Godavari Biorefineries Ltd Management Discussions

Economic overview

Global economic review

The global economy recorded notable resilience in CY 2025, recording GDP growth of approximately 3.5%, broadly in line with the previous year despite escalating trade tensions and persistent geopolitical uncertainties. Growth in advanced economies remained stable at 1.9% while emerging and developing economies continued to outperform, expanding by 4.5% in CY 2024, underscoring their roles as key drivers of global growth. Global inflation remained relatively stable at 4.1% in CY 2025, although trends remained uneven across regions. The United States continued to experience above-target inflation at 2.8%, while Japans inflation remained at 3.4%, largely due to a temporary gasoline tax cut.

Amid these conditions, commodity markets presented emerging risks. Potential spikes in commodity prices were linked to climate shocks, regional conflicts and broader geopolitical tensions. Such pressures were expected to elevate food and fuel prices, particularly affecting commodityimporting and low-income countries, where rising costs could intensify inflation and food security concerns.

Demonstrating these dynamics, food prices in CY 2025 exhibited an upward trend and were expected to increase further, driven by weather-related disruptions and growing demand for biofuel feedstocks such as soybean oil.¹

Wars and conflicts

Geopolitical tensions, including the Middle East conflict and the Russia- Ukraine war, have significantly impacted global maize markets. Ukraine continues to remain a key exporter, of maize exports, while Russias share has been relatively limited.

Against this backdrop, global maize prices have risen steadily since mid-2024, driven by tightening global supply, lower production in key regions like Brazil and strong export demand. Looking ahead, global maize trade is expected to expand significantly, led by major exporters including the United States, Brazil, Argentina and Ukraine. This growth will be further underpinned by structurally rising demand for maize as a critical feedstock for ethanol production, highlighting its increasing strategic importance within the global biofuel ecosystem.

Tariffs and trade policies

Due to the Trump administrations tightening of restrictions on certain sugar imports, aimed at supporting domestic producers amid rising protectionist policies, the U.S. sought to curb foreign competition and stabilise the domestic industry. This came despite longstanding measures such as tariffs and price guarantees and a loss to imports over the previous two decades, with the move likely to put upward pressure on consumer prices.

In India, a cautious regulatory framework on genetically modified (GM) crops has constrained imports of key commodities such as soy and maize despite their global availability.

While this has shaped domestic supply dynamics, easing such restrictions could improve access to raw materials and support the growth of the poultry and ethanol sectors, strengthening the overall maize value chain.

Climate change and weather extremes

Climate change has emerged as a structural disruptor in agricultural markets. The global sugar market in 2025 experienced significant volatility as climate disruptions, evolving biofuel policies and trade restrictions converged to tighten supply and drive prices upward. Major producing regions, including Brazil and India, experienced production setbacks due to unfavourable climatic conditions.

Additionally, increased diversion of sugarcane toward ethanol production and export restrictions further constrained global availability. These factors collectively led to sharp price increases and heightened uncertainty across international markets, affecting producers, consumers and traders alike.

Outlook

Looking ahead, global economic growth is projected to remain moderate, with GDP expected to expand by around 3.0% in CY 2026. However, persistent geopolitical tensions and potential disruptions to global trade continue to pose significant risks to the outlook. Recent developments in West Asia, including disruptions to key trade routes such as the Strait of Hormuz, could adversely affect global trade flows and energy supply chains, further intensifying the upward pressures on commodity prices observed in recent months. This aligns with earlier trends, where rising energy costs and supply disruptions have already pushed up commodity and food prices, particularly cereals, through higher input costs and increased demand for biofuel feedstocks.

Such disruptions may particularly impact European economies, given their reliance on energy imports. In this context, coordinated and timely policy responses across economies will be essential to manage emerging macroeconomic risks and sustain global economic stability.

Indian economic review

The Indian economy demonstrated strong resilience in Financial Year (FY) 2025-26, supported by robust domestic demand, stable macroeconomic fundamentals and sustained policy support. GDP grew by 7.7%² in FY 2025-26 demonstrating sustained economic momentum.

From a sectoral perspective, manufacturing emerged as a key growth driver, registering strong and broad-based expansion with double-digit growth in FY 2025-26, supported by domestic demand and policy measures. The secondary and tertiary sectors also exhibited robust performance, each recording growth above 9%, within services, segments such as trade, repair, hotels, transport and communication grew by 10.1%, highlighting continued strength in consumption-linked activities.³

On the expenditure side, growth remained balanced between consumption and investment. Private Final Consumption Expenditure (PFCE), accounting for over 61.5% of GDP, continued as the primary driver, while Gross Fixed Capital Formation (GFCF) grew by 7.6%, supported by infrastructure development and private investment.⁴

Indias CPI inflation remained largely contained, standing at 3.40% in March 2026, due to easing food prices and supported by favourable agricultural conditions and timely policy interventions.⁵

On the external front, the economy remained stable despite global uncertainties, supported by adequate foreign exchange reserve of USD 688.1 billion* and prudent fiscal management, with continued emphasis on capital expenditure, infrastructure and structural reforms sustaining macroeconomic stability and investor confidence.⁷ *As on March 27, 2026

Outlook

The Indian economy is expected to maintain a positive growth trend, by strong domestic fundamentals and policy momentum. Economic activity is likely to remain resilient, supported by robust demand, a gradual revival in private investment and sustained government expenditure, alongside healthier corporate and banking sector balance sheets and moderating inflation.

Ongoing structural reforms such as tax rationalisation, regulatory simplification and ease of doing business, along with continued focus on infrastructure, digitalisation and manufacturing, are likely to boost productivity and investment. Improvements in labour market conditions and formalisation will further support growth, with Indias real GDP projected to grow by 6.9% in FY 2026-27.

Tariff-based competitiveness

The proposed India-U.S. Bilateral Trade Agreement marks a strategic milestone in expanding Indias export access by securing preferential entry into a $30 trillion U.S. market.⁸ The agreement significantly reduces tariffs across key sectors such as textiles, machinery, gems and jewellery and agriculture, while also providing zero-duty access for several products, enhancing Indias competitiveness.

The agreement adopts a calibrated approach by protecting sensitive sectors like dairy and cereals, while promoting growth in manufacturing, digital trade and technology cooperation, thereby strengthening Indias position in global trade. Additionally, the agreement creates a clear tariff differential in favour of India, as competing suppliers such as China (35%), Vietnam (20%), Bangladesh (20%),Malaysia (19%), Indonesia (19%),Philippines (19%), Cambodia (19%) and Thailand (19%) continue to face relatively higher duties in the U.S. market.

Union budget 2026-27

Indias Union Budget 2026-2027 focused on accelerating economic growth, enhancing productivity and ensuring inclusive development across sectors. The government projected non debt receipts at Rs.36.5 lakh crores and total expenditure at Rs.53.5 lakh crores with net tax receipts estimated at Rs.28.7 lakh crores. To support fiscal requirements, gross market borrowings were estimated at RS. 17.2 lakh crores.

The Budget also introduced key direct tax reforms including the rollout of the new Income Tax Act from April 2026, reduction in TCS rates and simplification of compliance procedures. Additional measures such as extended timelines for return filing and a one-time disclosure scheme for foreign assets aim to ease compliance for taxpayers.⁹

Monsoons

During the 2025 southwest monsoon season, India received rainfall at 108% of the Long Period Average, remaining within the normal range, with most months recording near or above normal levels. Rainfall distribution was largely favourable across regions, supporting agricultural activity, especially in rain fed areas that depend on monsoon patterns.

As a result, the timely and adequate rainfall played a crucial role in supporting the cultivation of key Kharif crops such as rice, maize, pulses, cotton and oilseeds, thereby contributing to stable crop yields and overall agricultural output.¹⁰

Easing inflation

The operating environment for FY 2026-27 is expected to be influenced by a strong El Nino event, which has historically been associated with weaker south-west monsoon rainfall in India. The India Meteorological Department (IMD) forecasts a below-average monsoon, while neutral Indian Ocean Dipole (IOD) conditions are expected to offer limited offset to El Ninos impact.

As sugarcane is a water-intensive crop, below-average and uneven rainfall could affect cane availability, sugar recovery and crushing volumes, particularly across the peninsular region. Increasingly erratic rainfall patterns also reinforce the need for efficient water management and groundwater recharge. The Companys integrated, multifeedstock model spanning sugarcane, B-heavy molasses, grain-based ethanol and bagasse-based energy helps mitigate climate and feedstock- related risks while enhancing operational resilience.

Consumer price inflation, measured by the Consumer Price Index (CPI) was projected at around 3.7% for FY 202526, remaining within the target range and allowing space for a growth- supportive stance, although global uncertainties and geopolitical risks continue to pose challenges.¹¹

Deeper rate cuts

In the recent RBI monetary policy announcement in FY 2025-26, the repo rate was reduced to 5.25%, with the policy aimed at supporting growth while maintaining price stability. The growth outlook remains positive, supported by strong consumption and improving investment.¹²

Lifting credit restrictions

In December 2025, the RBI strengthened regulatory oversight of NBFCs and group entities within bank-led conglomerates to mitigate contagion risks and regulatory arbitrage. While not all group NBFCs were classified as Upper Layer entities, enhanced scrutiny was introduced across key parameters, including intra group exposures, capital adequacy and governance standards for systemically important NBFCs. The framework also restricted lending against parent bank shares, limited financing for speculative real estate activities and imposed stricter norms on AIF investments, including higher provisioning and tighter exposure limits for higher risk Category III AIFs.¹³

Industry overview

Global bio-based chemicals industry

The global chemical industry continues to evolve as a key enabler of manufacturing and innovation across key sectors, with technology- driven improvements enhancing efficiency and supply chain stability. Demand for specialty chemicals is increasing, alongside a shift toward eco-friendly alternatives supported by feedstock certifications that enable greater transparency.

The use of microbial biosurfactants is expanding application areas, while growth in agriculture and rising demand for biodegradable ingredients in personal care and household products are contributing to overall market expansion.

The global bio-based chemicals market was valued at USD 109.53 billion in CY 2025 and is projected to increase to USD 120.16 billion in CY 2026, reaching USD 249.36 billion by CY 2034, at a CAGR of 9.6% over the period 2026-2034. Europe held the largest share at 49.5% in FY 2024-25, while the United States is expected to witness strong growth, reaching an estimated USD 40.9 billion by FY 203132, driven by increasing demand for sustainable alternatives and evolving environmental regulations.¹⁴

Indian bio-based chemicals industry

Indias bio-based chemicals industry is witnessing steady growth, supported by a rising focus on sustainability, circular economy practices and the need to reduce dependence on fossil-based resources. The sector leverages diverse feedstocks such as sugarcane, agricultural residues, biomass and organic waste, with production processes including fermentation, enzymatic conversion and chemical processing. The growing integration of bio-based chemicals with biofuels, particularly through shared feedstocks and processing pathways, is strengthening the overall value chain.

The development of integrated biorefineries is emerging as a key enabler, allowing conversion of biomass into multiple high-value products, including chemicals, fuels, power and heat. These systems are gaining importance for improving resource efficiency, reducing waste and supporting sustainable production, although commercial viability continues to depend on cost competitiveness and policy support.

Government initiatives are playing a pivotal role in accelerating the sector. Policies such as the BioE3 framework and Mission Integrated Bio-refineries are aimed at scaling up biomanufacturing, promoting innovation and enabling large-scale production of bio-based products.

With strong agricultural linkages, expanding domestic demand and increasing policy support, the industry is well positioned for further expansion, supported by efforts to strengthen supply chains, improving feedstock availability and enhancing technological capabilities will be critical in unlocking its full potential and enhancing Indias role in the global bio-based chemicals ecosystem

Indian ethanol industry

In FY 2025-26, Indias ethanol blending programme recorded notable progress, achieving the 20% ethanol blending target in petrol ahead of schedule and marking an important milestone in the countrys energy transition journey. The Government continued to support supply through expansion of feedstock sources such as sugarcane, maize and surplus rice, including allocation of Food Corporation of India (FCI) rice and development of maize clusters. Additional measures such as administered pricing, reduction of GST to 5%, interest subvention schemes and long-term offtake agreements supported production and supply.¹⁵

At the same time, India has begun laying the groundwork for the next phase of ethanol adoption, including higher blends such as E85 and E100. Proposed regulatory changes aim to enable the use of these fuels, particularly in flex- fuel vehicles (FFVs), signalling a shift beyond the current E20 benchmark.

This evolution is aligned with the broader objective of reducing crude oil imports, promoting indigenous fuel alternatives and accelerating the transition to cleaner mobility solutions.

The programme has already contributed to foreign exchange savings, crude oil substitution, CO₂ emission reduction and increased payments to farmers.

The roadmap for blending beyond E20 remains under consideration, with stakeholder consultations and further evaluation in progress.

Global sugar industry

Overview

The global sugar market reached approximately 197.5 million tons in CY 2025 and is projected to grow to 223.9 million tons by CY 2034, a CAGR of 1.33% during the period 2026-2034. Growth is supported by increasing consumption of processed foods and beverages, particularly across confectionery, bakery and beverage segments, along with changing dietary patterns and rising urbanisation.

Brazil continues to lead the global market in CY 2025, supported by strong production capabilities and favourable climatic conditions, while countries such as India and the United States are also witnessing rising demand.

In the United States, growth is driven by expansion in confectionery and bakery sectors, supported by higher consumer spending and preference for premium food products.

White sugar dominates by product type, while granulated sugar holds the largest share by form. The food and beverages sector remains the largest end-use segment and sugarcane continues to be the primary source, accounting for the majority of production globally.¹⁶

Outlook

Sugar demand is projected to strengthen over the next decade, particularly in South and Southeast Asia and Africa, supported by population growth, rapid urbanisation and rising disposable incomes. At the same time, Brazil and India are expected to remain major contributors to global sugar supply. Together, the two countries are projected to account for 42% of global sugar output, with their production levels expected to have a significant influence on global price dynamics over the coming decade.¹⁷ Additionally, global sugar production level is expected to surpass consumption level in the coming years. While global consumption is projected to grow, supported by softer prices and easing food inflation. The overall supply conditions are likely to remain comfortable. Improved cane availability in key producing regions and greater flexibility in production dynamics, particularly in Brazil, will continue to influence global output levels.

However, the growth outlook remains tempered by structural and behavioural headwinds. Increasing health consciousness, regulatory curbs on sugar consumption and the rising adoption of alternatives such as GLP-1 weight loss treatments are expected to moderate demand growth over the medium term. On the supply side, profitability pressures for mills and farmers, along with crop substitution trends in certain regions, could create periodic imbalances, but are unlikely to significantly tighten the overall surplus scenario in the near term.

Indian sugar industry

Overview

Indias sugar industry is one of the largest agro-based industries in the country, ranking second after cotton and playing a critical role in rural livelihoods and employment. The country is among the leading global producers supported by key states such as Uttar Pradesh, Maharashtra and Karnataka. Domestic consumption is driven by demand from food and beverages, confectionery and traditional products such as sweets.

In FY 2025-26, the industry experienced a relatively tighter supply environment, with production estimated at around 28 million tonnes, impacted by lower cane yields and early closure of mills. Despite this, domestic availability remained manageable, supported by adequate opening stocks and calibrated exports. Stock levels declined during the year but remained sufficient to meet domestic demand requirements.

India continues to play a significant role in global sugar trade and has been among the top exporters in recent years. Key markets include Indonesia, Bangladesh and the UAE. Policy interventions, including export quotas and ethanol diversion, remain central to balancing domestic supply, pricing and farmer incomes. At the same time, the increasing integration of ethanol production is structurally reshaping the sector, providing an additional revenue stream and supporting the countrys broader energy transition.

Outlook

The outlook for Indias sugar industry in FY 2026-27 remains stable, with adequate domestic availability and controlled exports expected to support supply for both sugar and ethanol production, strengthening the sectors integrated growth model. However, structural challenges persist. Regulated cane pricing, pressure on mill margins and continued diversion towards ethanol production are expected to influence profitability dynamics. While government policies and blending targets will support long-term stability, profitability will depend on effective cost management and alignment between sugar and ethanol economics.

Performance of major sugar growing states

Maharashtra: Maharashtra remains the largest producer in terms of total cane crushed and sugar output, but lags in efficiency. The state recorded a recovery rate of around 9.5%, with lower per-mill productivity compared to UP despite having a larger number of mills.

Uttar Pradesh (UP): UP has emerged as the top performer in the 2025-26 season, recording the highest sugar recovery of about 10.2%, above the national average.

It also leads in per-mill efficiency, with strong crushing volumes and higher sugar output per mill, indicating better operational performance.

Karnataka: Karnataka recorded a lower recovery rate of about 8.6%, with overall output smaller than both UP and Maharashtra. However, it performs relatively better than Maharashtra on a per-mill basis, indicating comparatively higher efficiency at the individual mill level.

Sugar exports and imports

In FY 2025-26, Indias sugar industry operated in a relatively tight supply environment, with production at approximately 28 million tonnes against domestic demand of 28.5-29 million tonnes. While lower cane yields and early closure of mills impacted output, exports continued with quotas increased to 2 million tonnes, supporting trade flows. As a result, domestic stock levels moderated from around 5 million tonnes at the start of the season.¹⁸

In FY 2026-27, the Indian sugar industry is expected to witness a relatively tighter supply environment following the Governments decision to ban sugar exports until September 2026 amid concerns over El Nino-related weather risks, future cane availability and domestic stock levels. Lower production and restricted exports are likely to reduce opening inventories compared to previous surplus years, supporting domestic sugar prices while keeping the sector under close regulatory and inventory monitoring to ensure adequate local availability and control food inflation.

Government initiatives

The Government of India is driving a strategic shift towards integrated and diversified production models across key sectors. This approach is supported by targeted financial incentives, streamlined regulatory frameworks and infrastructure development to enhance sustainability, innovation and longterm resilience.

Biofuel Scheme 2025 (Madhya Pradesh): The state government has introduced a focused biofuel policy to promote green energy production and efficient utilisation of agricultural residues. The scheme offers incentives for setting up biofuel manufacturing units and bio-energy plants, with a focus on driving rural economic development and employment generation.

National Bio-Energy Mission: The government is strengthening the National Bio-Energy Mission to accelerate biofuel development through financial support and regulatory facilitation. The initiative also encourages public-private partnerships to scale advanced biofuel technologies and enhance domestic production capabilities.

Ethanol Blending Programme (EBP):

India has achieved 20% ethanol blending in petrol ahead of schedule, marking a significant milestone in its energy transition.¹⁹ This progress has been enabled by a diversified feedstock strategy, including sugarcane-based molasses, grain-based ethanol such as maize and broken rice and surplus food grains. The programme has contributed to reducing crude oil imports, generating substantial foreign exchange savings and improving farmer incomes.

Incentives for Ethanol Production:

The government is providing attractive financial incentives to sugar mills for ethanol production from sugarcane and maize, alongside increased funding support for second-generation ethanol projects utilising agricultural residue.

Regulatory Reforms: Simplified licensing procedures and reduced compliance requirements are improving ease of doing business, particularly benefiting small and medium- scale ethanol producers. Thereby accelerating capacity expansion.

Sugar Development Fund (SDF): The Sugar Development Fund (SDF) was established in 1982 through an Act of Parliament to support the growth and modernisation of the sugar industry.

The fund extends concessional loans to sugar mills for rehabilitation and modernisation, cogeneration, ethanol and anhydrous alcohol production, conversion of existing plants into Zero Liquid Discharge (ZLD) facilities and sugarcane development at interest rates 2% lower than the prevailing bank rate.

Sugar Export Policy: To maintain market balance and support the domestic sugar industry, the government permitted exports of 1 million tonnes of sugar during the 2024-25 season. This measure helps manage surplus and stabilise domestic prices.²⁰

BioE3 Policy: The BioE3 policy has been introduced to promote high- performance bio-manufacturing in India. It aims to complement existing production systems with biotechnology- driven solutions, enabling large-scale development of bio-based products and supporting the countrys long-term economic and sustainability objectives.

Growth drivers

Technology Adoption and Efficiency Gains: Indian sugar mills are increasingly adopting digital technologies to improve operational efficiency, enhance productivity and reduce costs. The industry is investing in digital initiatives, demonstrating continued progress in modernisation.

Shift Towards Value-Added Sugar Products: Growing health awareness is driving demand for specialty sugars such as organic, brown and low-calorie variants. This trend is further supported by increasing consumption of premium and gourmet food products.

Increasing Consumption Across Beverage Segments: Sugar continues to play a key role in improving taste, texture and shelf-life across a wide range of beverages, including cocktails, energy drinks and shakes.

Daily consumption through tea and coffee also contributes significantly to overall demand.

Expanding Use in Personal Care Products: Demand for sugar is rising in the personal care segment, supported by its use in scrubs and skincare products due to its exfoliating and hydrating properties. Growth in the global beauty and personal care market is further supporting this trend.

Enhanced Market Accessibility: Wide availability across retail and online channels, along with affordability, is driving higher consumption. Easy access and diverse product formats continue to support widespread adoption.

Growing Role in Biofuels: Increasing focus on cleaner energy and urbanisation is supporting higher biofuel consumption. Ethanol production is gaining importance as a key component of energy transition efforts.

Agriculture-Linked Ethanol Expansion:

Ethanol production is creating additional revenue opportunities for farmers, with increased focus on crops such as corn and sugarcane to support rising demand.

Focus on Energy Security: The

Ethanol Blending Programme strengthens energy security through reduced crude oil imports and foreign exchange savings, while advancing cleaner fuel options. The roadmap for moving beyond E20 remains under consideration, with consultations underway.

Narrowing Fossil-Renewable Cost Gap: Sustained volatility in fossil fuel and energy markets has narrowed the price gap between conventional and bio-based chemicals, strengthening the competitiveness of renewable, bagasse- and ethanol-derived specialty products across domestic and export markets.

Rising Share of Value-Added Specialty Chemicals: A deliberate shift towards higher-value specialty chemistry, supported by debottlenecking, process optimisation and innovation-led development, is steadily improving the specialty mix within the biobased portfolio and enhancing segment margins.

Integrated Biorefinery Feedstock Advantage: Captive ethanol from an expanding distillery base, combined with predominantly bagasse-based energy, provides a secure and cost- stable feedstock platform, reducing exposure to import-led raw material inflation and supporting reliable supply for global customers

Company overview

Godavari Biorefineries Limited ("the Company”) is a pioneer in manufacturing ethanol-based chemicals in India and operates the countrys largest integrated biorefinery. The Company is among Indias largest producers of ethanol.

Its diversified portfolio includes biobased chemicals, ethanol, sugar and cogeneration, catering to a wide range of industries such as personal care, cosmetics, food, fragrance, fuel, paints, agrochemicals, mining, pharmaceuticals and other industrial applications.

The Company is also expanding its capabilities through addition of dual and fungible capacity in grain-based ethanol production.

The Companys manufacturing operations are supported by its bio based chemicals facility at Sakarwadi, Maharashtra with 20+ products of bio based speciality chemicals and Sameerwadi facility in Karnataka, which has a sugarcane crushing capacity of 20,000 TCD, environmental clearance for expansion to 25,000 TCD and an ethanol production capacity of 570 KLPD, with plans to scale up to 1,000 KLPD, aligning with Indias biofuel initiatives. The Company follows sustainable practices with a focus on waste minimisation and environmentally responsible operations. It has a global presence across multiple countries with offices in the Netherlands and the United States, while adhering to international quality standards. Backed by the Somaiya Group, the Company continues to prioritise innovation and sustainable growth.

Financial overview

Analysis of the statement of Profit & Loss

Revenues (Consolidated): Revenues are increasing. Total income from operations stood at T 2,000.15 crores in FY 2025-26 as compared to T 1,886.91 crores in FY 2024-25 demonstrating an increase of 6.0%.

Export: Bio based chemical business revenue contributes Rs.577.99 crores, 29.1% of total revenues. The bio-based chemicals business made a significant contribution to the Companys total revenue generated in FY 2025-26. Within this business, exports also accounted for a significant share of the total revenue generated from bio-based chemicals.

Expenses (Consolidated): Total expenses increased by 4.0% to Rs. 1,964.45 crores in FY 2025-26 from Rs. 1,888.45 crores in FY 2024-25. Raw material* costs account for a 71.3% share of the companys total income as compared to 73.4% in FY 2024-25. Employee expenses accounted for a 6.8% share of the companys Total Income and increased by 7.88% to Rs. 135.22 crores in FY 2025-26 from Rs. 125.35 crores in FY 2024-25.

*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 4.6% to Rs. 1,078.53 crores as on MarcRs. 31, 2026 from Rs. 1,030.94 crores as on MarcRs. 31, 2025. The net worth of the company increased to Rs. 788.29 crores as on MarcRs. 31, 2026 from Rs. 781.96 crores as on MarcRs. 31, 2025. The companys equity shares capital comprised 5,11,75,977 equity shares of T 10 each.

Long-term debt of the company increased to Rs. 333.32 crores as on MarcRs. 31, 2026 from Rs. 239.74 crores as on MarcRs. 31, 2025 post scheduled repayment of Rs. 41.81 crores. The standalone long-term debt equity ratio of the company stood at 0.97 in FY 2025-26 compared to 0.91 in FY 2024-25.

Finance costs of the company decreased by 31.56% to Rs. 49.13 crores in FY 2025-26 from Rs. 71.78 crores in FY 2024-25 on account of prepayment of term loan during FY 2024-25 and repayment of term loan during FY 2025-26.

Applications of funds: During FY 2025-26, Capex incurred by the Company was

T 165.62 crores, whereas, in FY 2024-25 it was Rs. 71.37 crores.*

*This inlcludes Payments for purchase of property, plant and equipment (net) and Proceed from sale of property, plant and equipment

Working capital management: Current assets of the company decreased by 3.1% to Rs. 991.52 crores as on MarcRs. 31, 2026 from Rs. 1,023.26 crores as on MarcRs. 31, 2025. The current ratios of the company stood at 1.13 at the close of FY 2025-26 compared to 1.16 at the close of FY 2024-25.

Inventories including raw materials, work-in-progress and finished goods among others increased by 4.9% to Rs. 775.80 crores as on MarcRs. 31, 2026 from Rs. 739.71 crores as on MarcRs. 31, 2025. The inventory turnover ratio stood at 2.40 in FY 2025-26 as compared to 2.25 in FY 2024-25.

Trade receivables decreased by 17.8% to T 113.60 crores as on MarcRs. 31, 2026 from T 138.22 crores as on MarcRs. 31, 2025. Trade receivable turnover ratio stood at 15.57 as on MarcRs. 31, 2026 as compared to 11.27 as on MarcRs. 31, 2025.

Key financial ratios

Particulars	2025-26	2024-25
Debt-equity ratio	0 97	0 91
Debtors turnover ratio	15 57	1127
Inventory turnover ratio	2 40	2 25
Interest coverage ratio	129	0 94"
Current ratio	113	116
Operating profit margin	4 27	375
Net profit ratio	0 00	-0 00"

Segment wise financial analysis

	2025-26	2024-25
Particulars	Total Income	EBITDA	% Share of total revenue	Total Income	EBITDA	% Share of total revenue
Sugar	688 13	64 14	34 40%	678 96	39 7	3598%
Cogeneration	42 06	3 9"6	210%"	5091	9”24	2 70%"
Bio based Chemicals	57824	4775	2891%"	543 22	3783	28 79%"
Distillery	66113"	29 29"	33"05%"	584 98	3269	3100%"
Unallocated	30 59	(5.82)	1.53%	28.84	0.85	1.53%
Total	2,000.15	139.33	100%	1,886.91	120.31	100%

Industries Served

Godavari Biorefineries Limited caters to a diverse range of industries through its broad portfolio of bio-based and value-added products. The Companys integrated manufacturing capabilities and focus on innovation enable it to serve multiple industrial, consumer and specialty segments with sustainable and efficient solutions. Its diversified presence across end-use industries strengthens market resilience and supports long-term growth opportunities.

Industry	Overview
Adhesives and Lubricants	The Company provides key ingredients and solutions for adhesives, sealants and binders that enable flexibility and superior bond strength. It also serves the lubricant industry with raw materials based on renewable resources that deliver performance every time.
Agriculture	The Company develops solutions for challenges faced by farmers that help increase productivity, yield and quality while ensuring crop sustainability and the health of the earth.
Biofuels	The Company is actively developing clean technologies to promote innovative alternative energy sources.
Electronics	The Company supplies specialty chemicals used in many processing steps in the manufacture of electronic components and products, supporting sustainable chemicals of high quality and high-purity.
Flavours	The Company manufactures specialty chemicals used in flavours across foods, beverages, confectionaries, pharmaceuticals, oral care products, cosmetics and nutrition products.
Food & Beverage	The Company provides additives that help stabilize and lengthen shelf life while enhancing flavour and texture of food products. Its food grade manufacturing facility is HACCP qualified and supports sustainable food manufacturing.
Fragrance	The Company provides chemical compounds used as additives in fragrance configurations for food, pharmaceutical, personal care, fabric care and household care products, delivering reliability and quality.
Oil, Gas and Mining	The Company manufactures biodegradable frothers from renewable feedstock such as sugarcane for ore beneficiation processes used in the mining industry, helping increase recovery and grade.
Packaging and Printing Inks	The Company provides optimum quality chemistry for packaging material manufacturers and sustainable, ecologically safe solutions for printing ink applications.
Paints & Coatings	The Company provides sustainable solutions and high-performance chemicals used as solvents and polish in the paints and coatings industry, including products manufactured from bio-based renewable resources.
1 Personal Care and Cosmetics	The Company offers a wide variety of products including fragrances, flavours, adhesion promoters, film formers and emollient esters used in personal care products, while supporting sustainability through bio-based renewable resources.
Pharmaceuticals > i	The Company provides chemicals and excipients for pharmaceutical applications, supporting quality, consistency and sustainable manufacturing across formulations and drug delivery systems.
Plastics, Paper and Resins	The Company supplies plasticizers, solvents, resins and additives that improve processing and product properties while contributing to sustainability through bio-plastics and products manufactured from bio-based renewable resources.
Textiles and Leather	The Company provides chemicals used across textile and leather manufacturing processes, including waterproofing, finishing and fibre production, while ensuring environmentally friendly and sustainable production practices.

Opportunity and Challenges

Opportunities

Policy Tailwinds & Ethanol Expansion

Indias push towards cleaner fuels continues to create a strong growth runway. With governments sustained focus on ethanol blending provides further policy support for companies such as Godavari Biorefineries to scale ethanol production. Regulatory flexibility allowing higher diversion of sugar toward ethanol strengthens product mix optimisation and enhances revenue stability while supporting national energy security goals.

Strong Agro-Climatic Outlook

Favourable monsoon forecasts across key sugarcane producing regions such as Maharashtra and Karnataka are expected to improve crop yields. Adequate water availability and healthy sowing trends provide a solid foundation for higher recovery rates and improved sugarcane productivity in upcoming seasons, benefiting operational efficiency.

Expansion into Bio-based Value Chains

The company is well-positioned to leverage integrated operations by maximising by-product utilisation. Bagasse-based co-generation can contribute to energy self-sufficiency and additional revenue streams. Further, diversification into high- value ethanol derivatives such as rectified spirit, extra neutral alcohol and absolute alcohol supports entry into industrial, pharmaceutical and specialty chemical markets, reducing dependence on traditional sugar cycles.

Challenges

Climate Variability & Resource Stress

Sugarcane cultivation remains highly water-intensive, making it vulnerable to uneven rainfall patterns and long-term climate shifts. Increasing frequency of droughts and uneven monsoon distribution can disrupt cane availability, reduce yields and create volatility in production planning, posing sustainability challenges for the business.

Rising Input Costs & Margin Pressure

Escalating costs of agricultural inputs and alternative feedstocks such as rice and maize can impact ethanol manufacturing. Fluctuations driven by macroeconomic factors may compress margins and increase overall cost pressures across the value chain.

Human resources

2,447

Workforce Strength

97%

Employee Retention Rate

The Company recognises that its workforce plays a critical role in maintaining quality and safety standards and strengthening its competitive position. It remains committed to encouraging strong employee relations, promoting continuous training and ensuring compliance with regulatory requirements. The Company also emphasises inclusivity and equitable practices through initiatives that support workforce development, gender equity and employee well-being, thereby building a skilled and resilient workforce while contributing positively to the communities around its operations.

Sustainability

Sustainability is embedded in the Companys core strategy and operations, with a focus on responsible growth and long-term value creation. The Company is committed to environmental stewardship through efficient resource utilisation, transition towards cleaner energy sources and initiatives aimed at reducing environmental impact.

The Company recognises that its agro industrial operations offer significant potential to demonstrate leadership in sustainable industrial transformation. This approach is guided by the belief that business growth and environmental responsibility must go hand in hand to ensure intergenerational equity and long-term resilience. Efforts are also directed towards conservation of natural resources, strengthening biodiversity and promoting circular practices across operations, aligning business objectives with broader sustainability goals while building a resilient and future ready organisation.

Risk management

A balanced growth strategy necessitates the identification and effective management of key risks that may impact execution and outcomes. The Company has implemented appropriate systems, review mechanisms and procedures to identify and manage such risks efficiently.

Risk	Description	Mitigation Strategy
Supplier concentration risk	Dependence on a limited number of suppliers for key raw materials excluding sugarcane may disrupt operations in case of supply constraints	Diversifying the supplier base, maintaining material reserves and securing long term relationships to ensure supply stability
High raw material cost risk	Material consumption costs form a significant portion of expenses and price increases may impact profitability	Use of hedging or forward contracts, optimising procurement, reducing waste and periodic product price adjustments can help manage material cost fluctuations.
Customer concentration risk	Revenue dependence on a few key customers may affect performance if demand reduces or customers are lost	Expanding the customer base, strengthening relationships through value added services and monitoring customer credit and financial health can mitigate customer concentration risks.
Product concentration risk	Reliance on a limited product portfolio may expose revenues to fluctuations in market demand	Diversifying product offerings, investing in research and development 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	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 impact brand reputation and market access	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 effective R&D and failure to launch new products may affect competitiveness	Allocating focused 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 loss of market share	Differentiating through quality, sustainability and customer service, improving operational efficiency and investing in branding and digital marketing can mitigate competitive pressure.

Internal control systems and their adequacy

The Company has established adequate internal financial controls with reference to financial statements, commensurate with the size, scale and complexity of its operations. A comprehensive risk based internal audit programme and management reviews provide assurance to the Audit Committee and the Board on the adequacy and effectiveness of these controls. The internal audit plan is aligned with business objectives and is reviewed and approved by the Audit Committee. Key audit observations, along with corrective actions, are regularly presented to the Committee. The internal control framework ensures reliability of financial records for reporting purposes and supports effective safeguarding and accountability of assets.

Cautionary Statement

The Management Discussion and Analysis may contain forward looking statements showing the Companys current expectations regarding future performance. These statements are subject to various known and unknown risks and uncertainties that could cause actual results to differ materially. Factors such as changes in the macroeconomic environment and unforeseen events may impact outcomes. The estimates and projections are based on assumptions derived from currently available internal and external information, which are subject to change. The Company does not undertake any obligation to update or revise these statements in light of new information or future developments.