# 1. Financial Performance ## A. Key Figures * **Total Income:** **₹461.9 Cr** Q3 FY26 (+2.5% YoY) · **₹1430.2 Cr** 9M FY26 (+10.1% YoY) * EBITDA: ₹45.1 Cr Q3 FY26 (+14%) · ₹47.2 Cr 9M FY26 (vs. ₹1.4 Cr loss) * EBITDA Margin: **3.3%** 9M FY26 (from negative) * PBT (before exceptional items): ₹21.4 Cr Q3 FY26 (+152%) * **Finance Costs:** **48%** YoY decline ## B. Revenue Growth * **Modest Top-Line Expansion:** Revenue growth remained muted at 5% YoY in Q3, with flat performance over nine months, though earnings quality improved significantly. ## C. EBITDA & Margins * **Strong Margin Leverage:** Double-digit EBITDA growth outpaced revenue, driven by operating leverage, improved product mix, and cost discipline. * **Structural Turnaround:** Transition to profitability in EBITDA terms over nine months reflects scaling traction in the **bio-based chemical segment** and favorable mix shift. ## D. Profit Before Tax * **Earnings Acceleration:** PBT before exceptional items surged 152% YoY, underpinned by stronger operations and sharply lower finance costs. * **Exceptional Charges:** A **₹34 Cr write-off** related to legacy harvesting and transport costs in Maharashtra was reiterated from prior disclosure. ## E. Cash Flow & Costs * **Balance Sheet Strengthening:** Significant reduction in finance costs highlights improved liquidity and deleveraging momentum. * **Regulatory Provisioning:** An additional provision was recorded for estimated compliance costs tied to the new labor code implementation. --- # 2. Product & Segment Performance ## A. Key Figures * EBITDA Margin (Bio-Based Chemicals): 7.7% in Q3 FY26 (+320 bps YoY) * **Jivana Brand Revenue:** **₹100 Cr** in 9M FY26 * **Specialty Chemicals Mix:** **62%** of chemical basket (9M FY26) ## B. Bio-Based Chemicals * **Profitability Uplift:** Bio-based chemicals delivered a significantly improved margin profile, driven by a strategic shift toward **higher-value specialty products**. * **Strategic Focus:** Management prioritizes bio-based chemicals, dimethyl ether, grain-based ethanol, and cancer biology, with **no near-term roadmap** for commercializing the bio-composite product. ## C. Ethanol & Sugar * **Segmental Divergence:** Ethanol faced demand softness, while sugar and cogeneration performed in line with seasonal expectations. * **Cost Discipline:** Brand-building in sugar remains tightly controlled, with **frugal spending** across all sales channels to preserve cash flow. ## D. Jivana Brand Sales * **Consumer Platform Validation:** Jivana achieved ₹100 Cr in revenue, confirming the viability of leveraging industrial capabilities for **consumer market expansion**. * **Scaling Trajectory:** The segment is in early-stage scaling, with growth expected from **wider distribution, enhanced branding, and product diversification**. ## E. Specialty Chemicals Mix * **Green Chemistry Momentum:** Collaboration with Synthomer advanced commercialization of **bio-based butyl acrylate**, showcasing the scalability of the company’s sustainable platform. * **Strategic Input Role:** The company’s **bio-based butanol** is now a key enabler in developing fossil-free monomers, reinforcing vertical integration in green specialty chemicals. --- # 3. Capacity & Production ## A. Distillery Expansion * **Strategic Growth Levers:** Expansion focused on scaling high-margin bio-based chemicals and grain-based ethanol, driven by disciplined capital allocation and technology investments. * **Commissioning Delay:** Grain-based distillery commissioning delayed to **March–April** due to vendor equipment delays, pushing commercial operations to **Q1 next fiscal**. * **Long-Term Capacity Roadmap:** Ongoing debottlenecking and capacity additions aim to expand specialty chemicals portfolio, reduce import reliance, and boost exports. ## B. Feedstock Flexibility * **Multi-Feedstock Strategy:** Fully fungible distillery enables optimization across sugarcane juice, molasses, and maize—leveraging **4-month maize cycles** to counter climate and supply risks. * **Policy-Driven Flexibility:** Feedstock mix adjusted dynamically based on government ethanol pricing, enhancing resilience to policy shifts. ## C. DME Pilot Progress * **DME Development On Track:** Dimethyl ether production in active pilot phase with ICT, progressing as planned post-lab validation. ## D. Utilization Rates * **High Utilization Sustained:** ENA production capability allows flexible diversion of ethanol surplus, maintaining stable plant utilization amid demand volatility. * **Margin Support via Operations:** Focus on timely delivery and ENA leverage helps manage margin pressure while meeting blending targets. --- # 4. Innovation & R&D ## A. Key Figures * **R&D Expenditure:** **INR 18 Cr** over 15 years for cancer molecule development * **Strategic Milestone:** **US patent granted** for novel anti-cancer molecule targeting triple negative breast cancer ## B. Cancer Molecule Trials * **Clinical Readiness:** Cancer molecule for triple negative breast cancer has demonstrated **human safety** and defined **genetic mechanism of action**, with CDSCO application for efficacy trials in progress. * **Dual-Track Strategy:** Company is simultaneously advancing **preliminary efficacy trials** and pursuing **out-licensing partnerships**, reflecting a focused commercialization approach. * **Innovation Efficiency:** Development executed as an **innovation-led, frugal R&D model** leveraging core strengths in chemistry and biology, distinct from traditional pharma. ## C. DME to CO2 Tech * **Pilot Progress:** DME to CO2 technology platform advancing with **pilot plant activities underway**, validating its potential as a clean fuel and chemical intermediate. * **Strategic Value:** Technology addresses dual global challenges—**carbon capture** and **energy security**—enhancing its appeal to potential partners and policymakers. ## D. Out-Licensing Strategy * **Dedicated Vehicle:** Established **Sathgen Therapeutics LLC**, a U.S.-based wholly owned subsidiary with leadership in place, to drive IP monetization and global out-licensing. * **First Commercial Deal:** Signed **licensing agreement with Catalyxx** for bio-based butanol production, validating the out-licensing model and pipeline relevance. * **Pipeline Focus:** Sustained innovation pipeline targeting **carbon footprint reduction** and **performance-enhancing product substitutes**. --- # 5. Customer & Distribution ## A. Key Figures * **Retail Outlets:** **7,500+** as of Dec '25 (+500 QoQ) ## B. Retail Outlet Growth * **Accelerated Expansion:** Distribution footprint grew faster than expected, with **500+ new outlets** added in the quarter, enabling broader market access and prompting strategic portfolio reassessment. * **Branded Growth Shift:** Company advancing pivot from wholesale sugar to **branded B2B/B2C model**, focusing on value-added products to strengthen shelf presence and customer retention. ## C. OMC Supply Commitments * **Supply Discipline:** Prioritizing fulfillment of binding ethanol supply obligations via flexible feedstock sourcing (cane, juice, B-molasses), even amid margin pressure. * **Commercial Prudence:** Emphasizes securing **customer offtake commitments** ahead of investments to ensure market readiness and de-risk scaling. ## D. Global Customer Ties * **Strategic Partnerships:** Signed **MOU with Synthomer** to commercialize **bio-based butanol**, validating years of co-development and accelerating green product adoption. * **Global Green Momentum:** Deepening collaboration with international customers on **bio-based feedstock substitution**, supported by strong demand for sustainable solutions. * **Market Enablers:** Highlights **flex-fuel vehicle adoption in Brazil** (E22/E100) as a potential blueprint for boosting ethanol demand in India. ## E. Portfolio Optimization * **Value-Creation Focus:** Strategy centered on **innovation, sustainability, and portfolio optimization** to drive long-term value. * **Consumer Strategy:** In food segment, enhancing **product basket value** and leveraging **pricing stickiness of branded goods** to ensure stability and growth. --- # 6. Risks & Policy Exposure ## A. Ethanol Pricing & Margin Pressures * **Sustained Margin Pressure:** Ethanol margins under strain from **frozen prices** for B-heavy molasses and cane juice routes despite rising cane input costs over two years. * **Policy Advocacy:** Management urges government to **revise ethanol pricing** to reflect higher cane costs and improve **GST treatment for flex fuel vehicles** to stimulate demand. ## B. Blending Mandate & Demand Drivers * **Accelerated E20 Achievement:** India reached its **E20 ethanol blending target by 2025**, five years ahead of schedule, reinforcing strong policy momentum and demand visibility. * **Structural Demand Support:** Favorable agro-climatic conditions and smallholder farming base provide long-term tailwinds for sustainable biofuel policies aligned with national net zero goals. * **Regulatory Adaptability:** Company mitigates policy and demand-supply risks through flexible production capacity amid evolving blending mandates. ## C. Cost Environment & Operational Resilience * **Positive Margins Maintained:** Despite adverse price-cost dynamics, Godavari continues to generate **positive ethanol margins**, underscoring operational efficiency and cost management. --- # 7. Guidance & Outlook ## A. Key Figures * **EBITDA Goal:** **3x growth** by FY29 vs. base year · **₹325 Cr** planned capex (75% bio-chemicals, 25% ethanol) * EPS: ₹9.64 (9M FY29) vs. loss of ₹5.11 (prior year 9M) ## B. Strategic Outlook & Market Drivers * **Green Energy Momentum:** National focus on net zero and biofuels, reinforced by India Energy Week, underpins long-term sector tailwinds. * **Ethanol Demand Upside:** Structural growth expected from rising auto sector activity and petrol consumption over the next decade. * **Management Confidence:** Leadership expresses strong conviction in ethanol’s long-term trajectory, prioritizing strategic positioning over short-term volatility. ## C. Capital Allocation & Execution * **Targeted Capex Deployment:** Growth investments focused on high-potential bio-based chemicals, with disciplined allocation across ethanol and food products. * **Cash-Neutral Expansion:** Food products scaled without cash burn; future spend limited to **single-digit crores**, reflecting capital efficiency. * **Flexible Commercial Model:** Ethanol supply will be dynamically calibrated annually based on economics and bid results.