Godavari Biorefineries Ltd Management Discussions

Global economic review

Overview

Global economic growth eased slightly from 3.3% in 2023 to an estimated 3.2% in 2024, weighed down by weaker manufacturing in Europe and parts of Asia, supply chain disruptions and subdued consumer sentiment. The service sector, however, showed resilience. The growth in advanced economies held steady at 1.7%, while emerging and developing economies slowed to 4.2% (from 4.4% in 2023).

On a positive note, global inflation declined from 6.1% in 2023 to 4.5% in 2024 and is projected to ease further to 3.5% in 2025 and 3.2% in 2026, supported by fading economic shocks, improved labour supply and effective monetary policies.

Europe is rapidly transitioning from fossil-based to biobased chemicals in line with the EU Green Deal and Fit-for-55 targets. The European bio-based products market generates over €57 Bn annually and supports 300,000+ jobs. Biobased chemicals

already make up nearly 12% of the EU chemical sector, projected to reach 20-25% by 2030.

The key growth areas include bioethanol, bioplastics and biopolymers, with Europe producing around 1.2 Mn tonnes of bioplastics per year, expected to double by 2027. Shifting to renewable feedstocks can cut lifecycle chemical emissions by 50-80%, helping meet Europes decarbonisation and energy security goals.

Regional growth (%)	2024	2023
World output	3.2	3.3
Advanced economies	1.7	1.7
Emerging and developing economies	4.2	4.4

(Source: IMF, KPMG, Press Information Bureau, BBC, India Today)

Wars and conflicts: Geopolitical tensions, especially the Russia- Ukraine war, sharply affected global maize markets. Ukraine is a major maize exporter and disruptions caused futures to rise by nearly 19% between February and April 2022. At the same time, fertilizer costs crucial for sugarcane and maize spiked

globally. Prices rose 80% in 2021 and another 30% in early 2022, with UK farmers alone incurring an extra ?1.45 Bn (€1.7 Bn) in fertilizer costs since the war began. This input price volatility directly reduced profitability for growers and raises costs across the supply chain.

Tariffs and trade policies:

Government policies play a decisive role in shaping the sugar and maize sectors. In 2023, India, one of the worlds top sugar producers restricted sugar exports indefinitely to safeguard domestic supplies and divert more cane toward ethanol blending. For the 2022-23 season,

the government capped exports at 6 Mn metric tonnes (MMT), but actual shipments still touched 7 MMT.

In 2024-25, export permissions dropped further to just 1 MMT, far below the usual 8-9 MMT. These policy swings created significant uncertainty for global buyers, amplifying volatility in food and biofuel markets. For maize, similar risks arose from tariff wars such as U.S.-China trade disputes that would reshape trade flows and distort farmer incentives.

Climate change and weather extremes: Changing climate patterns are perhaps the most destabilizing factor for both crops. The 2023 El Nino triggered severe droughts in India and Thailand, driving a 55%

Indian economic review

Overview

The Indian economy grew 6.5% in 2024-25, down from a revised 9.2% in 2023-24, marking a four-year low due to weaker manufacturing and lower net investments. Despite this, India remained the worlds fourth- largest economy, with nominal GDP rising to H330.68 Trn and per capita income to H2,35,108.

surge in sugar prices in just two months, while the FAOs sugar price index climbed 26.7% that year. For maize, prolonged drought in South America (2023-24)—the regions worst in 40 years—reduced yields and tightened global supplies. These events show how climate extremes rapidly translate into higher food prices, with cascading effects on trade balances, farmer income and food security. Conversely, improved rainfall in India is now expected to lift sugar production by 20% in 2025, reaching 35 MMT and temporarily easing supply pressures.

Outlook: The global economy has entered a period of uncertainty following the imposition of tariffs of products imported into the USA

The rupee depreciated 2.1% against the US dollar to close at H8547, though March 2025 saw its strongest monthly gain since 2018. Inflation moderated, with CPI averaging 4.63%, the lowest since the pandemic on softer food and commodity prices. Foreign exchange reserves touched US$ 676 Bn, while rating upgrades continued to outpace downgrades on the back

and some countries announcing reciprocal tariffs on US exports to their countries. This is likely to stagger global economic growth, the full outcome of which cannot be currently estimated. This risk is supplemented by risks related to conflicts, geopolitical tensions, trade restrictions and climate risks. In view of this, World Bank projected global economic growth at 2.7% for 2025 and 2026, factoring the various economic uncertainties.

(Source: IMF, United Nations, Farmdoc Daily, Federal Reserve Bank of St. Louis, Euronews Green, USDA Foreign Agricultural Service, Reuters, Quartz, Associated Press, European Commission (2022, Bioeconomy Progress Report), European Bioplastics Association (2023), EU Fit-for-55 Policy Framework)

of strong growth, rural demand, infrastructure investment and low corporate leverage.

Gross foreign direct investment rose 13.6% to US$ 81 Bn, the fastest growth since 2019-20, though inflows slowed in the final quarter amid uncertainty from Donald Trumps election and US investment policies.

Growth of the Indian economy

	FY22	FY23	FY24	FY25
Real GDP growth (%)	8.7	7.2	9.2	6.5
(Source: MoSPI, Financial Express)

Growth of the Indian economy quarter by quarter, 2024-25

	Q1FY25	Q2 FY25	Q3 FY25	Q4 FY25
Real GDP growth (%)	6.5	5.6	6.2	74

(Source: The Hindu, National Statistics Office)

India achieved 20% ethanol blending (E20) in petrol by 2025, five years ahead of target (up from 1.53% in 2014). Average ethanol cost in 2024-25 was H71.32/litre, with molasses-based ethanol at H57.97/ litre. Blending reached 19.6%, supported by Gujarats H4,300 Crore investment in ethanol and CBG plants to boost supply, farmer incomes and the circular economy.

Farmer incomes remain central to stability. While PM-KISAN and subsidies provide support, lasting security requires crop diversification, market access, price- risk management, climate-resilient practices and integration with biofuel value chains.

Climate change threatens the sugar sector that sustains 50+ Mn farmers. Rising temperatures, erratic

rainfall and pests could cut yields by 7-15%, raise irrigation needs and shift growing zones. A 10% output fall could raise sugar prices 15-20%, tightening ethanol supply. Adaptation via drought-tolerant varieties, microirrigation, diversified feedstock and crop insurance is critical.

From 2026, the EUs CBAM will add carbon costs of up to 25% on Indian steel and aluminium exports,

impacting 0.2% of GDP Staying competitive demands low-carbon production and strong emissions accounting.

India must decouple growth from emissions by scaling renewables, low-carbon industry and climate- resilient agriculture, while strengthening carbon accounting for trade. Rapid solar and wind additions, domestic manufacturing and falling battery costs are driving progress, but challenges persist in grid flexibility, storage scale-up, financing, land and water use and coal transition risks. With energy demand rising, coal remains significant, though diversification through gas, storage and reserves is underway. Priorities include reducing import dependence, expanding clean energy manufacturing, building storage and transmission and ensuring reliable capacity to meet future needs.

Outlook: India is expected to remain the fastest-growing major economy. Initial Reserve Bank of India estimates have forecast Indias GDP growth downwards from 6.7% to 6.5% based on risks arising from US tariff levies on India and other countries. The following are some key growth catalysts for India in 2025-26.

Tariff-based competitiveness: India identified at least 10 sectors such as apparel and clothing accessories, chemicals, plastics and rubber where the US high tariffs give New

Delhi a competitive advantage in the American market over other suppliers. While India faced a 10% tariff after the US suspended the 26% additional duties for 90 days, the levy reduced from 145% to 30% on China, the biggest exporter to the US. Chinas share of apparel imports into the US was 25%, compared with Indias 3.8%, a large opportunity to address differential (Source: Niti Aayog).

Union Budget 2025-26: The Union Budget 2025-26 laid a strong foundation for Indias economic trajectory, emphasizing agriculture, MSMEs, investment and exports as the four primary growth engines.

With a fiscal deficit target of 4.4% of GDP, the government reinforced fiscal prudence while allocating H11.21 Lakh Crore for capital expenditure (3.1% of GDP) to drive infrastructure development. The February 2025 Budget marked a shift in approach, with the government proposing substantial personal tax cuts. Effective April 1, 2025, individuals earning up to H12 Lakh annually will be fully exempt from income tax. Economists estimate that the resulting H1 Lakh Crore in tax savings could boost consumption by H3-3.5 Lakh Crore, potentially increasing the nominal private final consumption Expenditure (PFCE) by 1.5-2% of its current H200 Lakh Crore.

Monsoons: The India Meteorological Department predicted an above

Global bio-based chemicals industry overview

The global bio-based chemicals market is expanding rapidly, driven by demand for sustainable feedstocks, clean-label products and stricter chemical regulations. Consumers increasingly prefer eco-friendly, ethical options, especially in personal care. Integrated biorefineries boost supply chain efficiency, while supportive policies in the U.S. and India accelerate adoption. As climate concerns grow, bio-based chemicals offtake is expected to grow.

The growing environmental consciousness among consumers, corporations and governments has significantly increased the demand for sustainable chemical solutions. This shift is evident across a wide range of industries.

The global bio-based chemicals market size was US$ 73.16 Bn in 2023 and is expected to grow from US$ 99.86 Bn in 2024 to US$ 207.95 Bn in 2032 at a CAGR of 9.6% during the estimated period (2024-2032).

normal monsoon in 2025. This augurs well for the countrys farm sector and a moderated food inflation outlook.

Easing inflation: Indias consumer price index-based retail inflation in March 2025 eased to 3.34%, the lowest since August 2019, raising hopes of further repo rate cuts by the Reserve Bank of India.

Deeper rate cuts: In its February 2025 meeting, the Monetary Policy Committee (MPC) reduced policy rates by 25 basis points, reducing it to 6% in its first meeting of 202526. Besides, Indias CPI inflation is forecasted at 4% for the fiscal year 2025-26.

Lifting credit restrictions: In

November 2023, the RBI increased risk weights on bank loans to retail borrowers and NBFCs, significantly tightening credit availability. This led to a sharp slowdown in retail credit growth from 20-30% to 9-13% between September 2023 and 2024. Under its new leadership, the RBI has prioritised restoring credit flow. Recent policy shifts have removed restrictions on consumer credit, postponed higher liquidity requirements for banks and are expected to rejuvenate retail lending.

(Source: CNBC, Press Information Bureau, Business Standard, Economic Times, World Gold Council, Indian Express, Ministry of External Affairs, Times of India, Business Today, Hindustan Times, Statistics Times)

Europe dominated the bio-based chemicals market with a market share of 61.15% in 2023. The biobased chemicals market size in the U.S. is projected to grow significantly, reaching an estimated value of US$ 40.9 Bn by 2032, driven by the shifting preference of consumers towards bio-based products and the changing policies regarding environment protection.

(Source: Globe News Wire, Fortune Business Insights)

Indian bio-based chemicals industry overview

The Indian bio-based chemicals industry is evolving into a dynamic, high-potential segment within the broader chemical landscape.

Its growth is being fueled by the increasing demand for sustainable and circular alternatives to fossil- based chemicals, coupled with a growing emphasis on environmental responsibility across industries.

As global supply chains move toward low-carbon pathways,

Indias bio-based sector is gaining strategic relevance not just as an environmental imperative, but also as an economic opportunity.

This industry primarily focuses on producing essential chemical derivatives such as bio-propylene, bio-ethylene oxide and biopolymers, from renewable biological feedstocks, including agricultural residues, industrial biomass, sugarcane by-products and starch- rich crops. These feedstocks offer a viable, lower-emission pathway for manufacturing critical inputs used in plastics, solvents, detergents, packaging, textiles and personal care products.

Indias large and diverse agricultural base provides a strong foundation for biomass availability, while policy initiatives like the ban on single-use plastics, the National Bio-Energy Mission and the promotion of circular economy frameworks are accelerating market readiness. The government support for indigenous manufacturing under initiatives like Make in India and PLI schemes is encouraging domestic production, reducing reliance on imports of petrochemical intermediates and enhancing long-term supply chain resilience.

The sector is also benefiting from active collaboration between industry, academia and public R&D institutions, fostering innovation in enzyme technologies, biomass conversion and scalable fermentation processes. These developments are improving commercial viability and paving the way for bio-refinery models that can serve multiple downstream sectors with minimal environmental footprint.

Indian ethanol industry overview

Indias ethanol blending program advanced rapidly and achieved 20% (E20) in 2025. Ethanol distillery capacity has expanded to 1,600 Crore litres, expected to reach 1,700 Crore litres, with 400 Crore litres from sugar-based feedstock and 700 Crore litres from grains. For 2024-25 sugar season, the sugarcane FRP was fixed at H340 per quintal. The government hiked the sugarcane FRP by 4.41% to H355 per quintal for the 2025-26 sugar season.

As the worlds third-largest energy consumer, India remains heavily dependent on oil imports, but ethanol offers a viable alternative by cutting fossil fuel use, reducing carbon emissions and improving energy security. It also creates rural income opportunities by adding value to sugarcane and grain production.

Despite beginning in 2001, ethanol blending has accelerated only in

With rising investor interest, robust policy tailwinds and growing demand for low-carbon materials, the Indian bio-based chemicals industry is well- positioned to become a cornerstone of the countrys green manufacturing ecosystem over the next decade.

India specialty chemicals market, which includes bio-based chemicals, the market size was valued at US$ 64.5 Bn in 2024 and is anticipated to reach US$ 92.6 Bn by 2033, reflecting a CAGR of 3.80% from 2025 to 2033.

These projections underscore a growing shift towards sustainable and environmentally friendly chemical solutions in India, driven by factors such as rapid industrialisation, favorable government initiatives like the Make in India programme and increasing environmental awareness among consumers and industries.

(Source: Business Market Insights, The Insight Partner, IMARC)

recent years through policy reforms, making it a cornerstone of Indias sustainable energy strategy. With 98% of road transport fuel still derived from fossil sources, scaling up ethanol adoption is critical to meeting rising energy demand while lowering environmental impact and foreign exchange outflows.

(Source: Economic Times, Insights on India, Pib)

Global sugar industry overview

The rising urban population, changing dietary habits towards convenience foods and the expansion of the food service industry are boosting sugar demand, driven by the popularity of sweet and indulgent products. At the same time, the sugar industrys growth in chemicals is fuelled by the demand for bio-based products, surplus sugar diversion to ethanol,

government support and the rise of green alternatives like bioplastics and specialty chemicals. Growing use of sugar in cosmetics for natural exfoliation and hydration is emerging as a new growth driver for the sugar industry.

In 2024, the global sugar market was valued at 194.9 Mn tonnes and is expected to reach 223.1 Mn tonnes by 2033, at a compound annual

growth rate of 1.36% from 2025 to 2033. Brazil remained the dominant player in the market, accounting for a substantial 22-25% share in 2024. The sectors growth was driven by increasing consumer demand for processed food products, expanding applications in the pharmaceutical industry and widespread availability through distribution channels.

(Source IMARC)

Indian sugar industry overview

India, the worlds largest sugar consumer, produced 25.49 Mn tonnes of sugar by April 2024-25, an 18% decline from last year. Despite reduced acreage (5.37 Mn hectares vs. 5.74 Mn hectares), improved yields are expected to support 439.93 Mn tonnes of cane output. Sugar consumption is projected at 28 Mn tonnes, lower than last year, with about 3.5-4 Mn tonnes diverted to ethanol.

The Indian Sugar and Bio-Energy Manufacturers Association (ISMA) projects net sugar production at 26.4 Mn tonnes for 2024-25, with closing stocks of 5.4 Mn tonnes, ensuring sufficient availability. Maharashtra is set to see the steepest drop (27%), while Uttar Pradesh and Karnataka are expected to record declines of 13% and 23%, respectively.

As of March 2025, ISMA reported 23.3 Mn tonnes of production with 228 mills in operation. Uttar Pradesh may extend its crushing season into April, while Maharashtra and Karnataka face reduced yields, though Karnataka may resume a special crushing season mid-2025.

(Source: Chem Analyst, Statista, Mordor Intelligence, New Indian Express)

Performance of major sugar growing states

Maharashtra: Sugar production declined to 8.07 Mn tonnes as of mid-April 2025, down from 10.94 Mn tonnes in the previous season. The decrease is attributed to reduced sugarcane yields and early closure of mills due to lower cane availability.

Uttar Pradesh: Production slightly decreased to 9.11 Mn tonnes from 10.18 Mn tonnes in the 2023-24 season. Despite this, Uttar Pradesh experienced the smallest decline among major producing states, owing to improved plant cane recovery and yield.

Karnataka: Sugar output fell to 4.04 Mn tonnes, compared to 5.06 Mn tonnes in the previous season. The decline is due to lower sugarcane yields and early cessation of milling operations.

(Source: Statista, Money Control)

Sugar exports and imports

On January 20, 2025, India approved the export of up to 1 Mn tonnes of sugar for the 2024-25 marketing year, offering a boost to local sugar prices and enhancing liquidity.

India exported 2,87,204 tonnes of sugar by early April in the ongoing 2024-25 marketing year. This move

is expected to improve realisations, supporting 50 Mn farming families and 5,00,000 workers, while ensuring timely payments for sugarcane.

As the worlds second-largest sugar exporter from 2018-19 to

2022-23, India played a crucial role

in supplying markets like Indonesia, Bangladesh and UAE. Despite no exports in the 2023-24 season, the limited export quota for 2024-25, coupled with strong production prospects, signals positive market conditions.

(Source: Chinimandi, Reuters)

Government initiatives

The Government of India has launched a series of initiatives reflecting a strategic shift toward promoting integrated and diversified production models across key sectors. This transition is supported by financial incentives, streamlined regulations and focused infrastructure development, aimed at building a more sustainable, innovative and resilient economy.

Biofuel scheme 2025: Madhya Pradesh has launched a biofuel scheme to boost economic prosperity and job creation, focusing on green energy production and the

effective utilisation of agricultural waste. This scheme includes incentives for biofuel manufacturing units and bio-energy plants.

National bio-energy mission:

The government is enhancing this mission to support biofuel manufacturers with financial incentives and regulatory support, encouraging public-private partnerships for advanced biofuel.

Ethanol blending program: India has successfully achieved its 20% ethanol blending target in petrol ahead of schedule, marking a major

milestone in its energy transition.

This achievement has been driven by a diversified feedstock strategy, including sugarcane-based molasses, grain-based ethanol (such as maize and broken rice) and surplus food grains. The move has significantly reduced crude oil imports, saved H1.2 Trn in foreign exchange and increased farmer incomes. As ethanol supply becomes increasingly grain-based, the initiative is seeing widespread adoption across fuel outlets nationwide, setting the stage for the next target of 30% blending by 2030.

Financial incentives: Attractive financial incentives are being offered to sugar mills producing ethanol from sugarcane and maize, along with increased funding for second- generation ethanol plants using agricultural waste.

Regulatory support: Easier licensing procedures and reduced

compliance burdens for small-scale ethanol manufacturers are part of the governments strategy to boost ethanol production.

Sugar export policy: The

government has allowed the export of 1 Mn tonnes of sugar in the 202425 season to ensure price stability and support the sugar sector.

BioE3 policy: The government introduced the BioE3 policy aimed at fostering high-performance biomanufacturing. The policy is designed to supplement, rather than replace, traditional supply methods with biotechnological solutions to meet the demands of a developed India by 2047.

Growth drivers

Growing beverage consumption:

Sugar plays a crucial role in enhancing the taste, texture and shelf-life of various beverages, including cocktails, energy drinks and shakes. A 2022 survey found that 45% of Indians prefer high-flavour cocktails, while daily sugar intake in tea and coffee continues to drive market growth.

Rising demand in personal care:

The global beauty and personal care market reached US$ 677.19 Bn in 2025, fueling demand for sugar in scrubs and skincare. Sugars natural exfoliating and hydrating properties make it a preferred ingredient in

cosmetics, contributing to industry expansion.

Expanding distribution channels: Sugars affordability and availability across multiple retail and online platforms are driving its widespread adoption. In the U.S., sugar consumption exceeds recommended daily limits by 300%, reflecting its essential role in consumer diets.

Rising biofuel demand: Indias rapid urbanisation and efforts to curb air pollution are boosting biofuel consumption. The International Energy Agency projects that India

could triple its biofuel production by addressing ethanol blend limitations.

Agricultures role in ethanol production: Ethanol offers farmers new revenue streams, with corn production expected to rise by 10 Mn metric tonnes in five years. Indias ethanol output currently stands at 2 Mn metric tonnes, with plans for significant expansion.

Sustainable energy goals: The

government targets 20% ethanol blending by 2025-26, reducing oil imports and strengthening energy security. Indias leadership in the Global Biofuels Alliance highlights its commitment to bioethanol. growth.

Company overview

Godavari Biorefineries, a leading bio-based chemical manufacturer in India, operates the countrys largest integrated bio-refinery. The Company is among Indias leading ethanol producer, one of the largest manufacturers of 3-Methyl-3- penten-2-one (MPO)manufacturer and the sole producer of bioethyl acetate in India. Its portfolio includes bio-based chemicals, sugar, ethanol and power, serving

industries like personal care, cosmetics, food, fragrance, fuel, paints, agrochemicals, mining, pharmaceuticals and other industrial applications. The company is adding a dual and fungible capacity in grain- based ethanol production.

The Sameerwadi facility, with a crushing capacity of 18,000 TCD (expandable to 25,000 TCD) and an ethanol capacity of 570 KLPD (targeting 1,000 KLPD), supporting

Indias biofuel initiatives. Committed to sustainability, the Company minimizes waste and follows ecofriendly practices. With a global presence over the countries and offices in the Netherlands and the U.S., the company adheres to global quality standards. Backed by the Somaiya Group, it continues to drive innovation and sustainable growth.

Financial overview

Analysis of the statement of Profit & Loss

Revenues: Revenues are increasing. Total income from operations stood at H1,886.91 Crore in 2024-25 as compared to H1,701.06 Crore in

2023-24 reflecting an increase of 11%.

Export: Chemical business revenue contributes H542.22 Crore, 29% of total revenues. Exports of bio-based chemicals are 23% of total bio based chemical business.

Expenses: Total expenses increased by 12% to H1,888.45 Crore in 202425 from H1,688.62 Crore in 202324. Raw material* costs account

for a 73% share of the companys total income as compared to 69% in 2023-24. Employee expenses accounted for a 6.64% share of the companys Total Income and increased by 6.07% to H125.35 Crore in 2024-25 from H118.18 Crore in 2023-24.

* Raw material cost represents the aggregate of cost of materials consumed, purchases of stock-in-trade and changes in inventories of finished goods, finished goods in transit, stock- in-trade and work-in-process.

Analysis of the Balance Sheet Sources of funds: The capital employed in the company increased 13% to H1,030.94 Crore as on March 31, 2025 from H914.31 Crore as on March 31, 2024 owing to equity

infusion by way of IPO. The net worth of the company increased H781.96 Crore as on March 31, 2025 from H500.68 Crore as on March 31, 2024 owing to equity infusion by way of IPO. The companys equity share capital comprised 5,11,75,977 equity shares of H10 each.

Long-term debt of the company reduced to H239.74 Crore as on March 31, 2025 from H355.48 Crore as on March 31, 2024 post scheduled repayment and prepayment of H291.24 Crore. The long-term debt- equity ratio of the company stood at 0.44% in 2024-25 compared to 1.37% in 2023-24.

Finance costs of the company decreased by -5.00% to H71.79 Crore in 2024-25 from H75.56 Crore in

2023- 24 on account of repayment of term loan

Applications of funds

Capex incurred of H71.65 Crore in

2024- 25 as compared to H55.31 Crore in 2023-24.

Working capital management

Current assets of the company decreased by -4.93% to H1,023.26

Crore as on March 31, 2025 from H1,076.32 Crore as on March 31, 2024. The current ratios of the company stood at 1.13 at the close of 2024-25 compared to 0.95 at the close of 2023-24.

Inventories including raw materials, work-in-progress and finished goods among others decreased by -7.82% to H718.27 Crore as on March 31, 2025 from H779.18 Crore as on March 31, 2024. The inventory turnover ratio stood at 2.25 in

2024-25 as compared to 2.20 in 2023-24.

Trade receivables decreased by -25.86% to H141.29 Crore as on March 31, 2025 from H190.58 Crore as on March 31, 2024. Trade receivable turnover ratio stood at 11.27 as on March 31, 2025 as compared to 8.45 as on March 31, 2024.

Key ratios

Particulars			2024-25			2023-24
Debt-equity ratio (x)				0.91		2.55
Debtors turnover ratio (x)				11.27		8.45
Inventory turnover ratio (x)				2.25		2.20
Interest coverage ratio (x)				0.94		1.31
Current ratio (x)				1.16		0.97
Operating profit margin (%)				3.76		5.22
Net profit ratio				-0.00		0.01

Segment wise financial an< alysis

Particulars		2024-25
	Revenues	EBITDA	% Share of total revenui	e	EBITDA	% Share of total revenue
Sugar	678.96	39.7	35.98%	565.74	39.11	33.26%
Cogeneration	50.91	9.24	2.70%	42.82	16.29	2.52%
Bio based Chemicals	543.22	37.83	28.79%	506.41	16.86	29.77%
Distillery	584.98	32.69	31.00%	561.85	71.32	33.03%
Unallocated	28.84	0.85	1.53%	24.23	4.36	1.42%
Total	1,886.91	120.31	100.00%	1,701.06	147.93	100.00%

Risk management

Supplier concentration risk:

Dependence on a few suppliers for key raw materials (excluding sugarcane) could disrupt operations if supply fails.

Mitigation: Diversifying suppliers, building material reserves and securing long-term relationship help ensure supply stability.

High raw material cost risk: Material consumption costs form the bulk of expenses. Price increases may erode profitability.

Mitigation: Hedging or forward contracts, optimizing procurement,

reducing waste and periodically adjusting product pricing can help manage material cost fluctuations.

Customer concentration risk:

Revenue depends on a few key customers. Their loss or reduced demand could affect performance.

Mitigation: Expanding the customer base, strengthening relationships through value-added services and proactively monitoring customers credit and financial health can mitigate customer concentration risks.

Product concentration risk:

Reliance on a limited product portfolio can expose revenue to fluctuations in market demand.

Mitigation: Diversifying product offerings, investing in R&D for innovation and regularly assessing market trends and customer needs can reduce product concentration risks.

Ethanol policy dependency risk:

Revenue from ethanol sales is tied to government policy under the Ethanol blending Program.

Mitigation: Monitoring the regulatory landscape, diversifying into alternative feedstocks such as maize and grain, expanding product applications for ethanol blending and tapping into broader end-use markets like pharmaceuticals and industrial sectors can help mitigate risks related to ethanol policy exposure.

Quality certification risk: Loss of certifications could damage brand reputation and impact market access.

Mitigation: Implementing robust quality management systems, conducting regular audits and training and ensuring strict compliance with certification standards can mitigate quality certification risks.

R&D and innovation risk: Business growth depends on successful R&D; failure to launch new products may hamper competitiveness.

Mitigation: Allocating dedicated resources for R&D, collaborating

with research institutions and implementing agile product development strategies can reduce innovation risks.

Competitive pressure risk: Intense competition may lead to pricing pressure and market share loss.

Mitigation: Differentiating through quality, sustainability and customer service, improving operational efficiency and investing in branding and digital marketing can mitigate competitive pressure.

Human resources

Godavari Biorefineries recognizes that its workforce plays a crucial role in maintaining quality and safety standards, which are essential

for strengthening its competitive position. The company is committed to fostering strong employee relations and providing continuous

training to enhance productivity and ensure compliance with quality and safety regulations.

Internal control systems and their adequacy

The Company has in place adequate internal financial controls, with reference to financial statements, commensurate with the size, scale and complexity of its operations.

An extensive risk-based programme of internal audits and management reviews provides assurance to

the audit committee and Board regarding the adequacy and efficacy of internal controls. The internal audit plan is also aligned with the business objectives of the Company which is reviewed and approved by the Audit Committee. Significant audit observations, if

any, along with corrective actions thereon, are presented to the Audit Committee. The internal control system has been designed to ensure that financial and other records are reliable for preparing financial and other statements and for maintaining accountability of assets.