Ethanol stock in focus after it plans to invest ₹130 Cr in new 200-KLPD ethanol distillery

Ethanol stock is drawing attention as the company announces plans to establish a new 200 KLPD corn/grain-based distillery with an investment of Rs.130 crore. This move is aimed at enhancing ethanol production capacity and further strengthening its position in the market. 

Share Price Movement 

In Friday’s trading session, the share price of Godavari Biorefineries Ltd reached an intra-day high of Rs.339.55 per share, rising from its previous close of Rs.336.65 per share. However, the stock declined later to Rs.324.35 each. 

What happened 

Godavari Biorefineries Limited (GBL) has announced a strategic investment of around Rs.130 crore to establish a new 200 KLPD corn/grain-based distillery, aimed at boosting its ethanol production capabilities. 

This new facility will be integrated with the company’s existing operations, offering dual-feedstock flexibility to enhance operational efficiency. The expansion will allow GBL to use both corn and other grains, helping mitigate risks associated with supply disruptions, such as poor monsoons or changing policies. 

The investment, which will be financed through a combination of internal accruals and debt, is expected to be completed and commissioned by the fourth quarter of FY 2026. This initiative is aligned with GBL’s commitment to supporting India’s green energy goals. 

Management Commentary 

Mr. Samir Somaiya, Chairman and Managing Director of Godavari Biorefineries, stated, “We are investing in new corn/grain-based ethanol production to complement our existing sugarcane-based operations. This will give us a dual-feedstock capability and will ensure more resilient ethanol production, even during climate-related disruptions, and position us to meet the growing demand under India’s ethanol blending program. This expansion will help us maintain production stability and contribute to India’s energy security goals.” 

Products and Services 

Godavari Biorefineries offers a wide range of products, including ethanol for food, beverages, pharmaceuticals, and personal care, as well as bio-based chemicals like bio-ethyl acetate and 1,3-butanediol. 

The company also produces sugar and generates power. It operates two modern manufacturing facilities in Sakarwadi (Maharashtra) and Sameerwadi (Karnataka), equipped with advanced technology and international production standards. 

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Manufacturing Facility 

The company has an ethanol capacity of 570 KLPD, bio-based chemical capacity of approximately 1,17,826 MTPA, and generates 1,70,772 MWhr of power from cogeneration. It also crushes 24,07,038 MT of sugarcane.

Financial Performance 

Turning towards the financials of the company, Godavari Biorefineries Ltd reported Q2 FY25 revenue of Rs.321 crore, rising 34 percent from Rs.239 crore in Q2 FY24. However, Net losses of the company increased 15 percent to Rs.75 crore, from Rs.65 crore in the same period. 

Shareholding Pattern 

As of October 2024, the shareholding pattern of Godavari Biorefineries Ltd indicates that promoters hold 63.31 percent, Foreign Institutional Investors (FIIs) hold 1.28 percent, Domestic Institutional Investors (DIIs) account for 14.42 percent, and retail investors hold 20.99 percent of the shares. 

Company Profile 

Godavari Biorefineries Limited, established in 1956, is a leading Indian company specializing in the production of ethanol and bio-based chemicals. With integrated operations in sugar, power, and distillery, it serves diverse industries globally and emphasizes sustainability and innovation through its extensive research and development efforts. 

Written by – Siddesh S Raskar 

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