Godavari Biorefineries Ltd — Q3 FY26

Godavari Biorefineries Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=SiXZKW7G6r4 Published: 2 months ago

0:00 Ladies and gentlemen, good day and welcome to Gdavari Bio Refineries Limited Q3 and 9month FI26 earnings conference call. 0:10 10 seconds As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance 0:19 19 seconds during the conference call, please sign please signal an operator by pressing star then zero on your touchtone phone. 0:26 26 seconds I now hand the conference over to Miss Prai Amre from MUFG investor relations team. Thank you and over to you ma'am. 0:34 34 seconds Good morning everyone and welcome to Godavari biorefineries limited Q3 and 9 months FI26 earnings conference call. 0:42 42 seconds Today on the call we have Mr. Samir Somaya chairman and managing director Mr. Ashi Shina assistant general manager investor relations and finance to 0:51 51 seconds provide insights on the operational and financial performance. Before we begin the call, I would like to give a short disclaimer. This call may contain some 0:59 59 seconds of the forward-looking statements which are completely based upon our beliefs and expectations as of today. The statements are not a guarantee of our 1:07 1 minute, 7 seconds future performance and involve unforeseen risks and uncertainties. With this, I would like to hand over the call to Samir sir for his opening remarks. 1:16 1 minute, 16 seconds Over to you, sir. Thank you. Good morning everyone. 1:21 1 minute, 21 seconds Welcome to the Q3 and 9month financial year 2026 earnings call of God bio refineries Limited. Thank you for 1:29 1 minute, 29 seconds joining us and for your continued support. I hope you have reviewed our financial results and our investor presentation available on the stock exchange and our website. 1:39 1 minute, 39 seconds Let me begin with the financial highlights for the quarter. In Q3, we delivered a strong improvement in 1:46 1 minute, 46 seconds profitability with IBIDA growing by approximately 14% yearonear along with a meaningful margin expansion. The profit 1:56 1 minute, 56 seconds before tax before exceptional items increased by about 152% driven by operating leverage, improved product mix, and disciplined cost management. 2:05 2 minutes, 5 seconds Finance costs declined by 48% year-on-year, reflecting a sustained efforts to strengthen cash flows and the balance sheet. Overall, the quarter 2:14 2 minutes, 14 seconds highlights the clear improvement in earnings quality and the benefit of structural measures implemented over the recent years. 2:20 2 minutes, 20 seconds From a segment per perspective, the biiobased chemical business maintained a key contributor to profitability supported by a higher share of specialtity and value added products. 2:31 2 minutes, 31 seconds Notably, the aenda margin of biiobased chemicals improved to 7.7% in Q3 FI26 2:38 2 minutes, 38 seconds compared to 4 and a.5% in the corresponding quarter last year. The ethanol se segment witnessed some softness during the quarter. The sugar 2:47 2 minutes, 47 seconds and co-generation segment being seasonal operated in line with the crushing cycle. 2:52 2 minutes, 52 seconds During the quarter, we also advanced several strategic initiatives. A key highlight was the grant of a US patent 2:59 2 minutes, 59 seconds for a novel anti-cancer molecule targeting triple negative breast cancer highlighting the strength of our research capabilities. We also 3:08 3 minutes, 8 seconds incorporated Sudge Therapeutics LLC in the US as a wholly owned step down subsidiary to market our IP and pursue 3:16 3 minutes, 16 seconds out licensing partnerships. In addition, our DME to CO2 technology initiative is progressing well with pilot plant activities under way. 3:28 3 minutes, 28 seconds We further strengthened our global sustainability initiative during the period. Our collaboration with synintoma to develop biio-based alternatives to 3:36 3 minutes, 36 seconds fossil based monomers is progressing well through this initiative. Biiobased butile acrylate is being commercialized 3:44 3 minutes, 44 seconds by them using our biiobased but demonstrating the scalability of our 3:51 3 minutes, 51 seconds green chemistry platform and reinforcing our positioning as a partner in the transition towards sustainable 3:57 3 minutes, 57 seconds materials. Our consumer business is also gaining momentum. A brand portfolio jivena cross 100 crores revenue during 9 4:05 4 minutes, 5 seconds months of FY26 validating a strategy of building a balanced business model that combines the industrial strength with consumerf facing growth. 4:15 4 minutes, 15 seconds While this segment is still in a scaling phase, we see long-term potential as we expand distribution, strengthen the brand's presence and deepen our product offerings. 4:25 4 minutes, 25 seconds Looking ahead, our priorities remain firmly anchored around disciplined execution, capital efficiency, and scaling high margin businesses. We are 4:34 4 minutes, 34 seconds advancing capacity additions, debottleing initiatives, technology investments, and enhancing resilience across cycles. These efforts combined 4:42 4 minutes, 42 seconds with our continued focus on innovation, sustainability, and portfolio optimization position us well to deliver consistent and sustainable value 4:51 4 minutes, 51 seconds creation over the long term. With that I would now like to hand over the call to Mr. Ashish Singha who will take you 4:58 4 minutes, 58 seconds through the financial performance in detail. Uh hi good morning everyone. 5:06 5 minutes, 6 seconds Quarter 3 and 9 months FI26 results steady progress in strengthening our operating performance with our strategic 5:14 5 minutes, 14 seconds initiatives translating into improved profitability and margins. 5:19 5 minutes, 19 seconds Total income for the quarter stood at rupes 461.9 cr a growth of 2.5% 5:27 5 minutes, 27 seconds yearonear while revenue growth was modest earnings quality improved significantly 5:34 5 minutes, 34 seconds a beta for quarter 3 fi26 was 45.1 K compared to rups 39.7 cr last year resisting a growth of 13.8%. 5:47 5 minutes, 47 seconds AITA margins expanded by 97 basis points to 9.8%. 5:54 5 minutes, 54 seconds Supported by operating leverage, improved product mix and cost optimization across operations. 6:01 6 minutes, 1 second Profit before tax before access item rose to rupees 21.4 K from rupees 8.4 K 6:10 6 minutes, 10 seconds in quarter 3 FI25 a growth of 152.2%. 6:16 6 minutes, 16 seconds aided by stronger operating performance and lower finance cost. 6:21 6 minutes, 21 seconds For the 9 month period, total income stood at rupees 1430.2 K compared to 6:28 6 minutes, 28 seconds rupees 1298.2 K last year. A bit improved to rupees 47.2 K from a 6:36 6 minutes, 36 seconds marginal loss of rupees 1.4 4 K in the previous year with margins strengthening 6:43 6 minutes, 43 seconds to 3.3% from negative levels. Losses at the PBT level also reduced significantly. 6:51 6 minutes, 51 seconds This improvement was driven by growing traction in the bio-based chemical segment, better product mix. Overall, 6:59 6 minutes, 59 seconds the performance indicates strengthening operating fundamentals and improving margins. We remain 7:06 7 minutes, 6 seconds positive on the outlook for both the bow waste chemicals and its small business given supporting structural drivers. 7:14 7 minutes, 14 seconds With that, I would now request the moderator to open the floor for questions. 7:22 7 minutes, 22 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. 7:32 7 minutes, 32 seconds If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use 7:39 7 minutes, 39 seconds handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question Q assembles. 8:13 8 minutes, 13 seconds The first question is from the line of Sukrit D. Patel from Eyesight Finte Private Limited. Please go ahead. 8:20 8 minutes, 20 seconds Good morning to the team. Uh I have two following questions. The first question to Mr. Samir is uh as uh GPL scales 8:28 8 minutes, 28 seconds biiobased chemicals and ethanol, how you know manage risks and uncertainty around future feed stock availability and 8:37 8 minutes, 37 seconds evolving blending mandates? What strategic choices will ensure uh the company stays strong you know if policy 8:45 8 minutes, 45 seconds or demand shift over the next uh one to two years? That's my first question. I'll ask my second question after this. Thank you. 8:52 8 minutes, 52 seconds May I ask you just to repeat your question uh slowly? 8:58 8 minutes, 58 seconds Yeah. Uh so in a gist I am asking about how you will handle risks in feed stock 9:05 9 minutes, 5 seconds and regulations in the future not just the current growth guidance. 9:10 9 minutes, 10 seconds Got it. Thank you. So let me first take your Thank you very much for the question. 9:19 9 minutes, 19 seconds I want to respond by talking about you have asked questions about feed stock 9:25 9 minutes, 25 seconds and you have talked about policy and I assume you're talking about this for the ethanol program. 9:34 9 minutes, 34 seconds Yes, correct. 9:36 9 minutes, 36 seconds Okay. So the feed stock risk is being mitigated by adding the additional 9:43 9 minutes, 43 seconds maze/grail base facilities. So as we look forward, we will be looking at 9:52 9 minutes, 52 seconds making ethanol from sugar cane juice, bee molasses 9:59 9 minutes, 59 seconds or molasses that is cane molasses and also maze or grain. 10:05 10 minutes, 5 seconds Maize being a 4 month crop, cane being a one-year crop. By doing this we are 10:13 10 minutes, 13 seconds mitigating climate risk as well as the associated feed stock risk. That's point 10:20 10 minutes, 20 seconds one. Government policy leads to two kinds of issues. One policy could be how 10:29 10 minutes, 29 seconds they alter the pricing when it comes for ethanol delivered from the various feed 10:38 10 minutes, 38 seconds stocks that they get. Once again by creating a funible multif feed stock 10:45 10 minutes, 45 seconds distillery it gives us flexibility to optimize our production and delivery of 10:53 10 minutes, 53 seconds product based on the prices that they declare. The other issue that government policy can be would be the blending 11:02 11 minutes, 2 seconds mandate and secondly also what the demand supply gap can be. So the 11:10 11 minutes, 10 seconds government may increase the blend or it may keep the blend the same but demand may go up what I will say in line with 11:18 11 minutes, 18 seconds the increased auto market or the fuel consumption. Our ability would be to maintain flexibility in feed stock to 11:26 11 minutes, 26 seconds deliver that product as well as we have also got capacity to make ENA which also 11:33 11 minutes, 33 seconds goes into the market so that if there is a surplus of our production versus demand we can maintain capacity 11:42 11 minutes, 42 seconds utilization by that market as well. We also supply ethanol to other segments 11:50 11 minutes, 50 seconds such as the pharmaceutical segment and other segments. And just to say that our chemical division also is a consumer of 11:59 11 minutes, 59 seconds ethanol and looking at the way the market progresses, we can also look at making ethanol for our own use should 12:08 12 minutes, 8 seconds the economics prove beneficial. I hope I answered that first question of yours. 12:15 12 minutes, 15 seconds Yes, thank you. Uh should I ask my uh second second question? Yes, please. 12:20 12 minutes, 20 seconds Yeah, my second question to uh the uh CFO is uh again a forward-looking one. 12:26 12 minutes, 26 seconds Looking ahead, how will you structure GBL's balance sheet and cash flow discipline to withstand commodity price 12:34 12 minutes, 34 seconds swings and working capital cycles? What financial signals will guide uh the capital allocation between ethanol, 12:41 12 minutes, 41 seconds chemicals and sugar to ensure a predictable earnings over the uh next few quarters? Just want to understand your point of view and plan of action on this. Thank you. 12:52 12 minutes, 52 seconds Uh thank you for the question. uh for the capital uh allocation uh so what we 12:58 12 minutes, 58 seconds have uh communicated to uh the larger audience also to achieve the 3x beta and 13:05 13 minutes, 5 seconds uh by FI29 uh we have assumed the capex estimate the capex of say 25 crores out of which what we have planned the 13:13 13 minutes, 13 seconds maximum 75% would go for the biio-based chemicals and the 25% allocation would go for the uh ethanol Right. 13:24 13 minutes, 24 seconds So just to reiterate what he's saying, what we are doing is optimizing or adding a maze-based facility in ethanol 13:34 13 minutes, 34 seconds and the other investments that we are looking at is looking at increasing capacity of biiobased chemicals as we go forward. 13:42 13 minutes, 42 seconds Thank you and best wishes. Thank you. 13:50 13 minutes, 50 seconds Thank you. Before we take the next question, a reminder to all the participants that you may press star N1 13:56 13 minutes, 56 seconds to ask a question. The next question is from the line of Pratik Sha from Investing Alpha. Please go ahead. 14:05 14 minutes, 5 seconds Hello. Hi sir, I hope I'm audible. Yes, you're audible. 14:10 14 minutes, 10 seconds Yes. Uh so my first question is given that OMC tender allocations become in become binding supply obligations for 14:17 14 minutes, 17 seconds the entire ESY uh the ethanol supplier year. So once awarded how is Godavari preparing operationally and uh even 14:26 14 minutes, 26 seconds financially to service these mandate volumes especially in period where margins are under stress due to rising pain cost. 14:40 14 minutes, 40 seconds I will again ask you to repeat the question. I I heard that I understood your second part part of the question 14:47 14 minutes, 47 seconds which is how are we planning to service the contracts we have received. Is that correct? If that is it then I can answer that. 14:54 14 minutes, 54 seconds Right. Right. 14:56 14 minutes, 56 seconds So today the company there is undoubtedly the fact that cane prices have increased and ethanol land prices 15:06 15 minutes, 6 seconds have remained the same that has affected the margin compared to the previous year 15:12 15 minutes, 12 seconds that is for sure. However margins remain uh in the positive territory. So the company is looking at sourcing its cane 15:22 15 minutes, 22 seconds and converting cane juice to ethanol and be molasses to make the same available 15:28 15 minutes, 28 seconds for the tender that it has bid for. So we have bid for a tender for ethanol understanding the economic scenario and 15:38 15 minutes, 38 seconds based on the uh what we have received in the bids we will supply accordingly and that we will do every year looking at the economics. 15:51 15 minutes, 51 seconds Okay, I got it. At at the same time I do believe that going forward the country 15:59 15 minutes, 59 seconds is committed to moving forward on the green transition coupled with the prime minister's commitment to go to net zero. 16:08 16 minutes, 8 seconds When that happens including in the India energy week that happened there is a commitment to move towards green energy in which bofuels will be a large part. 16:20 16 minutes, 20 seconds Now that includes at the policy level what the government will do in terms of firstly just increasing the blend 16:28 16 minutes, 28 seconds because the use of B petroleum itself is increasing and they may be considering looking at higher blends or the 16:36 16 minutes, 36 seconds introduction greater introduction of flex fuel vehicles that will continue to happen. 16:46 16 minutes, 46 seconds Okay, I got it. Uh so another question is so could you explain the key reason behind the delay in commissioning the 16:54 16 minutes, 54 seconds grain based uh distillery and how this impacts your capacity utilization plans for the upcoming uh ethanol supplier and 17:03 17 minutes, 3 seconds additionally yeah please continue. 17:07 17 minutes, 7 seconds No they the commercialization of the grainbased facility was expected in this quarter. There has been some delay in 17:16 17 minutes, 16 seconds the receipt of equipment from the vendor that is now expected in the month of March which is next month and early 17:23 17 minutes, 23 seconds April. So we are now confident of the commissioning of the same by next quarter. 17:33 17 minutes, 33 seconds Okay sir, I got it. Thank you. 17:40 17 minutes, 40 seconds Thank you ladies and gentlemen. Anyone who wishes to ask a question may press star N1. The next question is from the line of Raj Patel from RK Capital. 17:51 17 minutes, 51 seconds Please go ahead. Uh Mr. Patel, your line is unmuted. 17:59 17 minutes, 59 seconds Please proceed. Yeah. Hi. Am I audible? Yes, you are. Yeah. So, thank you for the opportunity. 18:07 18 minutes, 7 seconds A few question from my side. So the first one was uh with the ethanol and the cane. Uh so as we saw that the 18:15 18 minutes, 15 seconds ethanol pricing for B heavy and the juice route have largely remained unchanged for the past couple of years while the cane cost have been continued 18:23 18 minutes, 23 seconds to rise. So how does this uh pricing uh freezing the impact of freezing uh 18:30 18 minutes, 30 seconds impacting the company's uh distillery margin and the feed stock decision and apart from that what are your expectations from the government on the 18:39 18 minutes, 39 seconds price revision and uh how have you internally planned scenarios if uh the government does not come with the 18:46 18 minutes, 46 seconds revision The 18:54 18 minutes, 54 seconds question on what we expect from the government. Let me answer that first. 19:00 19 minutes The industry has been requesting the government for an increase in the price 19:08 19 minutes, 8 seconds for ethanol from beehive molasses or from sugar cane juice commensurate with 19:15 19 minutes, 15 seconds the rise of increase in cane price that has happened over the last 2 to 3 years for which there is no corresponding 19:23 19 minutes, 23 seconds increase in ethanol price. So that's one expectation. 19:28 19 minutes, 28 seconds The second expectation is that we would like the government to further 19:35 19 minutes, 35 seconds incentivize the launch of flex fuel vehicles. 19:40 19 minutes, 40 seconds Flex fuel vehicles today have a different GST treatment than EVs. We 19:47 19 minutes, 47 seconds would like the government to look at a better treatment of flexible vehicles to 19:54 19 minutes, 54 seconds have this bofuel related demand increase in our country. India is very rich in the sun and the soil as a small farmer. 20:04 20 minutes, 4 seconds So policies we think for bofuel would certainly help and advance sustainability and our prime minister's commitment to achieve a net zero target. 20:14 20 minutes, 14 seconds That is the second. The government we could also request while flexible vehicles also happen. Simultaneously 20:23 20 minutes, 23 seconds working with the auto industry to increase the blend percentage would further increase demand. So these are what I will consider the three 20:32 20 minutes, 32 seconds expectations of what we would have from the government. repeating a better price 20:39 20 minutes, 39 seconds for ethanol delivered from bee molasses or from cane juice. Second would be a 20:47 20 minutes, 47 seconds better treatment of flexible vehicles to incentivize a greater adoption and third would be increasing the basic blend 20:55 20 minutes, 55 seconds itself. So this would help across the country and play to our advantages. 21:01 21 minutes, 1 second Your second question or your first question was how is the company dealing with this situation when the prices of 21:10 21 minutes, 10 seconds cane have gone up and ethanol have remained the same. Clearly the company remains the pressures on margin between 21:19 21 minutes, 19 seconds the two have definitely increased because gain prices have gone up and ethanol has remained the same. The 21:26 21 minutes, 26 seconds company's dealing with it by keeping its capacity utilization strong and and delivering ethanol as per the blend. 21:38 21 minutes, 38 seconds Simultaneously the company has also got ENA capacity to ensure that it meets the 21:45 21 minutes, 45 seconds needs of its capacity utilization. So this is how we are doing it. The addition of mazebased facility will add 21:52 21 minutes, 52 seconds a funible source of different feed stock that will better enable the company to optimize its product mix based on feed 22:01 22 minutes, 1 second stock and deliver to the market which makes most economic sense going forward. 22:10 22 minutes, 10 seconds Thank you sir that was really insightful. My next question was with regards to the spec camp. So as we saw that the specam have contributed 62% of the chemical basket in 9 month FI26. 22:23 22 minutes, 23 seconds So just wanted to understand what are the company's uh mid-term target for this share and uh how specific product 22:30 22 minutes, 30 seconds line are expected to drive the next phase of the high margin growth. 22:35 22 minutes, 35 seconds You know we would like to uh thank you for the question again. The strategy of the company continues to be to innovate 22:43 22 minutes, 43 seconds and co-create with customers to advance the green transition for our clients across India and the globe. 22:54 22 minutes, 54 seconds This is a exercise what I will call a patient exercise where co-creation means we work with customers in India or 23:03 23 minutes, 3 seconds abroad and look at the current fossil feed stock they are making see what kind of product we are making from a green 23:10 23 minutes, 10 seconds resource and see whether the utilization of that feed stock in their supply chain 23:17 23 minutes, 17 seconds helps improve their green transition and in many cases also improve product property. 23:24 23 minutes, 24 seconds Our recent MOU with Syntoma which is an MOU to show the use of our biomebased 23:33 23 minutes, 33 seconds butinol for the use of their monomer but acryate is one such exercise in 23:41 23 minutes, 41 seconds advancing this endeavor of making specialtity chemicals biobase come 23:47 23 minutes, 47 seconds forward. So our whole approach is to add capacity as well as debottleneck 23:56 23 minutes, 56 seconds capacity to continue to introduce chemicals biiobased tech chemicals with 24:03 24 minutes, 3 seconds our customer either again to reduce imports which come from overseas from fossil bases or sell overseas and this 24:11 24 minutes, 11 seconds remains our long-term strategy. We continue to see commitment of customers across the globe as Sintomer has just 24:20 24 minutes, 20 seconds shown. It is also an exercise in working and persevering and co-creating with them because when we create these these 24:27 24 minutes, 27 seconds are durable relationships that will last a longer time. 24:34 24 minutes, 34 seconds Got it sir. That was all from my side. 24:37 24 minutes, 37 seconds Thank you and all the best for the future. Thank you. 24:42 24 minutes, 42 seconds Thank you. Participants who wish to ask a question may press star and one. The next question is from the line of 24:50 24 minutes, 50 seconds Dhanjay Burgodia from Alchemy. Please go ahead. Hello. Hello. 24:58 24 minutes, 58 seconds Hi, good morning. We can hear you. 25:01 25 minutes, 1 second Good morning. Uh firstly congratulations on your new initiative. Just wanted to understand how are the a cancer uh cell 25:10 25 minutes, 10 seconds in terms of the molecules how are we on that and the new food product we were discussing how is that uh coming along 25:19 25 minutes, 19 seconds I heard your first question on cancer I'm not sure about the second I can second the food product the food product business okay 25:28 25 minutes, 28 seconds so again thank you for the question the company is advancing well in the development ment of its cancer molecule 25:37 25 minutes, 37 seconds to find a solution to treating triple negative breast cancer which is currently the hardest to treat breast 25:45 25 minutes, 45 seconds cancer variety. The way what we are doing we have finished our safety trials 25:51 25 minutes, 51 seconds and are preparing now to apply to the CDSPO for conducting preliminary trials for efficacy in patients. 26:03 26 minutes, 3 seconds While we are doing that, we have also now created a fullyowned step down 26:10 26 minutes, 10 seconds subsidiary in called Sajjen Therapeutics in the USA with a CEO and the chief 26:17 26 minutes, 17 seconds scientific adviser on the board on on that company to help find partners for us to be able to outlic this molecule. 26:27 26 minutes, 27 seconds the two efforts of working towards seeing our efficacy preliminary efficacy 26:34 26 minutes, 34 seconds trial and also to find partners for outlicensing this are meant to go hand 26:41 26 minutes, 41 seconds in hand. This is something that we have done in this last quarter and preparing. 26:50 26 minutes, 50 seconds Okay. And so what is our right to win in this? 26:56 26 minutes, 56 seconds So can you repeat the question? So in this cancer search we're refining company in ethanol. How how are we like 27:03 27 minutes, 3 seconds as an analyst supposed to understand how what is our right to win cuz there have been lot of global players also with much larger budgets trying to do something similar. 27:12 27 minutes, 12 seconds So Budavari has always been an innovation company and chemistry and biology has been our strong suit. Now 27:22 27 minutes, 22 seconds over the last 15 years that we have been working our total expenditure for developing this cancer molecule has only 27:29 27 minutes, 29 seconds been about 18 cr rupees over all these years. So we have been what I will say very frugal in our investment towards 27:39 27 minutes, 39 seconds this. If you look across the world then companies spend lots of money to take a molecule from preclinical into clinical. 27:52 27 minutes, 52 seconds So we are happy to state that our molecule has passed through all its preclinical tests which starts with cell 27:59 27 minutes, 59 seconds lines then goes into small animal testing and also come into clinical trials and finish the safety test successfully. 28:09 28 minutes, 9 seconds Now we are not a pharmaceutical company. 28:13 28 minutes, 13 seconds Our aim is to find large companies or small who are ready to outlic this from 28:21 28 minutes, 21 seconds us while we do a preliminary efficacy study to establish that it is having 28:28 28 minutes, 28 seconds better outcomes for those suffering from triple negative breast cancer. When we 28:35 28 minutes, 35 seconds met people before they wanted to know whether it is safe and whether there was a genetic mechanism of action we knew 28:44 28 minutes, 44 seconds and whether we also knew the preliminary efficacy in patients suffering from this. In the last couple of years we 28:53 28 minutes, 53 seconds have established that it is safe in humans one and second we have also found the mechanism of action. So these two 29:01 29 minutes, 1 second are done. The third step would be to show that it is actually working in humans like it has shown to have worked 29:10 29 minutes, 10 seconds in animals and if it does then people would be ready to outlic it and that's what we would do only utilizing our 29:18 29 minutes, 18 seconds chemistry and biology and science skills to take forward and uh okay sure we could speak offline 29:27 29 minutes, 27 seconds I had some more questions and so regarding the food uh business how is that coming along. How are we working on that? 29:35 29 minutes, 35 seconds So the whole aim for us, if I go back in time, was to transition from a company 29:43 29 minutes, 43 seconds that is selling sugar in the wholesale market to transition to sell sugar to 29:49 29 minutes, 49 seconds customers B2B as well as B2C in a brand and also to put associate products in 29:56 29 minutes, 56 seconds the brand. Over time, we are now having a very good portfolio of B2B customers 30:04 30 minutes, 4 seconds whom we work with that helps us have long-term visibility in sugar and have that market. And secondly, the our brand 30:13 30 minutes, 13 seconds Jana also has now been developed well, which is now selling quite well and we have just crossed 100 crores of sales in 30:21 30 minutes, 21 seconds the first 9 months. The idea was also to sell related products in the jivana brand such as brown sugar, such as 30:29 30 minutes, 29 seconds jaggery and other products that we are doing. So this is there to show ourselves stability and growth together 30:37 30 minutes, 37 seconds in a market such as sugar which combined with working with as I said industries and B2B and the brand gives us greater stability and growth in the market. 30:48 30 minutes, 48 seconds Sure. So this is more journey to become more value added instead of selling just basic now we can and just to understand how are we doing in terms of outlets how 30:57 30 minutes, 57 seconds how is the distribution reach been uh anything along those lines I don't have the number of outlets to so 31:06 31 minutes, 6 seconds as as at December uh 25 uh we are operating at approximately 7,500 plus 31:13 31 minutes, 13 seconds outlets which is in the last quarter it is 7,000 plus outlets So we are keep increasing the outcome. 31:21 31 minutes, 21 seconds Sure. And so how much are we looking to spend uh on this channel cuz see this is a little competitive sector. There are 31:29 31 minutes, 29 seconds already u quite a few large incumbents in this. How are we looking to do this? 31:35 31 minutes, 35 seconds Our aim is to always look at whether we are adding value to the overall product 31:43 31 minutes, 43 seconds basket and looking at a value in terms of also overall price stability. You see 31:51 31 minutes, 51 seconds when you a branded product the prices of the brand are sticky going up and going down and we wanted a little more 31:59 31 minutes, 59 seconds stability in the way we approach the market and growth in the product itself. 32:05 32 minutes, 5 seconds And so that's the so your question is reflecting to the brand or you're talking of overall sugar market. 32:11 32 minutes, 11 seconds No, no, for the brand uh and how much are we willing to spend on that brand building and how are we planning to see that uh cuz our food products are 32:20 32 minutes, 20 seconds something which we've been talking about on our PPTs also. So how are we thinking as a company regarding the same? 32:25 32 minutes, 25 seconds We are being frugal in that expense as well. continuously benchmarking with the business we do in the other selling of 32:34 32 minutes, 34 seconds sugar whether we do it in the open market or we do it with institutional sales or we do it when the export market 32:41 32 minutes, 41 seconds opens up. So we are frugal our objective is clear to have brand visibility and to 32:48 32 minutes, 48 seconds make sure that we have stability and growth in a market where we are seeing sugar supply and demand issues. So we 32:57 32 minutes, 57 seconds want to carve out a place for ourselves where there is a demand for our product whether it be the brand or whether it be an institutional purchaser. 33:07 33 minutes, 7 seconds Okay. And so going burning cash on this if that is your question. 33:10 33 minutes, 10 seconds Yeah. I want to understand how much uh so we're not burning cash on it and how and how much are we willing cuz see to steadily grow in this business we might 33:18 33 minutes, 18 seconds need to do a lot of capex to grow. Uh so any thoughts on what numbers it could be uh other it won't be meaningful for us 33:26 33 minutes, 26 seconds then we are not burning cash on this that's I mean that's a straight question straight answer to you we are growing the business and not burning cash on it 33:35 33 minutes, 35 seconds okay and incrementally how much are we willing to spend on this business it would be singledigit crores if if you want a answer like that 33:44 33 minutes, 44 seconds sure done and it's a pleasure and thank you so much for this 33:52 33 minutes, 52 seconds Thank you. The next question is from the line of Pankach Prasoon from HNI investment. Please go ahead. 34:02 34 minutes, 2 seconds Good morning Samir G. Morning team Gavi. Good morning. I think hope you all are doing well. 34:11 34 minutes, 11 seconds We are doing very well. 34:13 34 minutes, 13 seconds Great. Great to hear and congratulation on the new innovations you are putting in the market. So earlier the cancer 34:22 34 minutes, 22 seconds drug and uh dimeile itself and now this new monomers bio based monomers. So just 34:31 34 minutes, 31 seconds I want to understand how the things will go forward from here in terms of the base business. 34:38 34 minutes, 38 seconds uh I understand that uh our ethnol base this ethanol capacity is coming in the first quarter instead of the last quarter of this year. 34:48 34 minutes, 48 seconds So slight delay uh that is the nature of business that is not a worry at all. So that is one thing just can you throw 34:55 34 minutes, 55 seconds some light on the how when we are going to finish the commercial plant for the 35:03 35 minutes, 3 seconds dimethile ether and what kind of the market market do you look how how big it 35:10 35 minutes, 10 seconds can be in the same line the this uh biiobased monomers 35:17 35 minutes, 17 seconds how big this market can be over next 5 6 7 8 10 years and if we can throw some loud since uh lights because since you 35:26 35 minutes, 26 seconds have already mentioned that you are always focused on the innovation. So can you just throw some light on the pipeline of innovation you might have 35:34 35 minutes, 34 seconds done already. So it will be better for shareholder like us to stay invested for 35:40 35 minutes, 40 seconds long and it gives us more uh confidence etc. 35:47 35 minutes, 47 seconds So thank you for your question. You asked about two specific products that we are working on 35:55 35 minutes, 55 seconds dimethile ether. You talked about our monomer but not our monomer but the 36:03 36 minutes, 3 seconds butinol we make that will go for butile acryate and the third you ask for our pipeline. 36:10 36 minutes, 10 seconds So I'll answer your questions one by one. Dimethyl ether as we mentioned in the last call is a in the pilot phase. 36:21 36 minutes, 21 seconds This is a project we are doing in partnership with ICT that is Institute of Chemical Technology 36:29 36 minutes, 29 seconds and after successful work in the laboratory we have installed a pilot plant to understand the chemical 36:38 36 minutes, 38 seconds reaction kinetics and establish how it would work. So make it successful and 36:46 36 minutes, 46 seconds once successful plan a scale up. So the project is currently undergoing pilot 36:53 36 minutes, 53 seconds trials and progressing. So that's point one. The demand that we see for this 37:00 37 minutes that is the combination of carbon dioxide with hydrogen to make dimethile 37:07 37 minutes, 7 seconds ether which can be used as a energy substitute for diesel or LPG. That is 37:15 37 minutes, 15 seconds its largest demand. Although it can also be used as a chemical intermediate, there is great interest in this 37:24 37 minutes, 24 seconds technology because it is a platform technology. Platform technology in the 37:30 37 minutes, 30 seconds sense the whole world is looking at two things. They're looking the whole world is looking at many things but I will 37:37 37 minutes, 37 seconds talk about two of those things that the world is looking at. one is mitigating climate change and second is meeting 37:45 37 minutes, 45 seconds energy needs. Now this is a very exciting technology that meets both these things at the same time because it 37:54 37 minutes, 54 seconds is a carbon capture process and it converts that carbon which is captured into energy that the planet needs 38:04 38 minutes, 4 seconds circular climate climate change addressing and energy security. So it is a platform technology. Repeating the 38:13 38 minutes, 13 seconds point, it is currently under pilot trials and the trials are progressing as planned. So this is what my first 38:21 38 minutes, 21 seconds question is. It's a company as a company we are in research and in development. 38:28 38 minutes, 28 seconds So research and development does take time but it is a very exciting area that we are in. The second point is the 38:39 38 minutes, 39 seconds our recent MOU with synol. Now butinol is a product that we have been working on. It takes time to talk to customers 38:48 38 minutes, 48 seconds to use a biiobased substitute in place of what they have been using for decades. So we have been working with 38:57 38 minutes, 57 seconds this company for some time and we are very pleased that they are now ready to 39:04 39 minutes, 4 seconds introduce this and have signed an MOU with us to introduce this into their product formulations to make biiobased 39:12 39 minutes, 12 seconds butile acryate as they go forward. I will remind you that we have also signed a uh licensing deal with catalytics that 39:21 39 minutes, 21 seconds would help us also make biiobased butinol. Now it is always important that the creation of the market and the 39:30 39 minutes, 30 seconds investment of capital have to go hand in hand. We want to ensure that when we do make the investment we also have customers who are ready to do the 39:39 39 minutes, 39 seconds offtake. So this is a great milestone that we have achieved in addition to the having the licensing deal signed. So 39:48 39 minutes, 48 seconds that's point two. The third is the question of the pipeline. As a research company, we have a continuous pipeline 39:56 39 minutes, 56 seconds of products. That pipeline of products are two types. We're working with customers who want to advance their 40:05 40 minutes, 5 seconds lower carbon footprint. Working with customers who want to see whether our products which we are making today can 40:12 40 minutes, 12 seconds substitute to improve their performance because you could have a substitute with better performance. and also working 40:20 40 minutes, 20 seconds with customers to see new molecules that work that can be used into their supply chain. Fourth is also making other 40:29 40 minutes, 29 seconds molecules in the cancer biology such as the new patent that we have just secured for triple negative breast cancer. So it 40:37 40 minutes, 37 seconds is a continuous pipeline of molecules that we're working on and customers that we are working with and these will lead 40:46 40 minutes, 46 seconds to better capacity utilizations, new capacities and new business. 40:54 40 minutes, 54 seconds Great. So my next question is I think uh uh I think in uh just before the last phone call you have mentioned that by 41:02 41 minutes, 2 seconds 2029 you are likely to achieve close to 3,000 cr top 9 uh 10 to 11% EIA level. 41:11 41 minutes, 11 seconds So that is in right in the that direction we are progressing. 41:18 41 minutes, 18 seconds We had said that we would achieve a 3x I beta in 4 years time. Exactly. Okay. And we are working to working towards that 41:26 41 minutes, 26 seconds goal. Yes. Just to highlight the 3x uh with FI55. Yes. 41:34 41 minutes, 34 seconds Yeah. So that probably goes beyond little beyond 300 cr what I calculate that 41:41 41 minutes, 41 seconds we are not privy to your calculation but we are working to towards what we had uh said. 41:48 41 minutes, 48 seconds There is there is there is this is business. It will always be volatile. 41:52 41 minutes, 52 seconds That is not uh whatever you say that will happen. It is always an expectation. 41:58 41 minutes, 58 seconds So thank you sir. Thank you for that understanding. 42:01 42 minutes, 1 second Yeah we understand very well. One more question that we have that to interrupt. Uh sorry to interrupt sir please question. 42:10 42 minutes, 10 seconds Hello. Hello. Yes sir. You may have more question. 42:17 42 minutes, 17 seconds Okay. So uh only last question last last question from my side. Hello. 42:24 42 minutes, 24 seconds Yes sir, we we are here. 42:26 42 minutes, 26 seconds Yeah. Yeah. So last question from my side. So I just I wanted to know any development on that the biomposite product which is replacing plastic, MDF 42:33 42 minutes, 33 seconds and plyboard. So do we plan some strategy on that because that product is ready for us. 42:41 42 minutes, 41 seconds Right now we are working on the biiobased chemicals the dimethile ether continuing the grain based ethanol 42:48 42 minutes, 48 seconds implementation and the cancer biology development. 42:53 42 minutes, 53 seconds Okay fair enough sometimes you'll catch up to your separation. Thank you. Thank you. 42:59 42 minutes, 59 seconds Okay. 43:03 43 minutes, 3 seconds Thank you ladies and gentlemen. In order to ensure that the management will be able to address questions from all the participants in the conference, kindly 43:11 43 minutes, 11 seconds limit your questions to two per participant. If you have a follow-up question, please rejoin the team. 43:17 43 minutes, 17 seconds The next question is from the line of Rangan from Brillian Securities. Please go ahead. Good afternoon sir. 43:27 43 minutes, 27 seconds sir and paid at the time of global issue 353 and it is a duty of the promoters to 43:36 43 minutes, 36 seconds see that the market capitalization is well above that so be that as may be now I'd like to know that for the 9 months 43:45 43 minutes, 45 seconds period after writing of some exceptional income what is that exceptional uh write off 30 I mean 34 course or something 43:54 43 minutes, 54 seconds like uh it is something and you have made about 9 rupees 64 EPS for the 9 months 44:02 44 minutes, 2 seconds against last year 21 rupees but last year against 21 rupees EPS minus EPS you 44:10 44 minutes, 10 seconds have made minus 5.11 that means about 16 rupees you have made but here also you'll be making like that and what is 44:18 44 minutes, 18 seconds their estimation now the expansion is going on until what time The expansion will go on. What is the current 44:26 44 minutes, 26 seconds expansion for this year? How much amount capitalization and next year also how much and when it will stop so that it 44:34 44 minutes, 34 seconds will be a where the cash flow will be much better and how much turnover you can make at the end of the year say 44:42 44 minutes, 42 seconds three two three years from now on after that what will be the sugar turnover the other other things turn 44:50 44 minutes, 50 seconds over what be the percentage like that thank you say you have asked a lot of questions in 44:59 44 minutes, 59 seconds that I u I will make a simple statement in response. 45:07 45 minutes, 7 seconds We are progressing to add capacity in grainbased ethanol which is happening 45:15 45 minutes, 15 seconds right now. It was targeted to be completed in this quarter. It will be commissioned in the next quarter. That 45:22 45 minutes, 22 seconds is what is happening. We are also continuing to invest in debottlenecking 45:30 45 minutes, 30 seconds and addition of investments in biiobased chemicals to expand our 45:37 45 minutes, 37 seconds size of the biiobased specialtity chemicals as well as the margins of the 45:43 45 minutes, 43 seconds segment that is point 2. the question that you talked about regarding 45:50 45 minutes, 50 seconds uh exceptional items. We explained that in the last quarter call where there was an addition we had to pay additional 45:58 45 minutes, 58 seconds costs regarding harvesting and transport charges relating to something that happened in Maharashtra the year before and that is what we already explained in 46:07 46 minutes, 7 seconds the last call. I could refer you to listen to the call itself for that. In this particular quarter, we've had to 46:15 46 minutes, 15 seconds make an estimate for the costs that we may have to incur due to the implementation of the new labor code. 46:24 46 minutes, 24 seconds And so that is why we have made an additional provision in this quarter. But we are very bullish going forward. 46:32 46 minutes, 32 seconds Our advancement of increasing our uh products in the green transition which 46:39 46 minutes, 39 seconds include the ethanol blend as well as the biiobased chemicals are showing definitely 46:47 46 minutes, 47 seconds ways in which we are going to grow the business and take it forward in the next few years. 46:54 46 minutes, 54 seconds I have told you the macaron mixing there is some problem. Sorry to interrupt. 46:58 46 minutes, 58 seconds Yeah, sorry. Yeah, please rejoin the question. 47:03 47 minutes, 3 seconds See, I'm told because some ministers have told that there is some problem in the mixing of ethanol in the cars everything like that and some there 47:10 47 minutes, 10 seconds there was some news like that. What happened to that? Can you tell me? 47:15 47 minutes, 15 seconds So, so I am aware that E20 is working across the country and flex fuel cars 47:24 47 minutes, 24 seconds are operating all over in Brazil particularly which can take any degree of ethanol. Uh this is already 47:33 47 minutes, 33 seconds established globally. Introduction of flexual cars in the country will also make any blend of E20 to E00 possible. 47:41 47 minutes, 41 seconds Other than that what what has been spoken by others I am not aware of and cannot comment on. 47:50 47 minutes, 50 seconds Thank you. 47:55 47 minutes, 55 seconds A reminder to all the participants if you wish to ask a question please press star N1. The next question is from the line of Rajiv Jane from RK and Westman. 48:05 48 minutes, 5 seconds Please go ahead. Hello am I audible? Yes, you are. 48:11 48 minutes, 11 seconds Yeah, thank you for the opportunity. Uh, so firstly for the ethanol business, uh, 48:18 48 minutes, 18 seconds the road map includes both capacity expansion and portfolio diversification through upcoming green on May. So how do 48:26 48 minutes, 26 seconds you expect utilization level to trend over next 2 3 years and uh especially given current to work capacity in the 48:33 48 minutes, 33 seconds market and no revision in prices. If you see I am very optimistic about the green transition. 48:44 48 minutes, 44 seconds I do expect that the country let's let's take a step back. 48:50 48 minutes, 50 seconds The country had targeted for an E20 installation by 2030 48:57 48 minutes, 57 seconds and then we have advanced and reached that target by 2025. 49:03 49 minutes, 3 seconds So the policies that were in place were looking at a ecosystem for the use of an ethanol blend look at a target of 2030. 49:15 49 minutes, 15 seconds So then let's just keep that first thing in perspective. So what India has created is an enormous advantage of 49:24 49 minutes, 24 seconds creating a domestically grown green energy source where the supply is 17 49:32 49 minutes, 32 seconds billion L against a articulated demand of 10 to 11 billion L. That's just so that's first point. It now enables the 49:41 49 minutes, 41 seconds government to imagine a future which can once again be ambitious to reset the 49:49 49 minutes, 49 seconds next target for blending. Now that can take two forms. Either they change the blend itself or they create an 49:59 49 minutes, 59 seconds environment in which flexible vehicles come out much more. So and don't forget 50:05 50 minutes, 5 seconds the third aspect is India continues to grow. The projections by the car 50:13 50 minutes, 13 seconds companies and automakers is an enormous growth in the auto sector in the next 10 years. With that growth in the auto 50:21 50 minutes, 21 seconds sector, there will be an increase in petrol consumption which will also require great increases in the E20 blend 50:30 50 minutes, 30 seconds itself. So I am extremely bullish about this sector. I'm not looking at what happens year on year but you have to look at it in larger time snapshots. 50:42 50 minutes, 42 seconds India has reached E25 years ahead of schedule. It gives the increased supply of ethanol across the country with 50:50 50 minutes, 50 seconds multiple feed stocks. gives the government a chance to look at bolder targets as it go forward with the 50:59 50 minutes, 59 seconds increase in the requirement of mobility of the country. So I am very positive about this sector and I think this 51:06 51 minutes, 6 seconds sector is good for growth and it is important to look at it in longer time snapshots that what would happen in a year's time. 51:17 51 minutes, 17 seconds Understood sir understood. Um thank you for your elaborate answer. Uh no. 51:22 51 minutes, 22 seconds Secondly, uh with with a presence now across 7,500 plus uh outlets and entry into multiple news states. So what is 51:32 51 minutes, 32 seconds the retail expansion road map for FY26 and uh how does the company plan to strengthen uh their shelf presence and 51:40 51 minutes, 40 seconds repeat purchase behavior across general trade uh general trade, modern trade and e-commerce platform as well. 51:47 51 minutes, 47 seconds I would like to say that our expansion our sales of our brand have also surpassed our expectations. 51:57 51 minutes, 57 seconds Given that we are now going to look back at the portfolio and see how we deal with this opportunity that is in it it presents to us. 52:12 52 minutes, 12 seconds Did that answer your question or not? So my my answer to you is we reached this 7,500 outlet a little quicker than we 52:20 52 minutes, 20 seconds had imagined. So now with this with the success of reaching this we are now going to go back to the drawing board to see what we should do next. 52:30 52 minutes, 30 seconds All right sir. Thank you. That's really nice. Uh thank you and all the best for the future. Thank you. Thank you. 52:39 52 minutes, 39 seconds Thank you ladies and gentlemen. That was the last question for today and now hand the conference over to Mr. Samir Somaya for closing comments. Over to you sir. 52:49 52 minutes, 49 seconds I want to thank everybody for taking the time and being here for our conference call today. I look forward to speaking with you all soon. Thank you. 53:02 53 minutes, 2 seconds Thank you very much on behalf of MUFG investor relations team that concludes this conference. Thank you all for joining us today and you may now disconnect your lines.