Godavari Biorefineries Limited — Q3 FY26 earnings call

Call held 26 Feb 2026

Management summary

Godavari Biorefineries delivered a strong Q3 FY26, with robust EBITDA and PBT growth driven by improved product mix, cost management, and significant margin expansion in bio-based chemicals. The consumer brand Jivana achieved a milestone of INR 100 crores in 9M FY26, and the company secured a US patent for an anti-cancer molecule. However, the ethanol segment faced challenges from rising cane costs and a delay in grain-based distillery commissioning.

Highlights

  • EBITDA grew by 13.8% YoY to INR 45.1 crores in Q3 FY26, with margins expanding by 97 bps to 9.8%.

  • Profit before tax (PBT) before exceptional items increased by 152.2% to INR 21.4 crores in Q3 FY26.

  • Bio-based chemical business EBITDA margin significantly improved to 7.7% in Q3 FY26 from 4.5% in the corresponding quarter last year.

  • Finance costs declined by 48% year-on-year, reflecting strengthened cash flows and balance sheet.

  • Consumer brand Jivana crossed INR 100 crores revenue during 9 months of FY26, validating the consumer-facing growth strategy.

Concerns

  • Ethanol segment witnessed some softness during the quarter.

  • Delay in commissioning of the grain-based distillery, now expected in Q4 FY26 (March/early April).

  • Ethanol business margins are under stress due to rising cane costs while ethanol blend prices have remained unchanged.

  • A provision was made in Q3 FY26 for estimated costs related to the implementation of the new labour code.

Key financials

  1. Total Income ₹461.9 Cr +2.5%YoY
  2. EBITDA ₹45.1 Cr +13.8%YoY
  3. EBITDA Margin 9.8%
  4. PBT (before exceptional items) ₹21.4 Cr +152.2%YoY
  5. Finance Costs Decline 48%

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 Chemicals
    7.7% EBITDA Margin4.5% EBITDA Margin (YoY)

Capital allocation

high confidence
  • Capex ₹325 Cr
    • Bio-based chemicals capacity increase ₹243.75 Cr
    • Ethanol side (maize-based facility) ₹81.25 Cr
    For the capital allocation, so what we have communicated to the larger audience also to achieve the 3x EBITDA by FY29, we have assumed the capex, estimate the capex of INR325 crores. Out of which what we have planned, the maximum 75% would go for the bio-based chemicals and the 25% allocation would go for the ethanol side.
  • Debt Debt disclosed
    Finance costs declined by 48% year-on-year reflecting our sustained efforts to strengthen cash flows and the balance sheet.
  • M&A Sathgen Therapeutics LLC Acquisition · Closed

    To market IP and pursue out-licensing partnerships for anti-cancer molecule.

    We also incorporated Sathgen Therapeutics LLC in the US, as a wholly owned step-down subsidiary to market our IP and pursue out-licensing partnerships.

Guidance & targets

Profitability

  • EBITDA growth Profitability · FY29 · High confidence 3x EBITDA
    We had said that we would achieve a 3x EBITDA in 4 years' time exactly, and we are working to working towards that goal. Yes.

    — Samir Somaiya

  • EBITDA level Profitability · by 2029 · High confidence 10% to 11%
    So, my next question is, I think, in just before the last con call you have mentioned that by 2029, you are likely to achieve close to INR3,000 crores top line with 10% to 11% EBITDA level. So, that is -- right in that direction we are progressing?

    — Pankaj Prasoon (confirmed by Samir Somaiya)

Revenue

  • Top line Revenue · by 2029 · High confidence INR 3,000 crores
    So, my next question is, I think, in just before the last con call you have mentioned that by 2029, you are likely to achieve close to INR3,000 crores top line with 10% to 11% EBITDA level. So, that is -- right in that direction we are progressing?

    — Pankaj Prasoon (confirmed by Samir Somaiya)

Capacity

  • Grain-based distillery commissioning Capacity · next quarter (Q4 FY26) · High confidence Commissioned

    Previously Q3 FY26 → Commissioned

    The commercialization of the grain-based facility was expected in this quarter. There has been some delay in the receipt of equipment from the vendor. That is now expected in the month of March, which is next month and early April. So we are now confident of the commissioning of the same by next quarter.

    — Samir Somaiya

Distribution

  • Jivana brand outlets Distribution · as of Dec '25 · High confidence 7,500+ outlets

    From 7,000+ outlets today

    As at December '25, we are operating at approximately 7,500 plus outlets. Which is in the last quarter it is 7,000 plus outlets. So we are keep increasing the outlets part.

    — Ashish Sinha

What to watch in Q4 FY26

Grain-based distillery commissioning

next quarter (Q4 FY26)
Current Delayed, equipment expected in March/early April 2026
Target Commercial operations commenced

Why it matters

Crucial for diversifying ethanol feedstock, improving capacity utilization, and mitigating climate risk.

The commercialization of the grain-based facility was expected in this quarter. There has been some delay in the receipt of equipment from the vendor. That is now expected in the month of March, which is next month and early April. So we are now confident of the commissioning of the same by next quarter.

Risks & concerns

  • Ethanol pricing vs. rising cane costs

    high

    Ethanol prices for B-heavy and juice routes have remained largely unchanged for years, while cane costs have continued to rise, impacting distillery margins.

    Analyst acknowledged

  • Feedstock availability and evolving blending mandates for ethanol

    medium

    Uncertainty around future feedstock availability and potential shifts in government policy for ethanol blending mandates.

    Analyst acknowledged

  • Commodity price swings and working capital cycles

    medium

    Impact of price volatility on balance sheet and cash flow discipline, particularly for ethanol and sugar.

    Analyst acknowledged

  • Delay in grain-based distillery commissioning

    low

    Delay in commercialization of the grain-based facility due to equipment receipt, now expected in Q4 FY26.

    Analyst acknowledged

  • Costs related to new labour code implementation

    low

    A provision has been made in the current quarter for estimated costs due to the implementation of the new labour code.

    Management acknowledged

Q&A highlights

8 direct
Managing feedstock risk and evolving blending mandates for ethanol Direct
So, the feedstock risk is being mitigated by adding the additional maize/grain-based facility... By doing this, we are mitigating climate risk as well as the associated feedstock risk.

Addresses a key operational risk for the ethanol business and outlines the company's diversification strategy.

Asked by Sucrit D. Patil

Capital allocation strategy for future growth (ethanol vs. chemicals) Direct
For the capital allocation, so what we have communicated to the larger audience also to achieve the 3x EBITDA by FY29, we have assumed the capex, estimate the capex of INR325 crores. Out of which what we have planned, the maximum 75% would go for the bio-based chemicals and the 25% allocation would go for the ethanol side.

Provides clear numerical guidance on future capital expenditure and strategic investment priorities.

Asked by Sucrit D. Patil

Delay in commissioning of grain-based distillery and impact on capacity utilization Direct
The commercialization of the grain-based facility was expected in this quarter. There has been some delay in the receipt of equipment from the vendor. That is now expected in the month of March, which is next month and early April. So we are now confident of the commissioning of the same by next quarter.

Clarifies the revised timeline for a significant capacity addition and its implications for future ethanol supply.

Asked by Pratik Shah

Impact of frozen ethanol prices vs. rising cane costs and government expectations for price revision Direct
The industry has been requesting the government for an increase in the price for ethanol from B-heavy molasses or from sugarcane juice commensurate with the increase in cane price that has happened over the last two to three years for which there is no corresponding increase in ethanol price.

Highlights a critical margin pressure point for the ethanol business and the industry's advocacy efforts for policy changes.

Asked by Raj Patel

Mid-term targets for specialty chemicals and drivers of high-margin growth Direct
Our whole approach is to add capacity as well as de-bottleneck capacity to continue to introduce chemicals, bio-based spec chemicals with our customers either again to reduce imports which come from overseas from fossil based or sell overseas and this remains our long-term strategy.

Explains the strategic direction and growth drivers for the high-margin bio-based chemicals segment.

Asked by Raj Patel

Progress on cancer molecule development and the company's 'right to win' Direct
The company is advancing well in the development of its cancer molecule to find a solution to treating triple negative breast cancer... we have finished our safety trials and are preparing now to apply to the CDSCO for conducting preliminary trials for efficacy in patients.

Provides an update on a significant R&D initiative and outlines the path forward for clinical trials and potential out-licensing.

Asked by Dhananjai Bagrodia

Growth strategy for the Jivana brand and distribution expansion Direct
the brand Jivana also has now been developed well which is now selling quite well and we have just crossed INR100 crores of sales in the first 9 months. The idea was also to sell related products in the Jivana brand such as brown sugar, such as jaggery and other products that we are doing.

Details the progress and strategic vision for the consumer business, a key growth driver for the company.

Asked by Dhananjai Bagrodia

Progress and market potential for Dimethyl Ether (DME) and bio-based butanol Direct
Dimethyl ether as we mentioned in the last call is a -- in the pilot phase... The second point is the our recent MOU with Synthomer. Now butanol is a product that we have been working on.

Updates on key innovation projects that represent long-term growth opportunities in green chemistry and energy.

Asked by Pankaj Prasoon

3 min read 7 chapters

Detailed narrative

Q3 FY26 Financial Performance Overview

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.

Bio-based Chemicals Segment Growth and Margin Expansion

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.

Ethanol Business Dynamics and Feedstock Diversification

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.

Innovation in Anti-Cancer Molecule and Green Chemistry

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.

Consumer Business Expansion (Jivana Brand)

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.

Long-term Financial Targets and Capital Allocation Strategy

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.

Industry Outlook and Government Policy Expectations

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.

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