Godavari Biorefineries Limited

Godavari Biorefineries reported a strong Q3 FY26, with total income growing 2.5% year-on-year to INR 461.9 crores. EBITDA increased by 13.8% to INR 45.1 crores, leading to a 97 basis points expansion in EBITDA margins to 9.8%. Profit before tax (PBT) before exceptional items^📎 saw a significant jump of 152.2% to INR 21.4 crores, supported by operating leverage, improved product mix, and disciplined cost management. Finance costs also declined by 48% year-on-year, reflecting strengthened cash flows.

The bio-based chemical business was a key contributor to profitability, with its EBITDA margin improving significantly to 7.7% in Q3 FY26, up from 4.5% in the corresponding quarter last year. This segment's growth was driven by a higher share of specialty and value-added products. For the 9-month period, bio-based chemicals contributed 62% of the chemical basket, indicating growing traction and a favorable product mix.

The ethanol segment experienced some softness during Q3 FY26. To mitigate feedstock risks and policy uncertainties, the company is diversifying its feedstock base by adding a maize/grain-based facility, alongside existing sugarcane juice and molasses. This multi-feedstock approach provides flexibility to optimize production based on declared prices and manage climate risks. The commissioning of the grain-based facility, initially expected in Q3, is now anticipated by next quarter (March/early April 2026) due to equipment delays.

Godavari Biorefineries secured a US patent for a novel anti-cancer molecule targeting Triple Negative Breast Cancer. The company has completed safety trials and is preparing to apply to CDSCO for preliminary efficacy trials. A wholly-owned step-down subsidiary, Sathgen Therapeutics LLC, was incorporated in the US to market this IP and pursue out-licensing partnerships. Additionally, the DME to CO2 technology initiative is progressing well with pilot plant activities, and a collaboration with Synthomer is advancing bio-based butyl acrylate using Godavari's bio-based butanol.

The consumer business, particularly the Jivana brand, is gaining momentum, having crossed INR 100 crores in revenue during the first 9 months of FY26. This validates the strategy of building a balanced business model combining industrial strength with consumer-facing growth. The company is expanding its distribution, with approximately 7,500+ outlets as of December 2025, up from 7,000+ in the previous quarter, and plans to further strengthen brand presence and product offerings.

The company aims to achieve 3x EBITDA by FY29. Management reiterated a target of INR 3,000 crores top line with a 10-11% EBITDA margin. For capital allocation, an estimated capex of INR 325 crores is planned, with 75% allocated to bio-based chemicals and 25% to the ethanol segment, focusing on capacity expansion and feedstock diversification. This strategy underpins the company's commitment to consistent and sustainable value creation.

Management expressed optimism about the green transition, noting India's achievement of E20 blending targets five years ahead of schedule. The industry is advocating for an increase in ethanol prices, especially for B-heavy molasses and sugarcane juice, to align with rising cane costs. There is also a push for better incentives for flex-fuel vehicles to boost bio-fuel demand. The government's commitment to Net Zero and increasing blend percentages are expected to drive future growth in the sector.