Zuari Industries Ltd Management Discussions

Economy Overview

Global Economy

Overview

FY26 unfolded against a complex and rapidly evolving global backdrop. The world economy demonstrated resilience despite heightened trade and policy uncertainty, the continuing Russia-Ukraine conflict, persistent instability in the Middle East and disruptions along critical maritime trade routes. Changes in tariff policies across major economies further affected global trade flows, supply-chain decisions and investment sentiment, even as moderating inflation and resilient labour markets supported economic activity across several regions.

Geopolitical risks intensified sharply towards the close of FY26 with the outbreak of the US-Iran war. The resulting disruption to movement through the Strait of Hormuz - one of the worlds most important corridors for crude oil, natural gas and fertiliser supplies, triggered significant volatility in global energy and commodity markets. Higher crude oil and gas prices, together with increased freight, insurance and rerouting costs, placed renewed pressure on production costs, supply chains and inflation. Energy-importing economies were particularly exposed through higher import bills, currency pressures and tighter financial conditions, while disruptions to fertiliser supplies also raised concerns regarding agricultural input and food prices.

These developments complicated the policy environment for governments and central banks. Although inflation had moderated across several advanced and emerging economies during much of the year, renewed volatility in energy and food prices required monetary authorities to remain cautious in balancing growth considerations with price stability. At the same time, elevated tariffs, geopolitical fragmentation and uncertainty surrounding global trade arrangements continued to weigh on business confidence and long-term investment decisions.

Notwithstanding these headwinds, sustained investment in digital infrastructure and artificial intelligence supported productivity, technology-related trade and business transformation. Overall, the global economy remained resilient during FY26; however, geopolitical tensions, volatile commodity markets, evolving trade policies and the potential for further supply-chain disruptions continued to pose downside risks. This operating environment reinforced the importance of financial discipline, supply-chain resilience and organisational agility in navigating an increasingly uncertain global landscape.

Economic Growth

CY2025 was characterised by a dynamic global economic environment, as economies adapted to evolving trade policies, geopolitical developments, and shifting macroeconomic conditions. Global GDP grew by 3.4%, supported primarily by the continued growth of Emerging Market and Developing Economies (EMDEs). While growth remained below long-term historical averages, moderating inflation and improving financial conditions supported economic activity across several regions.

Among major economies, the United States grew by 2.1%, supported by consumer spending, a stable labour market, and continued investment in technology and innovation, although economic momentum moderated during the year. China recorded growth of 5.0%, driven by strong export performance and targeted policy measures despite continued weakness in the real estate sector and uneven domestic demand.

Global trade expanded at a measured pace during the year. However, uncertainty surrounding trade policies and geopolitical developments continued to influence business sentiment and cross-border commerce. Overall economic activity was supported by steady domestic demand, supportive policy measures and continued investment in technology and digital transformation. The pace of growth, however, varied across regions, reflecting differences in economic fundamentals, policy responses and sector-specific conditions.

Inflationary trends

Inflationary pressures continued to moderate across most major economies during CY2025, although the pace of disinflation remained uneven. According to the IMF, global headline inflation is projected to increase from 4.1% in 2025 to 4.4% in 2026, before easing to 3.7% in 2027, reflecting the impact of evolving trade policies, geopolitical developments, and adjustments in global supply chains.

Global Headline core CPI inflation

Inflation remained relatively contained in advanced economies, averaging at 2.8%, while Emerging Market and Developing Economies (EMDEs) continued to experience comparatively higher inflation at 5.5%, reflecting structural differences in demand conditions, policy responses, and domestic economic dynamics. Although easing energy prices and moderating demand supported the disinflation process, underlying price pressures, particularly in the services sector remained elevated. As a result, inflation remained above central bank targets across several economies, prompting policymakers to adopt a measured approach towards monetary policy while balancing the need to support economic growth.

GDP Growth Projections in (%)

	Projections			Difference from January 2026 WEO Update		Difference from October 2025 WEO
	2025	2026	2027	2026	2027	2026	2027
World Output	3.4	3.1	3.2	-0.2	0.0	0.0	0.0
Advanced Economies	1.9	1.8	1.7	-0.1	0.0	0.2	0.0
United States	2.1	2.3	2.1	-0.1	0.1	0.2	0.0
Euro Area	1.4	1.1	1.2	-0.2	-0.2	-0.1	-0.2
Germany	0.2	0.8	1.2	-0.3	-0.3	-0.1	-0.3
France	0.9	0.9	0.9	-0.1	-0.3	0.0	-0.3
Italy	0.5	0.5	0.5	-0.2	-0.2	-0.3	-0.1
Spain	2.8	2.1	1.8	-0.1	0.1	0.1	0.1
Japan	1.2	0.7	0.6	0.0	0.0	0.1	0.0
United Kingdom	1.3	0.8	1.3	-0.5	-0.2	-0.5	-0.2
Canada	1.7	1.5	1.9	-0.1	0.0	0.0	0.0
Other Advanced Economies	3.0	2.6	2.2	0.0	0.1	0.6	0.1
Emerging Market and Developing Economies	4.4	3.9	4.2	-0.3	0.1	-0.1	0.0
Emerging and Developing Asia	5.5	4.9	4.8	-0.1	0.0	0.2	0.0
China	5.0	4.4	4.0	-0.1	0.0	0.2	-0.2
India	7.6	6.5	6.5	0.1	0.1	0.3	0.1
Emerging and Developing Europe	2.0	2.0	2.1	-0.3	-0.3	-0.2	-0.3
Russia	1.0	1.1	1.1	0.3	0.1	0.1	0.0
Latin America and the Caribbean	2.4	2.3	2.7	0.1	0.0	0.0	0.1
Brazil	2.3	1.9	2.0	0.3	-0.3	0.0	-0.2
Mexico	0.6	1.6	2.2	0.1	0.1	0.1	0.2
Middle East and Central Asia	3.6	1.9	4.6	-2.0	0.6	-1.9	0.8
Saudi Arabia	4.5	3.1	4.5	-1.4	0.9	-0.9	1.3
Sub-Saharan Africa	4.5	4.3	4.4	-0.3	-0.2	-0.1	-0.1
Nigeria	4.0	4.1	4.3	-0.3	0.2	-0.1	0.3
South Africa	1.1	1.0	1.3	-0.4	-0.2	-0.2	-0.2
Memorandum
World Growth Based on Market Exchange Rates	2.9	2.6	2.6	-0.2	0.0	0.0	-0.1
European Union	1.6	1.3	1.4	-0.2	-0.2	-0.1	-0.2
ASEAN-5	4.5	4.1	4.4	-0.1	0.0	0.0	0.1
Middle East and North Africa	3.2	1.1	4.8	-2.8	0.8	-2.6	1.1
Emerging Market and Middle-Income	4.4	3.8	4.1	-0.3	0.0	-0.1	0.0
Economies
Low-Income Developing Countries	4.8	4.8	4.9	-0.3	-0.2	-0.2	-0.4

Source: IMF World Economic Outlook Apr26

Outlook

The global economy is expected to maintain a steady growth trajectory, supported by improving macroeconomic conditions and continued investment across both advanced and emerging economies. While geopolitical developments, evolving trade policies, and regional conflicts are likely to remain sources of uncertainty, strengthening domestic demand, ongoing supply chain diversification, and continued technological advancement are expected to support economic activity. As businesses and policymakers continue to adapt to a changing global environment, productivity-enhancing investments and disciplined policy measures are expected to provide a solid foundation for sustainable long-term growth.

Indian Economy

The Indian economy continued to register broad-based growth during FY2025–26, driven by strong domestic demand, sustained public investment, and steady expansion across key sectors. Moderating inflation, improving labour market conditions, continued infrastructure spending, and ongoing structural reforms further reinforced economic activity during the year. While geopolitical developments and external uncertainties continued to shape the global economic landscape, Indias stable macroeconomic environment and sound financial system enabled the economy to maintain its growth momentum. As a result, India retained its position as one of the fastest-growing major economies, underpinned by strong domestic fundamentals and a diversified growth base.

Economic growth

Economic growth during the year was supported by strengthening domestic consumption across both rural and urban markets. Improved agricultural output contributed to higher rural incomes and consumption, while urban demand gained momentum, aided by tax rationalisation measures and improving consumer sentiment. This broadening of the consumption base, together with continued public and private investment, reinforced the momentum of economic activity across sectors.

GDP growth

India is expected to remain the fastest-growing major economy in FY2026–27, with growth projections reflecting continued confidence in the countrys underlying economic fundamentals. The Reserve Bank of India projects GDP growth at approximately 6.7%, while estimates from multilateral institutions, rating agencies, and financial institutions broadly range between 6.0% and 6.9%. Expansion is likely to be supported by continued government capital expenditure and a recovery in private consumption. The services sector continued to be the principal driver of growth, led by financial services, information technology, and public administration, which grew by 10.4%. Trade, hotels, transport, communication, and related services also recorded robust growth of 11.0%, reflecting healthy economic activity and consumer demand. Manufacturing and construction maintained strong momentum, growing by 10.7% and 7.4%, respectively, supported by continued industrial activity and infrastructure development. Meanwhile, the agriculture sector grew by 3.0%, aided by favourable monsoon conditions that supported agricultural output and strengthened rural demand. Overall, the broad-based performance across sectors reinforced Indias growth momentum during the year.

Source: Ministry of Statistics & Programme Implementation, June 26

Looking ahead, Indias growth outlook remains favourable, supported by continued infrastructure development, healthy credit growth, improving private investment, and favourable agricultural conditions. Supported by strong macroeconomic fundamentals and sustained policy focus, India is expected to remain among the fastest-growing major economies globally in the coming years.

Source: BCG India Economic Monitor May 26

Inflation

Inflationary pressures intensified towards the beginning of FY27, with wholesale inflation rising sharply while consumer inflation remained relatively moderate. Wholesale Price Index (WPI) inflation rose to 8.3% in April 2026, driven by higher prices of fuel and power, primary articles, and manufactured products. Consumer Price Index (CPI) inflation also increased to a 13-month high of 3.5%, primarily due to rising food prices, higher core services inflation, and elevated precious metal prices.

RBIs Policy Rate

At its June 2026 Monetary Policy Committee (MPC) meeting, the Reserve Bank of India (RBI) kept the benchmark repo rate unchanged at 5.25% while retaining a neutral policy stance. The decision reflected a balanced approach towards supporting economic growth while remaining vigilant to evolving global uncertainties, including geopolitical tensions and elevated crude oil prices. The RBI also noted that Indias strong macroeconomic fundamentals, healthy foreign exchange reserves, and sustained foreign direct investment inflows continue to reinforce the economys resilience against external shocks.

Global Sugar Market

The global sugar market is expected to return to a surplus in the 2025–26 season, supported by improved production across key sugar-producing countries. According to the International Sugar Organization (ISO), global sugar production is projected to increase to approximately 181.8 million tonnes, driven primarily by higher output from India, Thailand, and Pakistan. While global sugar consumption is also expected to grow, production is forecast to outpace demand, resulting in a global surplus of around 1.6 million tonnes following the deficit recorded in the previous season. Similar trends have also been reflected in projections by the United States Department of Agriculture (USDA), which anticipates higher global sugar production supported by improved output in major producing countries in 2025/26. A summary of ISOs world balance projected for 2025/26 and estimated for 2024/25 is provided below.

World Sugar Balance

(October/September, in Million MT, tel quel)

			Change/s
	2025/26	2024/25	Million MT	in %
Production	181.767	176.215	5.552	3.15
Consumption	180.142	179.131	1.011	0.56
Surplus / Deficit	1.625	-2.916
Import demand	62.962	64.458	-1.496	-2.32
Export availability	64.733	64.740	-0.007	-0.01
End Stocks	95.004	95.150	-0.146	-0.15
Stocks / Consumption ratio in %	52.74	53.12

Source: Chinimandi

Trade Dynamics

Trade dynamics remained favourable during the year, supported by resilient export performance despite global economic uncertainties. Indias total exports of merchandise and services rose 4.2% year-on-year to US$ 860.1 billion in FY2025-26, led by continued strength in services exports and steady growth in non-petroleum merchandise exports. While imports grew at a faster pace, reflecting robust domestic demand, the countrys export basket remained diversified, with engineering goods, petroleum products and processed minerals contributing to growth. This sustained trade momentum underscored Indias expanding global competitiveness and continued integration with international markets.

Indias Total Exports Value

Global Sugar Prices

International sugar prices moderated on a year-on-year basis during FY2025–26, reflecting improved global supply conditions. Raw sugar prices declined from USD 384/MT in May 2025 to USD 326/MT in May 2026, while white sugar prices fell from USD 490/MT to USD 440/MT over the same period. However, both raw and white sugar prices recovered from their April 2026 levels, indicating a gradual improvement in market sentiment towards the end of the year.

Trends in raw sugar prices

Future Estimates

The outlook for the 2026/27 season suggests a moderation in global sugar production following the higher output expected in the previous season. The USDA projects global sugar production in Brazil, the European Union, the United States, and Thailand expected to outweigh production gains in India. Global trade is also projected to soften slightly, while ending stocks are forecast to improve, supported by higher inventories in major consuming countries.

Major Sugar Producers

United States

U.S. sugar production is forecast to decline slightly to 8.0 million tonnes, while imports are expected to increase to 3.0 million tonnes, driven by quota commitments and higher imports from Mexico. Domestic consumption is projected to remain unchanged, with lower production resulting in a decline in closing stocks.

Brazil

Brazils sugar production is forecast to decline to 42.5 million tonnes as a greater proportion of sugarcane is expected to be used for ethanol production, supported by strong domestic demand and higher ethanol blending requirements. Consequently, both sugar consumption and exports are projected to decline.

European Union

European Union sugar production is forecast to decline to 14.4 million tonnes due to reduced sugar beet cultivation, driven by weak market prices and high input costs. Consequently, imports are expected to increase, exports to decline, and domestic consumption to remain largely unchanged.

European Union sugar production is forecast to decline to 14.4 million tonnes, primarily due to lower sugar beet acreage as weak sugar prices and elevated input costs prompt growers to shift to alternative crops.

China

Chinas sugar production is forecast to remain largely unchanged at 12.7 million tonnes, supported by favourable growing conditions and stable acreage under sugarcane and sugar beet cultivation.

Thailand

Thailands sugar production is forecast to decline to 9.5 million tonnes as lower farm-gate prices have led to a reduction in sugarcanecultivation.Despitelowerproduction,bothdomestic consumption and exports are expected to remain stable.

The global sugar market is expected to remain well supported by steady demand, while exports are projected to moderate and closing stocks are expected to increase only marginally. Strategic export opportunities and regional weather patterns will remain key determinants of price stability and inventory trends in the coming year.

Outlook

Overall, the global sugar market is expected to remain broadly balanced in SY27, with global sugar production projected at 184.9 million tonnes. Lower production in key producing regions is expected to be partly offset by higher output in India. In Brazil, a greater diversion of sugarcane towards ethanol, supported by strong domestic demand and higher blending requirements, is likely to reduce sugar production and exports, influencing global supply dynamics. Global exports are forecast to moderate to 62.6 million tonnes, while closing stocks are expected to increase marginally, supported by higher inventories in India and China. Going forward, weather conditions, government policy measures, and the sugar-ethanol production mix will remain key drivers of global sugar availability and price trends.

Indian Sugar Market

The Indian sugar industry witnessed a recovery during SY26, supported by improved production in key sugar-producing states. As of 30 April 26, sugar production stood at 27.53 million tonnes, compared with 25.65 million tonnes during the corresponding period of the previous season, reflecting a growth of around 7%. While production in Uttar Pradesh moderated, higher output in Maharashtra and Karnataka more than compensated for the decline, contributing to the overall increase in production.

For SY26, Indias gross sugar production is estimated at 31.1 million tonnes, compared with 29.6 million tonnes in the previous season. After diverting an estimated 3.1 million tonnes towards ethanol production, net sugar production is expected to remain at around 28.0 million tonnes. With domestic consumption estimated at 28.3 million tonnes and exports of 0.7 million tonnes, closing stocks are projected at around 4.3 million tonnes, representing nearly two months of domestic consumption.

Source: ICRA Research

State-wise net sugar production yearly trend in Million MT

Sugar production in SY2026 stood at 27.53 million MT as of April 30, 2026, representing a 7% year-on-year increase. The higher output was supported by improved sugarcane availability and better yields across the major sugar-producing states. Maharashtra remained the largest sugar-producing state during the season, followed by Uttar Pradesh and Karnataka. The state-wise production trend is presented below.

State-wise net sugar production yearly trend (Million MT)

Domestic sugar prices remained firm during FY2025–26, supported by steady demand and balanced market fundamentals. In Uttar Pradesh, sugar prices were largely stable at H40–41/kg during May–June 2026. Prices in 9MSY2026 stood at H40/kg, representing a 3% increase over the corresponding period of the previous season.

The Indian sugar industry witnessed significant developments during SY26, shaped by policy measures, ethanol blending progress and evolving market dynamics.

Revision in Sugar Export Policy

The Government of India revised its sugar export policy by changing the export status of raw, white, and refined sugar from "Restricted" to "Prohibited" until 30 September 2026. The measure was introduced to ensure adequate domestic sugar availability, contain inflationary pressures, and address supply-side risks arising from prevailing agro-climatic conditions.

Revision in Sugarcane Pricing

The Government revised sugarcane procurement prices for the 2025–26 crushing season to strengthen farmer remuneration. The Fair and Remunerative Price (FRP) was increased by H15 per quintal to H355 per quintal, while the State Advised Price (SAP) by H30 per quintal, taking prices to H400 per quintal for early varieties and H390 per quintal for general varieties.

Acceleration of the Ethanol Blending Programme

The Ethanol Blended Petrol (EBP) Programme achieved the 20% blending target during 2025–26, five years ahead of the original 2030 timeline. Continued policy support for ethanol procurement and the expansion of distillation capacity strengthened the biofuels ecosystem, creating additional growth opportunities for integrated sugar and ethanol producers.

Proposed Revision to the Sugarcane (Control) Order

TheGovernmentproposedtheDraftSugarcane(Control)Order, 2026 to replace the six-decade-old regulatory framework governing the sugar sector. The draft recognises ethanol as a core output of sugar mills, retains the Fair and Remunerative Price (FRP) mechanism, and introduces an equivalence framework for ethanol production in regulatory assessments.

Outlook

The Indian sugar industry is expected to navigate a year of heightened weather-related uncertainty. The India Meteorological Department (IMD) has indicated the likely development of El Ni?o conditions during the 2026 southwest monsoon, increasing the probability of below-normal rainfall across key agricultural regions. This could affect cane yields and sugar recovery, particularly in rain-fed areas of Maharashtra and Karnataka, while irrigation-supported regions such as Uttar Pradesh are expected to remain relatively resilient. At the same time, industry estimates indicate that sugar inventories are likely to remain adequate to meet domestic demand, supporting price stability despite a potentially tighter supply scenario. Looking ahead, the sectors performance will increasingly depend on improving farm productivity through higher-yielding cane varieties, better water-use efficiency, mechanisation and climate-resilient agronomic practices. These structural interventions are expected to strengthen the industrys ability to mitigate weather-related risks and support sustainable long-term growth.

Global Ethanol Industry

According to the Renewable Fuels Association (RFA), global ethanol production reached a record 32 billion gallons in 2025, supported by robust demand and favourable policy frameworks. The United States remained the largest producer, with record output of 16.49 billion gallons, driven by strong domestic consumption and export demand. Policy support continued to underpin industry growth, particularly through renewable fuel mandates and blending programmes. In the U.S., the expansion of E15 (15% ethanol-blended petrol) and renewable fuel standards further strengthened ethanol consumption and reinforced the transition towards lower-carbon fuels.

Overall, the global ethanol industry remained supported by favourable policy measures and sustained demand. Blending mandates, export growth, and the continued shift towards cleaner energy sources helped maintain production at record levels during the year.

Annual World Fuel Ethanol Production (Million Gallons)

Region	ESY21	ESY22	ESY23	ESY24	ESY25
United States	15016	15361	15580	16225	16494
Brazil	7240	7400	8610	8980	8650
India	830	1020	1420	1840	2600
European Union	1380	1430	1410	1480	1500
China	900	960	1070	1170	1030
Canada	434	447	454	464	472
Thailand	350	380	360	360	390
Argentina	270	310	310	310	330
Rest of World	470	482	506	531	534
Total	26890	27790	29720	31360	32000

Source: Renewable Fuels Association

Indian Ethanol Market

India is the worlds third-largest producer and consumer of ethanol, with production capacity expanding significantly over the past decade. The Indian ethanol market has undergone a structural transformation in 2026, driven by strong policy support and accelerated implementation of the Ethanol Blending Petrol (EBP) Programme. Under EBP, ethanol blending in petrol increased from less than 1.5% in Ethanol Supply Year (ESY) 2013–14 to 20% in ESY 2025–26, enabling India to achieve its blending target five years ahead of schedule. Ethanol procurement under the programme is projected to exceed 1,200 crore litres in ESY 2025–26, compared with approximately 38 crore litres in ESY 2013–14. Supported by sustained policy interventions and investments across the value chain, the countrys ethanol production capacity has expanded nearly fivefold, from 421 crore litres in 2014 to approximately 2,000 crore litres per annum in 2026. The rapid scale-up has enhanced domestic energy security by reducing dependence on imported crude oil, generated substantial foreign exchange savings, lowered greenhouse gas emissions, and created additional income opportunities for farmers through diversified feedstock demand.

Ethanol Blending Trend

Feedstock Diversification

A defining feature of Indias ethanol transition has been the diversification of feedstocks used for ethanol production. While the industry was historically dependent on sugarcane-based feedstocks, successive policy measures have expanded the approved feedstock basket to include B-heavy and C-heavy molasses, sugarcane juice, sugar syrup, maize, damaged food grains and surplus rice from the Food Corporation of India (FCI). This diversified feedstock strategy has reduced dependence on a single crop, enhanced year-round availability of ethanol, improved the resilience of the supply chain, and enabled capacity utilisation across both sugar-based and grain-based distilleries. It has also strengthened the industrys ability to sustainably meet blending targets while creating additional value streams for the agricultural sector.

	Consolidated
Feed Stock	21-22	22-23	23-24	24-25	25-26 (Provisional)
C – Molasses	46.66	49.41	56.28 (Incentive of 6.87)	57.97	57.97
B – Molasses	59.08	60.73	60.73	60.73	60.73
Sugarcane Juice/Sugar Syrup	63.45	65.61	65.61	65.61	65.61
Damaged Food Grains	52.92	64.09	64	64	64
FCI Rice	56.87	58.5	58.5	58.5	60.32
Maize	52.92	66.07	71.86 (Incentive of 5.79)	71.86	71.86

Source: Ministry of Petroleum & Natural Gas, PIB - 2026

According to the latest data released by the All India Distillers Association (AIDA), cumulative ethanol supplies reached 717 crore litres by June 2026, representing 68% of the contracted volume of 1,048 crore litres for the ongoing ESY 2025–26. Grain-based feedstocks accounted for approximately 67% of total ethanol supplied, while sugarcane-based feedstocks contributed the remaining 33%. Maize emerged as the single largest feedstock, reflecting the growing role of grain-based ethanol in supporting Indias biofuel programme and enhancing feedstock security.

	Ethanol Produced (Cr Liters)
Raw Material	(Till Jun 26)
Maize	258
Surplus FCI Grains	177
Sugarcane Juice	144
B-Heavy Molasses	82
Damaged Food Grains	45
Other Sugar-Based Feedstocks*	11
Total Ethanol Supplied	717

*Primarily comprises C-heavy molasses and other minor sugar-based feedstocks. Source: Ministry of Petroleum & Natural Gas, PIB - 2026

Outlook

With the successful achievement of E20 blending, the focus is now shifting towards deepening the biofuel ecosystem and supporting higher ethanol blends through continued policy support, vehicle readiness, and infrastructure development. The Government has indicated that future efforts will include expanding flex-fuel vehicle adoption, strengthen domestic feedstock availability, and exploring higher ethanol blends beyond E20. At the same time, continued investments in dedicated ethanol plants, storage infrastructure, and distribution networks are expected to reinforce supply security and support Indias long-term objectives of enhancing energy independence, reducing carbon emissions, and creating sustainable value for the agricultural sector.

Global Real Estate Outlook

The global real estate sector demonstrated signs of gradual recovery and stabilisation during FY2025–26, supported by easing inflationary pressures and relatively stable interest rates across major economies. Investment activity continued to improve, albeit at an uneven pace, with investors placing greater emphasis on asset quality, income resilience, and long-term value creation. North America witnessed a steady recovery, underpinned by improving capital flows and sustained demand for high-quality logistics and residential assets. In Europe, investment sentiment remained measured amid subdued economic growth and tighter financing conditions, although prime assets continued to attract capital. Asia Pacific remained the strongest growth market, supported by rapid urbanisation, resilient domestic demand, and expanding investment in industrial, logistics, and data centre assets.

Structural shifts continue to redefine the global real estate landscape, with sustainability, digital transformation, and changing customer preferences shaping investment decisions. Demand is increasingly concentrated in premium, flexible, and energy-efficient developments, particularly across the office sector, as occupiers prioritise quality and operational efficiency. While geopolitical uncertainty and macroeconomic risks continue to influence market sentiment, the industry remains cautiously optimistic, with capital increasingly directed towards resilient, high-quality, and future-ready real estate assets.

Global real estate capital flows 2007-2025 (USD Billions)

Source: Emerging trends in real estate market 2026 – PWC

The global real estate financing environment improved during FY2025–26, supported by strengthening capital market conditions, easing financing constraints, and a gradual recovery in investor confidence. Moderating inflation and a more stable interest rate environment across several major economies enhanced liquidity and improved access to capital, enabling higher investment activity despite persistent geopolitical and macroeconomic uncertainties.

Reflecting this favourable financing environment, global direct real estate investment volumes rose by 18% year-on-year to US$216 billion in the first quarter of 2026. Asia Pacific emerged as the strongest growth market, followed by robust investment activity in the Americas, while Europe remained resilient despite a high base in the corresponding period of the previous year.

Cross-border capital flows also strengthened during the year, signalling renewed investor confidence and improved access to global capital. Capital deployment remained well distributed across EMEA, the Americas, and Asia Pacific, highlighting the resilience of global real estate capital markets. While geopolitical developments and refinancing pressures continued to influence investment decisions, sustained capital flows into quality assets reflected investors growing preference for stable, long-term opportunities.

Core fund allocations by sectors

Global capital allocation continued to favour real estate sectors supported by long-term structural demand and resilient operating fundamentals. Industrial and logistics assets remained among the most attractive investment segments, driven by ongoing supply chain optimisation and the continued expansion of e-commerce. The living sector - including multifamily, build-to-rent, and student housing, also attracted significant institutional investment, supported by favourable demographic trends and stable rental demand.

Alternative real estate sectors further strengthened their position within global investment portfolios. Data centres remained among the fastest-growing asset classes, driven by accelerating cloud adoption, increasing digitalisation, and rising demand for artificial intelligence infrastructure. Healthcare, life sciences, and self-storage assets also continued to attract strong investor interest, supported by stable demand, sustainable cash flows, and favourable long-term growth prospects.

Overall, investment activity continued to be shaped by changing market dynamics and long-term structural trends. As a result, capital remained concentrated in sectors offering resilient demand, stable income potential, and sustainable growth opportunities.

Indian Real Estate Market

Indias real estate sector continued to play a significant role in economic growth during FY2025–26, supported by sustained infrastructure development and rapid urbanisation. The Government of India maintained its focus on infrastructure-led growth through a capital expenditure outlay of H11.21 lakh crore in the FY2025–26 Union Budget. This commitment has been reinforced in the FY2026–27 Union Budget, with the capital expenditure outlay increased to H12.22 lakh crore, reflecting the continued emphasis on infrastructure as a key driver of economic growth.

The Government also continued to prioritise housing and urban development. Flagship initiatives such as Pradhan Mantri Awas Yojana–Urban (PMAY-U) remained focused on expanding affordable housing and improving housing accessibility. In the FY2026–27 Union Budget, the Ministry of Housing and Urban Affairs (MoHUA) received an allocation of H85,522 crore, with a significant increase in funding for PMAY-U 2.0 and continued support for urban infrastructure and transitoriented development.

Supported by these policy measures and continued infrastructure investment, Indias real estate market remained resilient across key segments during the year. The residential real estate segment remained a key growth driver, supported by favourable demographics, rising urbanisation, and increasing household incomes. Commercial real estate also recorded healthy demand, driven by the continued expansion of Global Capability Centres (GCCs), the BFSI sector, and flexible workspace operators. Infrastructure development and the growth of e-commerce continued to support logistics and industrial assets, while increasing digital adoption accelerated investments in emerging asset classes such as data centres.

Institutional investment remained healthy during the year, supported by improving asset quality, stable returns, and growing participation through Real Estate Investment Trusts (REITs). Although elevated property prices, global economic uncertainty, and tighter financing conditions continued to pose near-term challenges, the sector remains well positioned for long-term growth, supported by sustained infrastructure investment and evolving demand across residential, commercial, and emerging real estate segments.

Residential Sales and Launches

Indias residential real estate market entered a phase of calibrated growth during FY2025–26 following the strong post-pandemic expansion witnessed over the previous three years, during which residential sales value recorded a compound annual growth rate (CAGR) of 26% between FY2022 and FY2025. While sales value growth moderated to an estimated 5–7% in FY2026, supported by continued price appreciation, demand remained broadly stable amid elevated property prices and delays in project launches in certain markets due to regulatory approval challenges.

Demand continued to be driven by the premium and luxury housing segments, reflecting evolving homebuyer preferences for larger homes and enhanced amenities. These segments also remained attractive for developers due to stronger realisations and margins. Healthy customer collections and timely project execution continued to support robust operating cash flows, enabling developers to maintain disciplined leverage and strengthen their credit profiles.

Looking ahead, residential sales value growth is expected to moderate further to 4–6% in FY2027, as both price appreciation and demand stabilise after a period of strong expansion. Average selling prices, which recorded a CAGR of 11% between FY2022 and FY2025 and are estimated to increase by 7–9% in FY2026, are expected to grow at a more sustainable 3–5% in FY2027 owing to the high base. Demand growth is also likely to remain stable amid affordability considerations, while easing approval processes and a gradual recovery in project launches are expected to support overall market activity. Despite a moderation in growth, the sectors fundamentals remain healthy, supported by resilient demand in the premium housing segment and strong cash flow generation.

Trend of sales, demand and average selling price

Note: Pan-India refers to top 7 cities of India only. Rounding may result in minor variations between the stated and calculated values.

Source: Anarock Research, Indian Residential Market Annual Update

Net Absorption in the Warehousing Market

Indias warehousing market continued to witness strong growth during the year, supported by sustained demand for modern logistics infrastructure and expanding institutional participation. Demand for Grade A warehousing continued to remain robust, supported by the rapid expansion of e-commerce, organised retail, manufacturing, and domestic consumption. These structural drivers are expected to sustain healthy net absorption and support the continued expansion of Indias warehousing market.

Reflecting this momentum, the overall warehousing stock is projected to expand by 12–14% year-on-year to 550–570 million sq. ft. by March 2027. The Grade A warehousing segment is expected to outpace the broader market, with stock projected to reach 310–320 million sq. ft. by March 2027, supported by increasing institutional investment and rising demand for modern, efficient, and ESG-compliant facilities.

Market dynamics, however, continue to vary across key warehousing hubs. Delhi-NCR and Mumbai together account for around 40% of the countrys total warehousing stock, although a significant share comprises older Grade B assets developed before the shift towards modern logistics infrastructure. In contrast, Pune and Chennai have emerged as leading Grade A warehousing markets, accounting for nearly 37% of Indias Grade A stock, with approximately 82% of their warehousing capacity comprising Grade A facilities. Demand in these markets continues to be driven by the automotive and auto ancillary industries, reinforcing their position as key logistics and manufacturing hubs.

Trends in supply (Top 8 cities)

Source: ICRA Research, Various IPCs;

Net Absorption in the Office Market

Indias office market continued to demonstrate strong momentum, supported by sustained demand from Global Capability Centres (GCCs), flexible workspace operators, technology firms, and financial services companies.

Demand remained broad-based across major cities, with Bengaluru leading office absorption, supported by the conversion of pre-committed space in newly completed developments and continued expansion by Global Capability Centres. Hyderabad, Mumbai, Delhi NCR, and Pune also recorded healthy leasing activity, with GCCs emerging as the primary demand driver in Bengaluru, Hyderabad, Chennai, and Mumbai, while flexible workspace operators accounted for a significant share of leasing in Pune and Delhi NCR. This reflects the growing preference for agile workplace strategies alongside continued expansion of multinational occupiers.

The medium-term outlook for the office market remains positive. Indias deep talent pool, competitive operating costs, expanding innovation ecosystem, and favourable policy environment continue to strengthen its position as a preferred destination for global capability centres and knowledge-based industries. Supported by a healthy pipeline of institutional-quality office developments, tightening vacancies in prime micro-markets, and sustained demand from GCCs and flex operators, the office sector is expected to maintain healthy absorption levels and remain on a long-term growth trajectory.

Business Performance

Overview of ZILs Financial Performance

Zuari Industries Limited (ZIL) is the apex holding company of the Adventz Group, with an operational fully integrated Sugar, Power & Ethanol plant and substantial land holdings in Goa. The Company delivered a strong financial performance during FY2025–26, driven by improved operational efficiencies, disciplined cost management and a lower cost of borrowing.

On a standalone basis, the Company reported total income of H994.9 crore during FY2025–26. EBITDA increased by 6.8% year-on-year to H191.5 crore, while Profit Before Tax (before exceptional items) rose by 70.0% to H54.1 crore. The Company reported a Profit After Tax (PAT) of H12.1 crore, compared with a loss of H37.4 crore in the previous year.

On a consolidated basis, total income stood at H1,155.1 crore. Consolidated EBITDA grew by 12.2% to H181.0 crore, while Profit Before Tax (before exceptional items) improved to H131.5 crore, compared with a loss of H67.8 crore in FY2024–25. Consolidated Profit After Tax (PAT) stood at H105.8 crore, against a loss of H94.4 crore in the previous year. The improvement in earnings was supported by stronger operating performance across businesses, continued financial discipline and optimisation of the Companys capital structure through lower borrowing costs.

The Companys standalone financial performance for FY2025–26 is summarised in the table below.

Parameter (J Cr)	FY26	FY25
Revenue from Operations	874.3	870.7
Other Income	120.6	109.3
Total Income	994.9	979.9
EBITDA	191.5	179.3
Operating EBITDA	70.8	70.0

The Company remains committed to delivering long-term value by driving operational excellence, unlocking synergies across its portfolio, and capitalising on emerging growth opportunities.

Segment Wise Performance

Performance of SPE Division

Our Sugar, Power & Ethanol (SPE) Division operates a modern, fully integrated manufacturing facility at Gobind Sugar Mills, Aira, in Lakhimpur Kheri, Uttar Pradesh. The integrated complex comprises a 10,000 TCD sugar mill, a 500 TPD sugar refinery, a 40 MW cogeneration power plant, and a 125 KLPD distillery. Over the years, the Division has evolved into a fully integrated business, with sugar manufacturing, cogeneration, ethanol production, and sugar refining operating as a unified value chain. This integrated operating model has enhanced operational flexibility, enabled greater value realisation from by-products, and strengthened the Divisions ability to respond to changing market dynamics.

Building on this integrated platform, the Division continues to focus on maximising asset utilisation, improving operational efficiency, and driving productivity across its operations. Through continuous process improvements, technology-led initiatives, and disciplined operational practices, the Company remains committed to strengthening sustainability, enhancing competitiveness, and creating long-term value for its stakeholders.

The Sugar, Power & Ethanol (SPE) Division delivered a resilient operational performance during FY2025–26, underpinned by improved cane availability, strong plant performance, and continued operational discipline across the integrated value chain. These efforts enabled the Division to achieve its highest-ever annual crushing of 159.7 lakh quintals, while total cane crushed during the season reached a record 163.7 lakh quintals. The mill also recorded its highest-ever capacity utilisation of 101.7%, reflecting improved plant reliability and efficient operations throughout the crushing season.

While sugar recovery moderated to 10.26% from 10.61% in the previous year, in line with lower recovery trends across the region, the Division maintained a strong operational performance. Sugar production for FY2025–26 stood at 14.4 lakh quintals, while seasonal sugar production increased by 13% to 14.8 lakh quintals, supported by higher cane throughput. Sugar sales during the year stood at 14.3 lakh quintals, and improved market conditions contributed to higher average sugar realisations of H4,053 per quintal, compared with H3,894 per quintal in the previous year.

The Divisions integrated business model continued to support stable performance across its allied businesses. Ethanol production increased by 10.1% to 37,276 KL, while sales stood at 36,253 KL, with average realisations remaining healthy at H62.6 per litre. Power exports stood at 857 lakh units, compared with 907 lakh units in the previous year.

Overall, the Divisions performance reflects its continued focus on strengthening cane availability and enhancing operational efficiency across the integrated sugar value chain. Through sustained investments in cane development, process optimisation, and operational excellence, the Company remains well positioned to drive sustainable growth and create long-term value for its stakeholders.

The following section outlines the key operational parameters reflecting this improved performance

Particulars	FY26	FY25
Total Cane Crushed (LQ)	159.7	157.2
Sugar Recovery %	10.26%	10.61%
Sugar Production (LQ)	14.4	14.7
Ethanol Production (KL)	37,276	33,869
Power Generation (LU)	1,575	1,652

Technology continued to play an important role in the Divisions operational transformation. During the year, the Company further expanded its digital ecosystem across the sugar value chain to strengthen farmer engagement, improve operational efficiency, and support real-time decision-making.

Farmer Engagement & Cane Development:The Saksham App continued to strengthen engagement with growers by enabling timely communication, grievance resolution, and dissemination of crop-related information. Complementing this, Sangam, a digital platform for farm mechanisation, enables farmers to access mechanised equipment and service providers through a structured marketplace, improving operational efficiency and field productivity. The Company is also exploring the application of Artificial Intelligence to digitally identify sugarcane varieties and detect disease-prone crops at an early stage, enabling more targeted agronomic interventions.

Manufacturing & Operational Excellence: The Company further strengthened its digital manufacturing ecosystem by enhancing the capabilities of the SPE BI Cockpit, Critical Parameter App, and Ganna App, a digital solution for cane indenting and planning. These platforms provide real-time operational dashboards, monitor critical process parameters, optimise cane planning, and improve production analytics, enabling faster decision-making and greater operational control across the manufacturing process.

Logistics & Asset Management: During the year, the Company introduced Saarthi, a transporter management platform that enables better monitoring of transporter performance and strengthens coordination across the cane transportation network. The Company is also exploring the development of DigiLog, a centralised digital repository of plant machinery and equipment that will capture technical specifications, maintenance records, and asset history to strengthen asset management and support predictive maintenance.

Sales & Commercial Operations: The Company continued to digitise its commercial processes through Setu, an integrated sugar sales platform that enhances transparency across the sales cycle by bringing together market intelligence, pricing inputs, customer interactions, and stakeholder feedback, thereby enabling more informed and timely commercial decisions.

Collectively, these initiatives are laying the foundation for a smarter and more integrated sugar value chain by improving visibility, productivity, and decision-making across operations. Looking ahead, the long-term outlook for the Indian sugar industry remains positive, supported by continued policy emphasis on ethanol blending, greater mechanisation, and the adoption of digital technologies. While the possibility of El Ni?o conditions may impact cane yields and sugar recovery in certain regions, the Companys continued focus on strengthening cane availability, enhancing operational efficiency, and leveraging technology across the value chain positions the Division to navigate these challenges effectively. These strategic priorities are expected to further strengthen operational resilience, improve productivity, and support sustainable long-term value creation.

Risk Management: SPE Division Risk: Adverse Climatic Conditions

The potential development of El Ni?o conditions may result in below-normal rainfall, affecting sugarcane availability, crop yields and sugar recovery across certain growing regions. These conditions could have an impact on crushing operations and overall production. The Company continues to mitigate this risk through sustained investments in cane development and operational planning. Initiatives under the Cane Excellence Programme, including varietal replacement, scientific agronomic practices and mechanisation are aimed at strengthening cane availability, improving farm productivity, and supporting more resilient operations under changing climatic conditions.

Risk: Low Yield

Sub-optimal cane productivity remains a key operational risk, with implications for sugar recovery as well as ethanol and power production. The Company continues to address this through focused agronomic interventions aimed at improving farm productivity. Demonstration plots, scientific soil health management, precision nutrient application, and structured farmer training programmes encourage the adoption of best cultivation practices. These initiatives support higher yields, improve crop quality, and enhance the overall productivity of the command area.

Risk: Regulatory Environment

The sugar industry continues to operate within a dynamic regulatory environment, where evolving government policies can influence cane pricing, ethanol procurement, and other industry parameters. To enhance operational flexibility, the Company continues to diversify its feedstock mix for ethanol production and optimise production planning in line with changing regulatory requirements. Continuous engagement with key stakeholders, supported by ongoing process improvements, enables the Company to respond proactively to regulatory developments while maintaining operational resilience.

Performance of Real Estate Division

The Companys Real Estate division primarily focuses on the monetisation of its land holdings in Goa. As at 31 March 2026, the non-bulk land inventory stood at 11.96 acres. There were no transactions in the bulk land portfolio during the year, with holdings remaining unchanged at 260 acres. The Company continues to evaluate monetisation opportunities in line with prevailing market conditions.

Risk Management: Real Estate Division Risk: Demand Volatility

Demand in the real estate sector remains sensitive to changes in the broader economic environment. Factors such as inflation, interest rates, employment levels, consumer sentiment, taxation policies, regulatory changes and movements in property prices can influence homebuyer demand and investment decisions. In addition, fluctuations in raw material prices may impact project costs and margins.

The Company continues to focus on timely execution and quality delivery of its projects through experienced contractors and established project management practices. It also maintains long-standing relationships with reliable suppliers and emphasises local sourcing, wherever feasible, to improve supply chain efficiency and manage input cost volatility. The Companys established brand and legacy continue to support customer confidence in a competitive market.

Risk: Interest Rate Risk

The real estate sector remains exposed to changes in interest rates, which can affect borrowing costs and overall market sentiment. Variations in interest rates may also influence financing costs, property valuations and investment activity. The Company closely monitors developments in the interest rate environment and adopts a prudent approach to financial planning and project execution. This enables it to respond to changing market conditions while maintaining financial discipline and operational stability.

Performance of Subsidiaries

	INCOME		EBITDA		PBT (Before Exceptional Items)
	FY26	FY25	FY26	FY25	FY26	FY25
Zuari Infra	175.8	98.4	159.4	77.1	68.1	(8.3)
ZIntl	145.0	200.6	32.0	45.5	(24.3)	(26.4)
ZMSL	37.2	40.5	0.8	8.8	(2.5)	0.03
Zuari Finserv	20.1	19.3	5.6	3.5	2.2	0.5
Zuari Insurance	11.5	8.4	7.6	4.9	7.5	4.9
Simon India	89.4	18.8	6.8	0.9	6.0	0.3
IFPL	1.6	5.6	(4.3)	3.6	(18.6)	(11.3)
Zuari Furniture	0.3	31.8	(3.0)	8.9	(8.5)	2.3
ZIAVPL	35.5	24.4	21.6	11.9	14.7	5.3
ZEBPL	13.1	1.3	(3.9)	(0.02)	(12.9)	(0.3)

Zuari Infraworld India Ltd. (ZIIL)

Zuari Infraworld marked a key milestone during the year with The St. Regis Residences, Downtown Dubai entering the handover and possession phase. The landmark project comprises 232 ultra-luxury residences developed under a 50:50 joint venture. The Company also continued to expand its Development Management Model, securing a new mandate in Bengaluru and progressing its existing projects in Hyderabad and Kolkata. This continued focus on the Development Management Model reinforces the Companys capital-efficient growth strategy and positions it well to pursue future development management opportunities.

Simon India Ltd. (SIL)

Simon India continued to strengthen its Engineering, Procurement and Construction (EPC) business by delivering specialised engineering solutions across its core sectors. During FY2025–26, the Company secured new orders worth H100.3 crore, including projects for Paradeep Phosphates Limited (PPL), HPCL-Mittal Energy Limited (HMEL) and Chambal Fertilisers and Chemicals Limited (CFCL). The Company also maintained steady progress in the execution of ongoing projects, supported by its engineering expertise, strong project management capabilities, and continued focus on timely delivery. Going forward, Simon India remains focused on expanding its order book, enhancing execution excellence, and leveraging opportunities across its core industries.

Zuari Finserv Ltd. (ZFL)

Zuari Finserv continued to strengthen its position as an integrated financial services platform by expanding its digital capabilities and broadening its customer offerings. During the year, the business launched Zuari Invest, a new mobile application providing customers with seamless access to a range of investment products, including mutual funds, bonds, and other financial instruments. The Company also undertook a comprehensive revamp of its website to enhance customer experience and digital accessibility. Alongside its retail offerings, Zuari Finserv continued to strengthen its focus on corporate financial solutions, successfully executing bulk and block deals during the year. These initiatives reflect the Companys continued emphasis on digital innovation, customer-centricity, and building a scalable platform to support sustainable growth.

Zuari Insurance Brokers Ltd. (ZIBL)

Zuari Insurance Brokers Limited (ZIBL) delivered a strong financial performance during FY2025–26, with revenue increasing by 38% year-on-year and EBITDA growing by 54% year-on-year, reflecting improved business momentum and operational efficiency. During the year, the Company successfully facilitated the settlement of outstanding insurance claims aggregating H165 crore, reinforcing its commitment to delivering timely and effective claims support to clients. The business also continued to strengthen its focus on improving renewal ratios, enhancing customer retention, and accelerating claim settlement timelines through a customer-centric approach and process improvements. These initiatives position the Company to drive sustainable growth while strengthening long-term client relationships.

Zuari International Ltd. (ZIntL)

Zuari International Limited continued to strengthen its operating capabilities by enhancing sales, distribution, and complianceprocesses.Duringtheyear,theCompanyexpanded its presence across quick commerce channels through partnerships with Zepto and Instamart, while broadening its consumer portfolio with the introduction of staples. Going forward, the Company will continue to pursue a phased expansion in the Punjab market while further strengthening its omnichannel distribution network through the onboarding of additional e-commerce platforms, including BigBasket, Blinkit, Amazon, and Flipkart.

Zuari Management Services Ltd. (ZMSL)

Zuari Management Services Limited (ZMSL) continued to strengthen its service offerings across payroll management, recruitment, and manpower outsourcing. During the year, the Company implemented Adrenalin, a new Human Resource Management System (HRMS), across Zuari Industries Limited and its subsidiaries, replacing the existing platform and supporting the rollout of additional HR modules. Alongside this, the Company continued to focus on expanding its external client base and strengthening its recruitment capabilities.

Performance of JVs

Zuari Envien Bio-Energy Pvt Ltd (ZEBPL)

Zuari Envien Bio-Energy Private Limited (ZEBPL) achieved a significant milestone during the year with the commissioning of its 180 KLPD grain-based ethanol plant on 1 Jan 26. Commercial production commenced during the year, and the plant has since been stabilised, establishing a strong foundation for sustained operations. During the year, the Company secured orders from non-OMC customers pending the second OMC tender. The long-term outlook for the business continues to be supported by the Governments policy initiatives to promote ethanol blending and strengthen Indias biofuel ecosystem. Going forward, the Company will focus on optimising feedstock sourcing, enhancing operational efficiencies, and maximising plant utilisation.

Zuari IAV Pvt. Ltd. (ZIAVPL)

Zuari IAV Private Limited recorded revenue of H35.5 crore during FY26, compared with H24.4 crore in the previous year. EBITDA increased to H21.6 crore from H11.9 crore, while Profit Before Tax (PBT) rose to H14.7 crore from H5.3 crore. During the year, the Company achieved its highest-ever throughput, driven by higher volumes received and dispatched. The renegotiation of OMC agreements also contributed to improved margins.

Performance of Strategic Investments

Our associate companies, predominantly operating in the agrochemicals, fertilisers, rail and infrastructure segments, delivered steady performance during FY2025–26. Paradeep Phosphates Limited recorded 28% year-on-year growth in total income, reaching H21,973 crore. On a consolidated basis, Chambal Fertilisers & Chemicals Limited reported total income of H20,920 crore, reflecting 24% year-on-year growth, while Texmaco Infrastructure & Holdings Limited reported total income of H41 crore, registering 24% year-on-year growth.

	Value (J	Cr)
	31-Mar-25	31-Mar-26
Chambal Fertilizers & Chemicals Ltd.	3,177	2,538
Zuari Agro Chemicals Ltd.	247	244
Paradeep Phosphates Ltd.*	-	6
Mangalore Chemicals & Fertilizers Ltd.*	5	-
Texmaco Rail & Engineering Ltd.	871	509
Texmaco Infrastructure and Holdings Ltd.	401	384
Total Value of Quoted Investments	4,701	3,681

*Merger between PPL & MCFL

The combined value of quoted investments held by the Company and its wholly owned subsidiaries stood at H3,681 crore as on 31 March 2026. The valuation of the investment portfolio was influenced by prevailing market conditions, including geopolitical developments during the year. The Company continues to actively manage its strategic investment portfolio to create long-term value and support its growth and diversification strategy.

Key Financial Ratios

The table below presents the key financial ratios for FY26.

Ratio	Value	% Change over FY25	Remark
Debtors Turnover	18.16	-21%	-
(Net sales divided by average trade receivables)
Inventory Turnover	1.46	-3%	-
(Net sales divided by average Inventory)
Interest Coverage Ratio	1.22	55%	Increase due to increase in profit during the year as compared to loss in last FY
(Earnings before Interest and Tax (EBIT) divided by Interest Expense)
Current Ratio	0.69	-35%	Decrease due to increase in current maturities of long-term borrowings during the current year.
(Current assets divided by Current Liabilities)
Debt Equity Ratio	0.37	33%	Increase due to reduction in equity from decline in FVTOCI reserve on investments.
(Total debt (incl. lease liabilities) divided by
Total shareholders equity)
Return on Equity Ratio	0.34%	-131%	Improvement in ratio attributable to profit earned during the current year as against loss incurred in the previous year.
(Net profit after tax divided by Average shareholders equity)
Operating Profit Margin (%)	15.58%	40%	Increase due to increase in profit during the year as compared to loss in last FY
(Earnings before Interest and Tax (EBIT) divided by Revenue from Operations)
Net Profit Margin (%)	1.4%	-132%	Improvement in ratio due to profit earned during the current year as compared to loss incurred in the previous year.
(Net profit after tax divided by Net sales)

Other Business Risk Management

In addition to business-specific risks, the Company is exposed to a range of enterprise-wide risks, including regulatory, liquidity, climate, cyber security, market and credit risks. These risks are periodically reviewed by the Audit Committee, which oversees the effectiveness of the Companys risk management framework and mitigation measures. The key risks and the Companys approach to managing them are outlined below.

Regulatory Risk

The Company operates in a dynamic regulatory environment and remains committed to complying with all applicable laws and regulations. It continuously monitors changes in the regulatory landscape, including corporate, taxation, environmental and foreign exchange regulations, and strengthens internal processes to ensure timely compliance and effective governance.

Climate Risk

Climate-related events continue to present operational challenges across the Companys businesses. In the real estate segment, adverse weather conditions may affect construction schedules and site productivity, while in the Sugar, Power and Ethanol business, rainfall variability and changing climatic conditions can influence sugarcane availability, yield and quality. The Company integrates weather-related assessments into its operational planning and works closely with growers to minimise the impact of climate-related disruptions.

Cyber Security Risk

The Company continues to strengthen its cyber security framework to safeguard critical systems, business operations and sensitive information. Regular security assessments, continuous network monitoring, robust backup mechanisms and periodic system upgrades help enhance cyber resilience and support the secure operation of digital infrastructure.

Market Risk

The Company is exposed to market risks arising from movements in interest rates, commodity prices and foreign exchange rates.

Interest Rate Risk: Borrowings, particularly those linked to floating interest rates, are exposed to changes in market interest rates. The Company manages this exposure through prudent debt management and appropriate hedging strategies, wherever considered necessary.

Foreign Currency Risk: The Company currently has no foreign currency borrowings and, therefore, has limited direct exposure to fluctuations in foreign exchange rates.

Inventory Price Risk: Key commodities such as sugar and ethanol remain exposed to price volatility. While ethanol prices are largely regulated, sugar prices are influenced by government policies, cane pricing, and prevailing market dynamics. The Company continuously monitors market trends and aligns its sales strategy to effectively manage pricing risks.

Credit Risk

Credit risk primarily arises from trade receivables, loans, bank balances and other financial assets. The Sugar, Power and Ethanol business mitigates this risk through a predominantly cash-and-carry model for sugar sales. Power sales are backed by long-term power purchase agreements with state utilities, while ethanol supplies are made primarily to Oil Marketing Companies, resulting in relatively low credit risk.

Liquidity Risk

Maintaining adequate liquidity to meet operational requirements and financial commitments remains a key priority. The Company adopts a disciplined approach to cash flow planning, supported by regular monitoring of working capital, healthy liquidity buffers and efficient collection mechanisms, enabling financial flexibility and business continuity.

Human Resource

The Company recognises its people as a critical driver of long-term success and remains committed to building a skilled, agile and future-ready workforce. During FY26, the Company continued to strengthen an inclusive and performance-oriented work environment founded on integrity, collaboration and equal opportunity. Talent management initiatives remained focused on attracting, developing and retaining high-quality talent, while fostering a culture of continuous learning and employee engagement. The Company also sustained harmonious industrial relations across all its operating locations. Digital HR platforms continued to enhance process efficiency, improve employee experience and support evolving workplace requirements. Employees are encouraged to take ownership of their responsibilities, with performance supported through structured goal setting, continuous feedback, capability development and recognition programmes. As on 31 March 2026, the Company had 613 permanent employees on its rolls.

Internal Control System and Their Adequacy

The Company maintains a robust internal control framework designed to support the efficient conduct of its operations and safeguard its assets. The framework is commensurate with the nature, scale and complexity of the Companys business and facilitates the effective monitoring of financial transactions, compliance with applicable laws and regulations, and operational effectiveness. Internal audits are carried out by an independent firm of Chartered Accountants in accordance with a risk-based audit plan. The observations arising from these audits, together with the corrective actions taken by the management, are periodically reviewed by the Audit Committee. The Audit Committee also evaluates the adequacy and effectiveness of the Companys internal control systems and monitors the implementation of recommendations, wherever necessary.

Cautionary Statement

This Management Discussion and Analysis Report contains certain statements relating to the Companys future business prospects, objectives, estimates, expectations and projections, which may constitute forward-looking statements within the meaning of applicable securities laws and regulations. These statements are based on assumptions, expectations and information currently available to the Company. Actual results may differ materially from those expressed or implied due to various risks and uncertainties. Factors that may influence the Companys performance include changes in global and domestic economic conditions, government policies and regulations, taxation, availability and pricing of raw materials, market prices of finished goods, geopolitical developments, and adverse climatic or other unforeseen events. The Company undertakes no obligation to publicly update or revise any forward-looking statements to reflect subsequent events, new information or future developments, except as required under applicable law.

References

Global Economy

1. World Economic Outlook, April 2026; Global Economy in the Shadow of War; April 14, 2026 2. https://www.imf.org/external/datamapper/PCPIPCH@WEO/OEMDC/WEOWORLD/ADVEC 3. https://clubofmozambique.com/wp-content/uploads/2026/06/GEP-Jun-2026.pdf

Indian Economy

4. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2269286&lang=1&reg=48&utm_source

5. https://web-assets.bcg.com/7a/f0/a65c00624bfe8cc92347c66032cf/iem-may26.pdf

6. https://groww.in/blog/rbi-keeps-repo-rate-unchanged-maintains-neutral-stance-amidst-global-uncertainty 7. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2252272&lang=1&reg=3 8. https://www.newindianexpress.com/business/2026/Aug/05/rbi-holds-repo-rate-at-525-projects-gdp-growth-of-67

Global Sugar Market

9. https://www.chinimandi.com/season-2025-26-iso-sees-sees-global-surplus-of-just-1-625-million-tonnes/

10. Sugar: World Markets and Trade USDA Foreign Agricultural Service

Indian Sugar Market

11. https://www.chinimandi.com/isma-data-shows-all-india-sugar-production-at-about-275-lmt-7-higher-than-corresponding-period-calls-for-fast-rollout-of-ffvs/

12. h t t p s : / / a n i n e w s . i n / n e w s / b u s i n e s s / i n d i a - b a n s - s u g a r - e x p o r t s - w i t h - i m m e d i a t e - e f f e c t - u n t i l -september-202620260514082533/

13. https://www.deccanherald.com/amp/story/india/cabinet-approves-sugarcane-frp-by-441-to-rs-355qtl-for-2025-26-3518799

14. https://taxguru.in/corporate-law/ethanol-blending-india-policy-evolution-milestones-key-concerns.html

15. https://www.chinimandi.com/india-moves-to-overhaul-six-decade-old-sugarcane-law-proposes-sweeping-2026-control-order/

Global Ethanol Market

16. https://ethanolrfa.org/markets-and-statistics/annual-ethanol-production

17 https://www.fas.usda.gov/data/commodities/biofuels

Indian Ethanol Market

18. Press Release Page Press Information Bureau

Global Real Estate Market

19. https://www.pwc.com/us/en/industries/financial-services/asset-wealth-management/real-estate/emerging-trends-in-real-estate-pwc-uli.html

20. https://www.jll.com/en-us/insights/market-dynamics/industrial-market-statistics-trends

Indian Real Estate Market

21. https://www.crisilratings.com/en/home/newsroom/press-releases/2026/03/residential-realty-sales-growth-to-moderate-slightly-to-4-6percent-in-fiscal-2027.html

22. https://websitemedia.anarock.com/media/Q1_2026_Pan_India_Residential_Market_Viewpoints_ffcfe5100a.pdf

23. https://www.jll.com/en-in/insights/indias-industrial-real-estate-evolution