Godavari Bioref.

Godavari Biorefineries reported a 12% year-on-year growth in revenue from operations, reaching Rs. 447 crores in Q3 FY25. For the nine-month period, revenue stood at Rs. 1291 crores, a 20% increase over the previous year. The company achieved an EBITDA of Rs. 39.6 crores with a margin of approximately 9% in Q3 FY25, and a PAT of Rs. 5.8 crores. However, the nine-month financials showed a negative EBITDA of Rs. 1 crore and a negative PAT of Rs. 95 crores, with a PAT margin of 1.3%.

The company is strategically focusing on high-value bio-based chemicals and strengthening its ethanol division. A key highlight was the successful debottlenecking of the 1,3 butylene glycol production capacity from 120 tons per month to 200 tons per month. Further debottlenecking of other chemical capacities is planned for coming quarters to meet rising market demand, reinforcing the company's commitment to innovation-led biorefining. The gross block of the company stands at Rs. 1,245 crores, with further capitalization planned for strategic projects.

The distillery division contributed 39% of the company's revenue in Q3 FY25. To enhance production flexibility and mitigate climate and policy risks, Godavari is investing in a new dual-feed 200 kiloliters per day corn/grain-based facility, which is targeted for commissioning in H2 FY26 (Q4 FY26). This new facility will complement the existing 570 kiloliters per day sugarcane-based distillery. The industry is actively seeking government intervention to increase ethanol prices derived from sugarcane juice and B heavy molasses, aligning them with the increases in Fair and Remunerative Price (FRP).

Godavari Biorefineries has secured an exclusive India license agreement with Catalyxx Incorporated for the conversion of ethanol into biobutanol and other higher alcohols. The first phase of this initiative involves constructing a facility to produce 15,000 metric tons of biobutanol and higher alcohols annually, with commissioning targeted for Q2 FY27. Management projects that this facility could generate approximately Rs. 250 crores in revenue at 100% capacity utilization in its second year of operation, driven by global demand for bio-based solutions that support net-zero goals.

The company significantly reduced its term debt by Rs. 240 crores during the quarter, utilizing proceeds from its IPO, bringing the total debt to Rs. 405 crores as of December 2024. This prepayment is expected to result in an annual interest saving of Rs. 24 crores. Furthermore, the company's external credit rating improved from BBB stable to BBB plus. Godavari also plans to take an interest subvention loan of Rs. 119 crores at approximately 5.4% for the dual-feed grain-based ethanol project, further optimizing its financing costs.

The sugar segment faced headwinds in Q3 FY25, primarily due to a reduced sugar release quota, which resulted in lower sugar sales, reduced cash flow, and increased inventory. Additionally, sugarcane crushing was delayed due to directives from the Karnataka government, which recommended a later start to the season to improve sugar recovery. However, the government's recent allowance of a 1 million-ton sugar export quota has improved market sentiment, and the company expects to sell its sugar at similar or better prices in the coming quarters.