Dwarikesh Sugar Industries Ltd Management Discussions

Global economy

The global economy remained unchanged at 3.4% in 2024 and 2025, influenced by the US tari_ shock of April 2025. Growth remained steady due to strong technology-sector investments, resilient trade activity, adaptive supply chains, and supportive policy measures.

Businesses adapted to evolving trade patterns and stable demand across major economies helped sustain overall economic activity.

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, declined marginally by 4.4% in 2025 compared to 4.5% 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	3.4
Advanced economies	1.9	1.8
Emerging and developing economies	4.4	4.5

Outlook

The global economy is expected to moderate over the next two years amid continued geopolitical tensions, trade disruptions, inflationary pressures, and heightened energy-market uncertainty. The outbreak of the US–Iran conflict in February 2026 has added a further layer of risk to the global outlook, contributing to volatility in oil prices, disruptions to trade routes, and increased uncertainty across financial markets. Global growth is projected at 3.1% in 2026 and 3.2% in 2027, while inflation is expected to remain elevated before gradually easing. Although policy support and supply-chain adjustments may help stabilise markets, the external environment is likely to remain uncertain and volatile. Businesses may therefore continue to face pressure from cautious consumer demand, fluctuating input costs, and evolving trade dynamics.

(Source: IMF April 2026 Outlook)

Growth of the Indian economy

	FY23	FY24	FY25	FY26E
Real GDP growth (%)	7.0*	7.2	7.1	7.7

E: Estimated. (Source: MoSPI)

**FY23 GDP growth is based on the 2011–12 base year series, while FY24 onwards are based on the revised GDP series with base year 2022–23. Comparable FY23 data under the revised series is not yet available.

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

	Q1FY26	Q2FY26	Q3FY26	Q4FY26
Real GDP growth (%)	6.8	8.3	8.0	7.8

Inflation, policy and currency dynamics

Inflation remained benign through much of 2025-26, with full-year CPI estimated at 2.1%. This created room for cumulative rate cuts of 100 basis points supporting consumption and investment activity.

However, macroeconomic stability was accompanied by currency volatility. The Indian rupee depreciated sharply by 9.9% during 2025-26 — its steepest annual fall since FY12 — touching

H94.78 against the US dollar. The depreciation was driven by global capital outflows, elevated crude oil prices, a strengthening US dollar. and geopolitical uncertainties.

Foreign portfolio investors remained risk-averse, withdrawing H1.8 trillion during 2025-26. However, strong domestic institutional inflows of approximately H8.5 trillion provided a crucial counterbalance, highlighting the growing depth and resilience of Indias domestic capital markets.

Indias market capitalisation declined 8% year on year in 2025-26 to US$ 4.5 trillion from US$ 4.83 trillion in 2024-25. The BSE Sensex declined 7% or 5,467 points in 2025-26, against a gain of 5.1% or 3,763 points, in 2024-25. Similarly, the Nifty 50 fell 5%, or 1,188 points, in_ 2025-26, compared to a gain of 5.3% or 1,192 points, in 2024-25. The downturn was largely driven by the ongoing West Asia conflict and concerns around potential tari_ measures under Donald Trump, which weighed on global investor sentiment.

The US-Iran war in February 2026 further dampened the global investor sentiment.

Gold prices surged 64.1% during 2025-26 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 2025-26, 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.

Indias banking sector reflected improving financial health, with the gross non-performing asset ratio declining to 2.1% as of September 2025, indicating stronger asset quality. 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, reflecting continued improvement in profitability.

Economic growth in 2025–26 was primarily driven by the non-primary sectors, reflecting the continued structural shift towards industrial and service-led activities. While the primary sector recorded moderate growth of 3.2% at constant prices, supported mainly by agriculture and fisheries, the secondary and tertiary sectors emerged as the principal contributors to overall economic expansion, registering robust growth of 8.8% and 9.3%, respectively. Within the economy, manufacturing, trade, repair, hotels, transport, communication, services related to broadcasting and storage, and financial, real estate and professional services recorded double-digit growth at both constant and current prices, indicating strong momentum across key production and service-oriented activities. The broad-based performance of these sectors points to strengthening industrial output, expanding commercial activity, and increasing demand for business and financial services.

On the expenditure side, growth remained supported by both consumption and investment demand. Private Final Consumption Expenditure (PFCE) and Gross Fixed Capital Formation (GFCF) each recorded growth exceeding 7.5% during 2025–26, suggesting sustained household spending alongside continued capital creation. The simultaneous expansion of consumption and investment reflects a healthy demand environment and provides a strong foundation for future economic growth.

Outlook

The year under review highlighted the contrast between a global economy facing continued uncertainty and an Indian economy that remained relatively resilient. Supported by strong domestic demand, sustained infrastructure investment, and supportive policy measures, India is expected to remain among the fastest-growing major economies globally, with the World Bank revising its FY27 growth forecast to around 6.6%.

Growth is expected to be driven by resilient private consumption, a relatively stable interest rate environment, continued government capital expenditure, and strengthening trade linkages. However, risks to the outlook have increased following the escalation of the US–Iran conflict in 2026, which has heightened volatility in crude oil prices and global financial markets. As highlighted by the Reserve Bank of India (RBI), higher crude and input costs could exert upward pressure on inflation and business costs. While elevated energy prices, geopolitical uncertainties, and global demand weakness may pose near-term challenges, Indias strong macroeconomic fundamentals, favourable demographics, increasing urbanisation, and continued focus on economic development are expected to support long-term growth.

Policy-led consumption boost: Public capital expenditure has emerged as a key driver of Indias growth story over the past decade. Budgetary allocation towards capital expenditure has increased more than five-fold, from approximately H2 lakh crore in FY2014–15 to H11.2 lakh crore in the Union Budget FY2025–26, reflecting the Governments sustained focus on infrastructure-led development. Building on this momentum, the allocation has been further increased to H12.2 lakh crore for FY2026–27. Continued investments in roads, railways, airports, urban infrastructure, logistics, and industrial corridors are expected to enhance connectivity, improve productivity, stimulate private investment, generate employment, and create a strong multiplier effect across sectors, including real estate, construction, and allied industries...

Anticipatory Pay Commission impact: The 8th Pay Commission, though expected to be implemented from FY28, expectations of higher salaries, pension revisions, and improved disposable incomes among central government employees and pensioners are already influencing consumer sentiment. This anticipated increase in purchasing power is creating a forward consumption impulse, encouraging discretionary spending and strengthening demand across sectors such as housing, automobiles, consumer durables, and retail. Historically, pay commission revisions have supported consumption growth and housing demand, particularly in urban markets, and the prospect of similar income enhancement is expected to contribute positively to economic activity in the period leading up to implementation.

Monetary stability: With the repo rate at 5.25%, the RBI has sought to strike a balance between supporting economic growth and containing inflationary pressures. Stable interest rates, coupled with adequate liquidity and a resilient banking system, have helped sustain credit growth, support private consumption and investment, and improve financing conditions across sectors. This measured approach provides businesses and consumers with greater confidence and predictability, while strengthening the economys ability to navigate external shocks, including geopolitical uncertainties, volatile commodity prices, and global financial market fluctuations. Credit expansion: Bank credit in India is expected to grow around 13% in FY27, supported mainly by strong demand from retail and MSME segments, with MSME lending remaining the fastest-growing segment for banks. ICRA estimates credit expansion of H23.50–25.00 trillion in FY2027, with retail and MSMEs as the major growth drivers, while private sector banks are expected to refocus on growth after having reduced their credit-deposit ratios.

Fiscal prudence with growth focus: The Union Budget 2026-27 proposed capital expenditure of H12.2 lakh crore — a 9% increase — placing infrastructure at the centre of the growth strategy, with investments across freight corridors, energy, and digital infrastructure expected to support productivity and crowd in private investment. The fiscal deficit target was reduced to 4.3% of GDP for FY27, with the debt-to-GDP ratio on a declining trajectory.

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

Global sugar sector overview

Global sugar production for 2025–26 is projected by the International Sugar Organisation (ISO) in its February 2026 report to rise by 5.5 million tons year-on-year, reaching 181.80 million tons. Some other leading research agencies anticipate even higher output levels. Increased production in Brazil is expected to more than offset the decline in the European Union. Higher export volumes from Brazil, India, and Thailand are likely to compensate for reduced shipments from the EU, thereby supporting overall supply stability. As a result, global ending stocks are expected to remain broadly stable.

On the demand side, global sugar consumption in 2025–26 is forecast to reach a record 180.1 million metric tons, reflecting year-on-year growth of approximately 1.5%. This expansion is largely driven by rising demand in the Asia-Pacific and sub-Saharan Africa regions, supported by population growth and continued expansion in the food services sector.

United States of America: U.S. sugar production is expected to decline marginally year on year to 8.5 million tons. Imports are projected to be lower, reflecting quota programmes maintained at minimum levels in line with World Trade Organisation and free trade agreement commitments, along with reduced inflows from

Mexico, re-exports, and high tari_ imports. Consumption is also slightly lower, while stocks are expected to decline, primarily due to reduced imports.

Brazil: Brazils sugar production is projected to increase by around 700,000 tons from 2024-25 to 44.4 million tons, supported by improved yields driven by favorable weather conditions. The production mix is expected to tilt slightly towards sugar, with about 51% allocated to sugar and 49% to ethanol. Domestic consumption is likely to remain stable, while exports are set to rise in line with higher output.

Europe: In the European Union, sugar production is forecast to decline by about 5% year on year to 15.5 million tons. This is mainly due to an expected 8% reduction in sugar beet acreage across key producing countries such as France and Germany. Consumption and ending stocks are likely to remain largely stable, while imports are expected to increase to offset lower production, and exports are projected to decline. Thailand: Thailands sugar production is expected to grow by around 2% to 10.3 million tons, supported by higher sugarcane output and improved yields. With domestic consumption remaining steady, exports are projected to continue recovering to about 7.0 million tons, leading to a drawdown in stocks to around 2.5 million tons. India: At the start of the 2025–26 sugar season (SS 2025–26), Indias gross sugar production was projected to rise by 26% year-on-year to 35.3 million tons. However, adverse weather conditions have since disrupted expectations, and production is now estimated at around 31.2 million tons. Net production is projected at 28.2 million tons. Meanwhile, domestic consumption is expected to remain largely flat.

Australia: Australias production is projected to rise by 150,000 tons, reaching 4.0 million tons due to slightly improved yields. Exports are anticipated to increase with the additional output, while domestic consumption remains largely stable. Indonesia: For marketing year 2025/26, Indonesian sugarcane and plantation white sugar production are projected to rise to 35.0 million metric tons and 2.6 million metric tons, respectively. This growth is supported by expanded harvested areas and favorable La Ni?a conditions. Sugarcane yields are expected to increase to 67.9 metric tons per hectare, up from 63.4 MT/ha in 2023/24. With higher domestic plantation white sugar output expected, the Government of Indonesia has not allocated imports for plantation white sugar in 2025/26 and has slightly reduced raw sugar import quotas for refineries. Raw sugar imports are forecast to remain stable at 5.0 million metric tons, constrained by a weaker exchange rate. Sugar consumption is projected to reach 7.7 million metric tons of raw sugar equivalent, driven by population growth and rising demand from the food and beverage sector. Indonesia aims to achieve white-sugar self-sufficiency by 2026 through plantation intensification, improved seed varieties, irrigation upgrades, and a 500,000-hectare expansion of sugarcane cultivation. The Indonesian sugar market is valued at around US$ 8.45 billion in 2025 and is expected to grow at a CAGR of 4.74% through 2030, supported by rising domestic demand and government self-sufficiency policies.

Turkiye: T?rkiyes beet sugar production in marketing year 2025/26 is forecast to decline to about 2.9 million metric tons due to adverse weather in key beet-growing regions, reversing the relative stability of recent seasons. Imports are expected to increase to offset the decline, but this depends on the government reinstating duty-free sugar imports under the Inward Processing Regime (IPR). The IPR allows sugar to be imported tari_-free for use in exported food or beverage products, bypassing the standard 135% tari_. Without IPR, the ability to compensate for domestic shortfalls through imports would be limited. The Turkish sugar sector remains heavily regulated, with production quotas and certain prices set by presidential decree. This structure creates ine_ciencies and makes Turkish sugar more expensive compared with international benchmarks.

China: Chinas sugar production is projected to rise by 340,000 tons in 2025/26, reaching 11.5 million metric tons. Growth is supported by expanded sugarcane acreage and favorable weather improving sugar beet yields, strengthening overall output. With production outpacing domestic demand, the surplus is expected to flow into reserves. Ending stocks could increase by nearly 50% to around 2.4 million tons, enhancing supply security and reducing exposure to global price volatility. As a major consumer and importer, changes in Chinas import patterns have significant implications for global trade. The current stock-building phase suggests a lower import dependence, which may exert modest downward pressure on global sugar prices in the near term.

(Sources: USDA, Sugar Online, ISO)

World sugar balance (October/September, in thousand tonnes, tel quel)

	2025/26	2024/25	2023/24	2022/23	2021/22	2020/21	2019/20
Production	181,287	176,056	181,095	175,473	172,189	168,702	167,866
Consumption	180,069	179,520	181,207	177,344	176,066	169,266	168,492
Surplus/deficit	1,218	-3,464	-112	-1,871	-3,877	-564	-626
Import demand	63,222	64,731	71,475	68,435	67,790	64,901	65,768
Export availability	64,324	64,796	71,521	68,446	67,663	64,858	65,717
End stocks	93,300	93,184	96,713	96,919	98,801	102,544	102,950

Global sugar price realisations

Sugar prices entered 2026 under considerable pressure. The ICE No. 11 front-month contract fell below 14 US cents per pound — roughly 28% lower than March 2025 levels and nearly 40% below the 2023 peak above 27 US cents per pound. This decline reflects a global surplus driven by strong production in Brazil, India, and Thailand. The 2025/26 global market is expected to close with a surplus. Looking ahead, medium-term prospects point to a modest recovery.

Between 2026 and 2031, global sugar prices are projected to rise from around US$ 430 per tonne to approximately US$ 720 per tonne. However, these levels remain below 2022 prices, making sugar more accessible and affordable for consumers while posing structural challenges for producers aiming for higher returns.

(Source: Trading Economics, Statista, Wholesale Sugar Suppliers)

Indias sugar sector is showing a steady recovery in SY2026, supported by improved cane availability and stable market conditions. According to the Indian Sugar Mills Associations third advance estimates, gross sugar production was initially projected to increase by 9.4% to 32.4 million metric tonnes, with net production (after diverting 3.1 million metric tonnes toward ethanol) estimated at 29.3 million metric tonnes. However, as per ISMAs latest estimates, gross sugar production is now projected at 31.2 million metric tonnes, with net sugar output revised to 28.2 million metric tonnes. With domestic consumption estimated at 27.7 million metric tonnes and exports at 0.75 million metric tonnes, closing stocks are expected to be slightly below 5 million metric tonnes—equivalent to around two months of consumption—indicating a comfortable supply position. The sectors financial performance remains stable, with operating margins for integrated sugar mills expected to hold steady. Profitability continues to be supported by firm domestic sugar prices. Revenue growth is projected to be moderate, though margin expansion may remain constrained due to higher cane prices and relatively stable ethanol prices.

Policy support continues to play a critical role. The Fair and Remunerative Price (FRP) for sugarcane has been increased to H355 per quintal for a base recovery rate of 10.25%, while Uttar Pradesh has raised the State Advised Price (SAP) to H400 per quintal for early varieties and H390 per quintal for normal varieties.

The industry is entering a new phase as it accelerates ethanol production, positioning itself at the center of Indias renewable energy transition. Blending levels have already reached 19.98% in the initial months of ESY2026, reflecting strong progress toward national targets.

Overall, the Indian sugar industry is evolving into a more diversified and resilient sector, balancing sugar production with bio-energy opportunities and emerging as both an agricultural and energy powerhouse.

(Source: ANI, ISMA, Economic Times)

India sugar Balance Sheet (Provisional)

1 (I) Domestic sugar Balance Sheet

(In lakh tonnes)

S. No. Particulars	2021-22	2022-23	2023-24	2024-25	2025-26 (E)
a Opening Stock as on 1st October**	81.86	70.00	55.65	79.00	50.00
b Gross Sugar Production during Season	389.60	366.15	341.14	296.00	312.00
(Without diversion for ethanol)
c Diversion for ethanol (E) #	32.00	38.00	21.50	35.00	30.00
d Net Production during the Season	357.60	328.15	319.64	261.00	282.00
e Total Availability	439.46	398.15	375.29	340.00	332.00
O_-take
i) Internal Consumption	273.30	278.50	290.00	281.00	277.00
ii) Exports *	110.70	64.00	0.50	9.00	7.50
Total ofitake	384.00	342.50	290.50	290.00	284.50
f Closing Stock as on 30th September	55.46	55.65	84.79	50.00	47.50

* Exports are under O.G.L. and as reported by sugar mills to GoI

**Opening stock of 2022-23 and 2024-25 reconciled with Government data. # Sugar diversion towards ethanol for 2025-26 estimated as per allocations for C-1 * Imports and exports are under O.G.L. and as reported by sugar mills to GoI ** Opening stock of 2022-23 and 2024-25 reconciled with Government data. (Source: ISMA)

Our value chain is built on a foundation of sustainable farming methods that drive efficiency while keeping environmental impact low. What emerges from sugar production is never treated as waste—bagasse, molasses, and press mud are each channelled into new streams of value.

Bagasse fuels our co-generation plants, producing steam and electricity to power operations, with surplus energy supplied to the national grid. Molasses is transformed into ethanol, strengthening Indias renewable biofuel capacity. Press mud, too, is repurposed, reinforcing our circular economy model that ensures resources are fully utilised and greenhouse gas emissions are sharply reduced.

Every link in this chain is connected by a commitment to environmental responsibility, resource efficiency, and economic resilience. This integrated approach secures responsible growth while advancing Indias clean energy ambitions, showing how industrial progress and ecological stewardship can move forward together.

Sugarcane, cultivated mainly in tropical and subtropical regions, is central to sugar and ethanol production but also offers vast potential for diversification through its byproducts. These underutilised fractions can be transformed into valuable resources: Sugarcane trash or straw left in fields after harvest can be used to enrich soil, generate biofuel, or serve as livestock feed.

Ash from bagasse combustion in co-generation plants has applications in construction, soil amendment, and pollution control.

Filter cake from juice clarification can be processed into biogas or natural fertiliser, supporting sustainable agriculture.

Vinasse, the liquid residue from ethanol distillation, contains nutrients suitable for soil enrichment, irrigation, and biogas production.

Biogenic CO2 released during bagasse burning and ethanol fermentation can be captured for beverage carbonation, algae cultivation, or synthetic fuel production.

Green electricity generated by sugar mills can be harnessed for producing green hydrogen, reducing dependence on fossil fuels.

Bagasse-based products are emerging as alternatives to PVC in lightweight industries, especially as restrictions on single-use plastics drive demand for biodegradable materials.

By adopting innovative cascading methods to process these biomass fractions, sugarcane mills can cut disposal costs, boost energy yields, reduce greenhouse gas emissions, and expand their product portfolio. As technologies advance, these opportunities are expected to deliver tangible environmental and economic benefits in the near future.

In Uttar Pradesh, Indias second-largest sugar-producing state, sugar output estimates have been revised downward to 9.1 million tonnes, compared with earlier projections of 9.41 million tonnes and marginally below last seasons 9.3 million tonnes. The decline is primarily attributed to excessive rainfall during the critical crop growth phase, which adversely impacted yields and reduced overall cane availability. In addition, strong demand for sugarcane from jaggery (gur) units has further diverted cane away from sugar mills, tightening supply to the formal processing sector.

In one of the sharpest hikes in recent years, the state government announced a H30 per quintal increase in the State Advised Price (SAP) of sugarcane for the 2025–26 season. This takes the procurement price to H400 per quintal for early-maturing varieties and H390 per quintal for common varieties, up from H360 in the previous season. The last time SAP was raised by a larger margin was in 2021–22, when the price for common varieties increased from H315 to H340 per quintal, and early-maturing varieties were fixed at H350 per quintal.

While the latest increase is a welcome boost for farmers, it is expected to squeeze mill margins, pushing their cost of production from around H41 per kg to nearly H42–43 per kg. As the sugar season runs from October to September, Uttar Pradesh—home to the largest number of private sugar mills in India—faces the challenge of balancing farmer welfare with industry sustainability.

(Source: Business standard)

Indias ethanol sector is witnessing strong structural growth, driven by supportive policies, rising fuel demand, and an increasing focus on clean energy. Valued at US$ 8.3 billion in 2024, the market is projected to reach US$ 16.1 billion by 2035, growing at a CAGR of 6.2%. This growth is anchored by the Ethanol Blended Petrol programme, ongoing technological advancements, and a gradual shift toward sustainable fuel alternatives.

A milestone is the nationwide rollout of E20 petrol from April 2026, aimed at reducing crude oil imports, lowering emissions, and improving farmer incomes through higher feedstock demand. Blending levels have risen sharply from about 12% in 2022-23 to nearly 20% in 2025-26, generating foreign exchange savings of over H1.40 lakh crore since 2014-15. Early ESY 2026 data shows blending at 19.98%, supported by 239 crore litres of ethanol, reflecting sustained momentum.

Operationally, the sector continues to scale. In ESY 2024-25, Oil Marketing Companies procured 904.84 crore litres against a contracted 1131.70 crore litres. For ESY 2025-26, bids for around 1050 crore litres attracted offers exceeding 1776 crore litres, with 1048 crore litres accepted. Indias production capacity has expanded to about 2,000 crore litres, surpassing the estimated requirement of 1,300 to 1,400 crore litres for 20% blending, creating surplus capacity for higher blends such as E22, E25, and E30.

At the same time, the sector is diversifying its feedstock base. Grain-based ethanol from maize and rice is gaining share alongside sugarcane-based sources, improving supply resilience. Policy support through the National Policy on Biofuels, interest subvention, feedstock expansion, lower GST, and long-term ofitake agreements has accelerated capacity creation and ecosystem development. Beyond blending, ethanol is delivering wider economic and environmental benefits, including higher farmer incomes, improved liquidity for mills and distilleries, lower emissions, and foreign exchange savings. New applications such as ethanol-based cooking fuel are also emerging, helping reduce LPG dependence while improving air quality.

However, rising surplus capacity is shifting the sectors focus toward demand creation beyond petrol blending. Policymakers and industry are exploring alternative uses such as ethanol-based cooking stoves and blending with diesel for generators. Pilot projects are underway, and early trials of ethanol-blended diesel buses by the Karnataka State Road Transport Corporation are assessing feasibility.

Automakers are preparing flex fuel vehicle platforms as a scalable solution to absorb excess supply, supported by measures like road tax waivers in select states. Wider adoption, however, will depend on clearer policy direction, pricing alignment, and infrastructure readiness. While lower ethanol prices could stimulate demand, they may impact distillery margins.

Overall, the sector is evolving beyond conventional fuel blending, with diversified applications, expanding capacity, and strong policy backing positioning it as a key contributor to Indias energy security, sustainability, and rural economic development.

(Source: Market research future, NDTV, Bio Energy Times, Economic Times)

Ethanol realisations per litre (H)

Ethanol type	ESY22	ESY23	ESY24	ESY25	ESY26
Direct ethanol	63.45	65.61	65.61	65.61	65.61
C-heavy ethanol	46.66	49.41	56.28	57.97	57.97
B-heavy ethanol	59.08	60.73	60.73	60.73	60.73

Bioenergy continues to play a significant role in Indias renewable energy landscape, supported by the countrys abundant biomass resources and growing demand for sustainable energy solutions. India generates nearly 450–500 million tonnes of biomass annually, while agricultural residue availability is estimated at around 750 million tonnes, including wheat straw, rice straw, sugarcane bagasse and other crop waste. Wheat residue contributes nearly 25% of the total, while rice residue accounts for about 24%, providing a strong feedstock base for bioenergy production. As of March 2025, Indias bioenergy installed capacity stood at approximately 11.6 GW, forming an important component of the countrys renewable energy mix. Installed capacity increased from 10.53 GW in 2020-21 to 11.58 GW in 2024-25, registering a compound annual growth rate (CAGR) of 2.24%. Within this, bagasse-based cogeneration remains the dominant segment, complemented by biomass power and waste-to-energy (WtE) projects. Over the last five years, India added around 868 MW of biomass power and cogeneration capacity along with 693 MW of waste-to-energy capacity, reflecting sustained policy support for the sector.

Segment-wise, biomass power and bagasse cogeneration capacity increased from 9.37 GW in 2020-21 to 9.82 GW in 2024-25, while non-bagasse biomass cogeneration rose from 0.77 GW to 0.92 GW during the same period. Waste-to-energy capacity has emerged as the fastest-growing segment, nearly doubling from 0.17 GW in 2020-21 to 0.31 GW in 2024-25, supported by stronger policy emphasis on converting municipal and agricultural waste into energy while reducing landfill dependence and improving urban waste management.

Looking ahead, Indias bioenergy installed capacity is projected to reach around 15.5 GW by 2031-32, driven by stronger policy support, increasing agricultural residue availability and the continued expansion of waste-to-energy projects. The sector is also expected to play a strategic role in supporting Indias rapidly growing energy markets. According to a report by the International Energy Agency (IEA), robust policy frameworks are accelerating the development of ethanol and compressed biogas (CBG) while creating new opportunities for biodiesel and sustainable aviation fuels (SAF). These fuels can strengthen energy security by reducing dependence on imported fuels, support economic development and job creation in rural areas, and contribute to the countrys emissions reduction targets. Indias extensive availability of agricultural residues and organic waste further strengthens the foundation for modern bioenergy production.

Indias ethanol industry has emerged as one of the countrys most successful policy-driven energy initiatives. Since the launch of the National Policy on Biofuels in 2018, coordinated policies across supply, demand, innovation and financing have enabled annual ethanol consumption to rise from less than 2 billion litres in 2018 to over 11 billion litres today, positioning India as the fourth-largest producer of liquid biofuels globally.

The compressed biogas (CBG) sector has also gained momentum, supported by more than 11 national policies introduced since 2018. These initiatives have led to the establishment of around 170 operational CBG plants, with nearly 300 projects currently under development. Investor interest is also increasing in sustainable aviation fuels and other advanced biofuels, particularly as the aviation sector seeks low-emission fuel alternatives. According to the IEAs baseline outlook, liquid and gaseous biofuel consumption in India could grow by more than 50% by 2030, with ethanol and compressed biogas accounting for the largest share. Under an accelerated scenario supported by

stronger policies, improved feedstock access and expanded supply chains, biofuel consumption could more than double by 2030, representing nearly a sixfold increase compared with 2020 levels.

The broader Indian biomass market is also expected to expand steadily. The market was valued at approximately US$ 2,206.2 million in 2025 and is projected to reach US$ 3,901.3 million by 2034, registering a compound annual growth rate (CAGR) of 6.34% during 2026–2034. Rising energy demand, supportive government policies, technological advancements and growing environmental awareness are expected to drive continued growth in Indias bioenergy ecosystem.

(Source: IBEF, Research and markets, IMARC, Energetica India, Pib-press release)

Rising domestic consumption: By 2026, India continues to be the worlds largest consumer and second-largest producer of sugar, accounting for about 15% of global consumption and nearly 20% of global production. Gross sugar output for the 2025–26 sugar season is estimated at 31.2 million tonnes. Rising urbanisation, evolving dietary habits, and strong festival demand are expected to keep consumption on an upward trajectory.

Export demand: Out of 2 million tons of sugar export allowed by Government of India, over 200,000 tonnes of sugar has been exported by February in the current 2025–26 marketing year, with the United Arab Emirates emerging as the leading destination. Rising demand in key markets such as Indonesia, Bangladesh, and the Middle East is opening up fresh export opportunities. These prospects are further supported by the governments export quota allocations, which is expected to give a significant boost to overall sugar exports.

Ethanol blending programme: The ethanol blending programme has emerged as a true game changer for Indias sugar sector, directly benefiting over 5 crore farmers with more than H1.18 lakh crore transferred to them. According to ISMA, the integration of ethanol with petrol has strengthened the financial health of sugar mills, enabling timely payments to farmers and easing the burden of excess sugar inventories. By diverting surplus sugarcane into ethanol production, mills have been able to stabilise sugar prices while improving profitability. This diversification has not only protected farmer incomes but also reinforced price stability across the industry, positioning ethanol as a cornerstone of both agricultural resilience and energy transition.

Health driven demand: The global low-GI sugar market is set for rapid expansion, valued at US$ 0.12 billion in 2026 and projected to reach US$ 0.36 billion by 2035, growing at a CAGR of 13.8%. This trend reflects rising health consciousness worldwide and is mirrored in India, where consumer preferences are shifting toward organic sugar, jaggery, low-GI sugar, and sugar-free substitutes. At the same time, premiumisation is creating new revenue streams, with specialty sugars increasingly demanded in bakery, confectionery, and beverage applications. The rise of functional foods and nutraceuticals—such as fortified jaggery and mineral-rich cane sugar— further strengthens opportunities for diversification.

Boost to rural economy: The Government of India has approved an increase in the Fair and Remunerative Price (FRP) of sugarcane for the 2025–26 season to H355 per quintal, representing a 4.41% rise over the previous seasons rate. The decision, is expected to benefit nearly 5 crore sugarcane farmers and around 5 lakh workers employed in the sugar sector.

(Source: ISMA, Economic times, Business research, PIB: Press release)

Participative management approach: Dwarikesh follows a participative management philosophy that encourages teamwork, shared responsibility and proactive contribution at every level.

Driving continuous improvement: The organisation promotes a culture focused on ongoing improvement to strengthen customer orientation and enhance departmental performance.

Merit-driven recruitment: Hiring practices are based purely on merit and capability, ensuring fairness and equal opportunity without discrimination.

Structured performance feedback: Periodic performance reviews help assess employee strengths and development needs, enabling constructive feedback and professional growth.

Graduate Engineering Trainee (GET) Programme: The Company runs a structured GET programme to

Internal Control Systems and Their Adequacy

Dwarikesh Sugar Industries Limited maintains a robust internal control framework aimed at safeguarding assets, improving operational

Cautionary Statement

Statements in the Management Discussion and Analysis relating to projections, estimates and develop young engineering talent and prepare them for leadership roles within the organisation.

Lean organisational structure: Dwarikesh maintains a streamlined organisational structure designed to enable agility, sharper focus and quicker decision-making.

Comprehensive induction programmes: Newly recruited employees undergo detailed induction and orientation sessions to familiarise them with the Companys vision, culture and operational practices.

Encouraging innovation: Employees are encouraged to contribute innovative ideas for organisational improvement, with meaningful contributions recognised and rewarded to foster a dynamic and collaborative work environment.

Key initiatives

DSIL Trainee Scheme: Introduced to build long-term talent, the scheme

e_ciency and strengthening financial discipline. The system enables effective monitoring of operations, liquidity and performance while ensuring that transactions are properly recorded and assets are adequately protected.

expectations have been made in good faith. Actual results may differ due to risks, uncertainties and assumptions that may not fully materialise. Market data and information develops young professionals early in their careers and aligns them with the Companys culture, capabilities and performance expectations.

Regular performance appraisal: Quarterly and half-yearly evaluations conducted through HR software enable systematic performance monitoring and support individual development planning.

Internal talent mobility: The Company prioritises internal recruitment for open positions, encouraging career progression while retaining institutional knowledge. Policy audits: Periodic reviews of internal policies and procedures help maintain regulatory compliance and strengthen operational efficiency.

O_-season training: Skill development programmes conducted during the off-season enhance employee capabilities and improve operational readiness.

Regular operational reviews and recommendations from auditors help the Company implement timely corrective actions wherever necessary.

have been sourced from various published and unpublished reports; however, their accuracy, reliability and completeness cannot be fully assured.