Crore in FY 2025-26. Our interest cover stood at a comfortable 2.57 times in FY 2025-26.

Application of funds: Gross fixed assets increased by 6.78%, from H1,623.25 Crore as on March 31, 2025, to H1733.27 Crore as on March 31, 2026. Accumulated depreciation on tangible assets increased by 9.32 % from H556.80 Crore in FY 2024-25 to H608.69 Crore in FY 2025-26.

Working capital management

Current assets as on March 31, 2026 are H1,154.27 Crore while as on March 31, 2025 current assets stood at H1,198.86 Crore. The current and quick ratios stood at 1.14 and 0.15 respectively, in FY 2025-26. Inventories including raw materials, work-in-progress and finished goods, among others, as on March 31, 2026 stood at H994.45 Crore while as on March 31, 2025 was H1,051.39 Crore. The inventory cycle stood at 120 days of turnover in FY 2025-26.

Trade receivables decreased from H96 Crore as on March 31, 2025 to H84.94 Crore as on March 31, 2026. Our debtors turnover cycle stood at 11 days in FY 2025-26. Cash and bank balances decreased by 35% from H6.90 Crore as on March 31, 2025, to H4.50 Crore as on March 31, 2026.

Margins

The EBIDTA margin stood at 5.22% while net profit margin stood at 0.80%

Key ratios
Particulars	FY 2025-26	FY 2024-25
EBITDA/Turnover (%)	5.22	5.29
EBITDA/Net interest ratio (x)	2.57	2.14
Total debt-equity ratio (x)	1.02	1.13
Long-term debt-equity ratio (x)	0.28	0.30
Return on equity (%)	2.44	1.19
Book value per share (H)	155.10	153.28
Earnings per share (H) (Basic EPS)	3.78	1.82
Debtors turnover (days)	11	12
Inventory turnover (days)	120	143
Interest coverage ratio (x)	2.57	2.14
Current ratio (x)	1.14	1.12
Net profit margin (%)	0.80	0.45

Internal control systems and their adequacy

The Company has established a comprehensive internal control framework that is periodically reviewed and strengthened to safeguard assets, ensure compliance with applicable laws and regulations, and address identified gaps in a timely manner. The Audit Committee regularly evaluates reports submitted by the internal auditors, reviews their observations, and oversees the implementation of corrective measures wherever required. Continuous coordination with both internal and statutory auditors supports the effective functioning of the overall control environment.

To promote transparency and equal access to information, all key disclosures are made available on the Companys website under a dedicated Investors section. This includes details relating to the Board of Directors, shareholding pattern, quarterly and annual financial results, annual reports, press releases, unpaid or unclaimed dividends and corporate policies. Material developments that may influence revenue or profitability are promptly intimated to the stock exchanges and published online. Investor presentations and regulatory filings are also accessible through the website.

Human resources and industrial relations

The Company regards its employees as its most critical asset and remains committed to fostering a safe, inclusive and supportive workplace. It promotes a culture of fairness by ensuring equitable growth opportunities and merit based advancement across all levels. Recognising that organisational performance is closely linked to workforce capability, the Company invests consistently in structured learning and development initiatives to enhance skills and competencies. Strong focus is also placed on employee engagement and retention to build a motivated and stable workforce.

As of March 31, 2026, the Company had a total workforce of 1,692 employees.

Cautionary statement

The statements in the management discussion and analysis contain the Companys objectives, forecasts, expectations, and estimates, which may be considered forward-looking statements under applicable securities laws and regulations. These statements are based on various published and unpublished reports used to compile market statistics and information. However, the accuracy, completeness, and reliability of these reports cannot be guaranteed.