Godavari Bioref.

Godavari Biorefineries reported strong financial results for Q4 FY25, with revenue from operations reaching INR 580 crores. For the full fiscal year 2025, revenue increased by 11% to INR 1,870 crores. Q4 FY25 EBITDA stood at INR 122 crores, achieving a robust margin of 21%, an 80 basis point improvement from 20.2% in Q4 FY24. However, FY25 PAT, excluding one-time^📎 deferred tax, was modest at INR 1.1 crores, resulting in a 0.1% PAT margin.

The company is undergoing a strategic transformation towards bio-based specialty chemicals and renewable energy, aiming for an increase in EBITDA by about 3x of FY25 numbers by FY29. This involves diversifying feedstock capabilities and reducing reliance on ethyl acetate. Godavari Biorefineries is actively co-creating solutions with global companies transitioning to lower carbon footprints, leveraging its expertise in renewable sources.

The ethanol segment delivered exceptional performance in Q4 FY25, with revenue growth of 37%, supported by the government's decision to restore the ethanol blending program from sugarcane juice/syrup. To further expand its presence in green energy, the company is investing in a 200-kiloliter-per-day fungible grain/maize distillery, expected to be commissioned in Q4 FY26. This will enhance ethanol capacity and multi-feedstock flexibility, positioning the company for sustained growth.

India's sugar output declined significantly in FY25 due to lower cane yields, while the Fair and Remunerative Price (FRP) for cane increased. This created margin pressure for the industry as ethanol procurement prices remained unchanged since November 2022. However, the government's recent decision to allow a uniform export quota of 1 million tons for sugar helped stabilize domestic supply and support sugar prices, providing some relief to industry margins.

Godavari Biorefineries has been engaged in 'blue sky thinking' research, including a drug discovery molecule for triple-negative breast cancer. The company has spent approximately INR 25 crores over the last 10 years on this project. Safety trials for this molecule are expected to be complete in Q2 FY26, with preliminary efficacy trials estimated to take two years or more thereafter. The strategic aim is to out-license this molecule to pharmaceutical companies after successful trials, as it is not a core business for Godavari.

For FY26, the company plans a capital expenditure of INR 130 crores (net of GST) for the grain-based ethanol facility. Additionally, investments are being made in de-bottlenecking initiatives to optimize existing production capacities in bio-based chemicals. The company has also licensed technology for biobutanol and higher alcohols, with a planned capacity of 30,000 tons, with the first phase targeting 15,000 tons, which will significantly boost its sustainable chemistry portfolio.