Godavari Biorefineries Limited — Q1 FY26 earnings call

Call held 11 Aug 2025

Management summary

Godavari Biorefineries Ltd reported a quarter of positive change in Q1 FY26, with revenue improving to INR533.2 crores and EBITDA turning positive at INR6.5 crores. The bio-based chemical segment showed strong growth, and interest costs reduced significantly. The company is advancing its ethanol expansion and drug discovery initiatives, despite inherent seasonality in some traditional segments.

Highlights

  • Revenue from operations at INR533.2 crores, showing YoY improvement from INR522.5 crores in Q1 FY25.

  • EBITDA reached INR6.5 crores, a significant turnaround from a loss in Q1 FY25, representing an improvement of INR16 crores.

  • Bio-based chemical segment EBITDA increased robustly by 43%, underscoring commitment to green chemistry.

  • Interest costs decreased by 22% year-on-year to INR15 crores, reducing financial burden and creating headroom for future investments.

  • Safety trials for a novel anti-cancer molecule concluded without dose-limiting toxicity, and European/Chinese patents secured for drug discovery initiatives.

Concerns

  • Reported a negative PBT of INR22.3 crores, though an improvement of INR19 crores from a loss of INR41.6 crores in Q1 FY25.

  • Seasonality inherent in some segments, particularly sugar and sugarcane-based ethanol, impacts quarterly performance.

  • Lower profitability on the ethanol side during Q1 was attributed to off-season maintenance.

Key financials

  1. Revenue from Operations ₹533.2 Cr +2.1%YoY
  2. EBITDA ₹6.5 Cr
  3. PBT ₹-22.3 Cr
  4. Gross Margin 19%
  5. Interest Costs ₹15 Cr -22%YoY

What they filed

Q1 FY27: revenue up 3.6%, net profit down 23.5% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue316 445 576 523 423 +34%457 +3%562 −2%542 +4%
EBITDA-34 37 110 5 -9 +74%43 +16%86 −22%-2 −140%
Net profit-76 6 70 -17 -43 +43%8 +33%52 −26%-21 −24%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Bio-based Chemical Segment
    43% EBITDA Growth
  • Ethanol Business
    40% Revenue Contribution45% Revenue Contribution (Upper Range)
  • Chemical Business
    40% Revenue Contribution45% Revenue Contribution (Upper Range)
  • Sugar and Co-generation
    — Revenue Contributionflat qualitative Trend

Capital allocation

high confidence
  • Capex ₹325 Cr
    • Bio-based specialty chemicals ₹227.5 Cr
    • Ethanol capacity increasing ₹97.5 Cr
    a further investment of INR325 crores at today's prices would be the estimate today, which would be needed to go into both the bio-based spec chem and the ethanol business to have these pivots. We expect about 70% of that investment to be in the bio-based spec chem side and about 30% to be in the ethanol capacity increasing side.
  • Debt Debt disclosed
    our interest costs decreased by 22% year-on-year to INR15 crores, a result of our focused efforts in reducing our debt from the same period last year.

Guidance & targets

Profitability

  • EBITDA Margin Profitability · by FY29 · High confidence 3x
    You have guided a 3x EBITDA margin by FY '29.

    — Samir Somaiya

  • Bio-based Specialty Chemicals EBITDA to Sales Margin Profitability · FY29 · High confidence in excess of 15%
    the biobased specialty chemicals, we are saying EBITDA to sales margin in excess of 15% is what we have articulated.

    — Samir Somaiya

EBITDA

  • EBITDA Contribution from Grain Distillery EBITDA · Q4 FY26 · High confidence start contributing
    this will start giving me the EBITDA from Q4 of FY '26

    — Ashish Sinha

  • Major Impact of 3x EBITDA Target EBITDA · from FY27, FY28 and FY29 · High confidence reflecting
    But the major impact, what we are talking about the 3x EBITDA, will start reflecting from FY '27, FY '28 and FY '29.

    — Ashish Sinha

Capacity

  • Grain Maize Distillery Commercial Production Capacity · by the end of the calendar year 2025 · High confidence commence commercial production
    We are on track to commence commercial production by the end of the calendar year 2025

    — Samir Somaiya

  • Catalyxx Partnership Plant Startup Capacity · next year (FY27) · High confidence second half of the next year
    the expectation of the plant startup was in the second half of the next year.

    — Samir Somaiya

Segment Performance

  • Ethanol Business Performance Segment Performance · from FY26 onwards · High confidence stronger
    We've said that the ethanol numbers will start reflecting stronger from '26 onwards itself.

    — Samir Somaiya

  • Chemicals Business Performance Segment Performance · in '26, greater change from '27 onwards · High confidence improvement
    Chemicals will also show an improvement in '26, but you will see greater change from '27 onwards.

    — Samir Somaiya

Drug Discovery

  • Anti-cancer Molecule Out-licensing Process Drug Discovery · future · High confidence two to three years
    This process will take in the range of two to three years.

    — Samir Somaiya

Revenue Mix

  • Ethanol Revenue Contribution Revenue Mix · going forward · High confidence 40%-45%
    ethanol would give in the range of 40%, 45% in the range.

    — Ashish Sinha

  • Chemical Business Revenue Contribution Revenue Mix · going forward · High confidence 40%-45%
    the balance majorly would come from the chemical business would be in the range of 40%-45%.

    — Ashish Sinha

  • Sugar and Co-generation Revenue Contribution Revenue Mix · going forward · High confidence flat
    The sugar and co-generation segment would remain as is flat

    — Ashish Sinha

Revenue

  • New 200 KLPD Ethanol Plant Revenue Revenue · annual (300 days operation) · High confidence more than INR400 crores
    So, it would be more than INR400 crores of revenue, assuming that the plant operates for 300 days in a year.

    — Samir Somaiya

Tax

  • Effective Tax Rate Tax · going forward · High confidence 25%
    25%.

    — Ashish Sinha

What to watch in Q2 FY26

Grain Maize Distillery Commercial Production

by end of calendar year 2025
Current Progressing ahead of schedule
Target Commercial production commenced

Why it matters

Crucial for unlocking new growth avenues and contributing to India's energy transition, and for achieving 3x EBITDA target.

our upcoming 200 kilo liters per day fungible grain maize distillery is progressing ahead of schedule. We are on track to commence commercial production by the end of the calendar year 2025

Risks & concerns

  • Seasonality in operations

    medium

    Seasonality is inherent in some segments like sugar and sugarcane-based ethanol, impacting quarterly performance.

    Management acknowledged

  • Maize price volatility

    medium

    Volatility in maize prices could impact the margins of the new grain-based ethanol plant, requiring a robust sourcing strategy.

    Analyst acknowledged

Q&A highlights

8 direct
Ethanol profitability and B-heavy molasses inventory in Q1 FY26 Direct
So, in terms of gross profit margin of the ethanol business, that is aligned on year-on-year basis. However, there is a decline in the EBITDA margin by approximately 2%, that is because of the off-season maintenance we have taken. At the same time, Dhawan, we are having molasses stock at the end of this last quarter, which will continue to give us performance in this sector in Q2.

Clarifies the reasons for lower ethanol profitability in Q1 and indicates future contribution from existing molasses stock.

Asked by Dhavan Shah

Commercialization timeline and patent status for anti-cancer drug Direct
Next step for us would be to apply to the CDSCO for the trials of preliminary efficacy. We will then explore the route for out licensing this to pharmaceutical companies in India and overseas. This process will take in the range of two to three years.

Provides a clear roadmap and timeline for the drug discovery initiative, from regulatory approval to potential out-licensing.

Asked by Dhavan Shah

Strategic significance and contribution of bioethanol to revenue and margins Direct
We see ethanol as an important strategic direction for the Government of India. That is driven by three pillars. One is supplementing India's energy security, advancing towards the green energy transition, and securing farmer incomes. As a result of that, the government has reached a 20% ethanol blend in petrol. Earlier the target was 2030 and we have now achieved it at 2025 as a nation.

Highlights the strong policy tailwinds and strategic importance of ethanol for the company's growth and diversification.

Asked by Varun Mishra

Achieving the 3x EBITDA margin target by FY29 Direct
I think what we have announced is from FY '25 to FY '29, this 3x increase in margins in EBITDA and we have identified two pivots. One is a pivot of producing greater ethanol capacity and a better utilization of the ethanol capacity facility and the second is by increasing the quantity of bio-based specialty chemicals in our feedstock.

Explains the two primary drivers (ethanol capacity and bio-based chemicals) for achieving the ambitious EBITDA target.

Asked by Varun Mishra

Update on Catalyxx Partnership bio-butanol and higher alcohol facility Direct
Ma'am that plant was not meant to start already. What we had announced was a licensing of the technology and what we had said in the last meeting also is that we are doing a basic and a detailed engineering of the same. This process is currently still underway and the expectation of the plant startup was in the second half of the next year.

Clarifies the current status and expected timeline for the Catalyxx project, indicating it's still in the engineering phase.

Asked by Devanshi Shah

Revenue and margin expectations from the new 200 KLPD ethanol plant Direct
So, it's a 200,000 liter per day facility. At a 300 day operation, it would mean 60 million liters. Currently, the ethanol price from maize is at little over INR70 per liter. So, it would be more than INR400 crores of revenue, assuming that the plant operates for 300 days in a year.

Provides specific revenue projections for the new ethanol plant, highlighting its significant contribution to future top-line.

Asked by Darshil Jhaveri

Impact of new chemical facilities on seasonality of profitability Direct
See, the sugar cogeneration and ethanol from sugarcane juice is seasonal. The chemicals business is annual, which means not so seasonal. And likewise, the maize to ethanol will also be less seasonal. So, as you implement these initiatives, seasonality will remain because there is an issue of the sugarcane crushing business is seasonal. But what we are adding in terms of specialty chemicals and maize-based ethanol will reduce the seasonality.

Addresses how diversification into maize-based ethanol and chemicals will mitigate, though not eliminate, the inherent seasonality of the business.

Asked by Darshil Jhaveri

Long-term plan for the oncology pipeline (build capacity vs. out-licensing) Direct
Maybe we would have a better clarity. You know, we have chemicals, molecules, that we have a research team to look at. We will definitely not here to become a pharma company, but we are an innovation-based science company. And definitely, if there is interest, we will look at opportunities to see how best we can monetize the research intellectual property that we develop.

Clarifies the company's strategy for its drug discovery efforts, focusing on IP monetization through out-licensing rather than becoming a full-fledged pharma company.

Asked by Preeti Agarwal

3 min read 6 chapters

Detailed narrative

Q1 FY26 Performance Overview

Godavari Biorefineries Ltd reported a revenue from operations of INR533.2 crores in Q1 FY26, showing a year-on-year improvement from INR522.5 crores in Q1 FY25. The company achieved a positive EBITDA of INR6.5 crores, marking a significant turnaround from a loss in the same period last year, with an improvement of INR16 crores. Despite this, PBT remained negative at INR22.3 crores, though it improved by INR19 crores from a loss of INR41.6 crores in Q1 FY25. Gross margin expanded by 512 basis points year-on-year to 19%, driven by product mix and pricing discipline. Interest costs decreased by 22% year-on-year to INR15 crores due to debt reduction efforts.

Strategic Shift to Bio-based Chemicals

The bio-based chemical segment is a strategic pivot for the company, registering a robust 43% increase in EBITDA during Q1 FY26. This growth is supported by customer commitment to green chemistry and the development of high-value specialty chemicals. The company aims for an EBITDA to sales margin in excess of 15% for bio-based specialty chemicals by FY29. Ongoing de-bottlenecking and process optimization are expected to further enhance this segment's capacity and profitability.

Ethanol Expansion and Energy Transition

Ethanol is a key growth area, aligned with the Indian government's energy security and green energy transition goals, including the 20% ethanol blending target already achieved. The company's upcoming 200 kilo liters per day fungible grain maize distillery is progressing ahead of schedule, with commercial production expected by the end of calendar year 2025. This new facility is projected to contribute over INR400 crores in annual revenue, based on current ethanol prices and 300 days of operation, and will strengthen multi-feedstock capabilities, reducing seasonality.

Drug Discovery Initiatives

Godavari Biorefineries is making significant strides in drug discovery. A novel anti-cancer molecule has received European patent validation, and safety trials concluded without dose-limiting toxicity. Additionally, a Chinese patent was secured for another promising anti-cancer compound. The next step involves applying to the CDSCO for preliminary efficacy trials, with the out-licensing process to pharmaceutical companies expected to take two to three years after successful trials.

Capital Expenditure and Funding

To achieve its strategic goals, including the 3x EBITDA margin target by FY29, the company plans a further investment of INR325 crores. This investment will be allocated approximately 70% to the bio-based specialty chemicals side and 30% to ethanol capacity expansion. The company is exploring various fundraising means with its board to support this financing plan. The new grain distillery is expected to start contributing EBITDA from Q4 FY26, with major impacts on the 3x EBITDA target reflecting from FY27-FY29.

Future Outlook and Segment Contribution

The company anticipates stronger ethanol performance from FY26 onwards and improvement in chemicals in FY26, with greater change from FY27. Going forward, ethanol and chemical businesses are each expected to contribute 40-45% to revenue, while the sugar and co-generation segment is projected to remain flat. This shift in mix, coupled with the new grain-based ethanol and annual chemical businesses, is expected to reduce the overall seasonality of the company's profitability.

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