Suraj Industries - Suraj Industries

📊 BSE: 526211 🏢 Breweries & Distilleries 📅 Last Updated: 11/13/2025 15:25

💰 Financial Performance

Revenue Growth by Segment

Standalone revenue for the financial year 2024-2025 was INR 32.18 Cr, representing a 37.83% decrease from INR 51.77 Cr in the previous year. The liquor segment, focusing on contract manufacturing for RSGSM, and the textile segment (fabric) are the primary drivers, though standalone operations saw a significant scale reduction due to restructuring.

Geographic Revenue Split

The company primarily operates in Rajasthan (liquor bottling) and Uttar Pradesh (through associates), with textile operations previously in Silvassa. Specific percentage splits by region are not disclosed in available documents.

Profitability Margins

Standalone Net Profit Margin declined to -2.46% in FY2025 from 3.04% in FY2024. Operating Profit Ratio also fell to -1.68% from 6.29% YoY, a 126.7% decline, primarily due to reduced revenue and increased operating expenses.

EBITDA Margin

Operating Profit Ratio was -1.68% in FY2025, down from 6.29% in FY2024. This 126.7% decline reflects insufficient earnings to cover operating costs and interest expenses of INR 0.45 Cr.

Capital Expenditure

The company is undertaking a major expansion through its subsidiary, Carya Chemicals, with a total project cost of INR 405 Cr. This includes INR 50 Cr for a bottling unit (5 million cases), INR 175 Cr for an Ethanol plant (125 KLPD), and INR 180 Cr for an ENA unit (125 KLPD).

Credit Rating & Borrowing

ICRA downgraded the company's ratings to [ICRA]BBB (Stable)/[ICRA]A3+ in January 2025 from [ICRA]A-(Stable)/[ICRA]A2+ due to a sharp decline in scale. The ratings were subsequently withdrawn in July 2025 at the company's request. Finance costs for FY2025 were INR 0.45 Cr, mainly on unsecured and vehicle loans.

⚙️ Operational Drivers

Raw Materials

Key raw materials include Extra Neutral Alcohol (ENA) for the liquor business and crude derivatives (partially oriented yarn, fully drawn yarn) for the textile/fabric business, which account for the bulk of manufacturing costs.

Capacity Expansion

Current bottling capacity at the Ajmer plant is 1.25 lakh cases per month. Planned expansion via Carya Chemicals includes a 10 million case bottling license, 125 KLPD Ethanol capacity (Sept 2024), and 125 KLPD ENA capacity (Dec 2025).

Raw Material Costs

Raw material costs are highly sensitive to commodity inflation. In the textile segment, margins are impacted by fluctuations in crude-linked yarn prices, while liquor margins depend on ENA pricing and state-controlled procurement costs.

Manufacturing Efficiency

Inventory turnover ratio improved to 51.10 days in FY2025 from 75.02 days in FY2024, a 31.88% improvement despite lower turnover, indicating tighter stock management.

📈 Strategic Growth

Expected Growth Rate

Not disclosed in available documents

Growth Strategy

Growth is targeted through the commissioning of the Baran project (INR 405 Cr investment) which adds 125 KLPD of Ethanol and ENA capacity, providing backward integration. The company also aims to increase bottling volumes by acquiring additional RSGSM plants and leveraging its 20.08% stake in Shri Gang Industries for UP market exposure.

Products & Services

Rajasthan Made Liquor (RML), Country Liquor, Ethanol, Extra Neutral Alcohol (ENA), and Fabric (Lycra) manufactured from POY, FDY, and DTY.

Brand Portfolio

RSGSM (bottling partner), Suraj Industries, Carya Chemicals, Shri Gang Industries.

New Products/Services

Expansion into Ethanol and ENA production with expected commissioning in late 2024 and 2025, aimed at capturing government blending mandates and internal supply needs.

Market Expansion

Targeting the Rajasthan liquor market through expanded bottling and the Uttar Pradesh market via associate company Shri Gang Industries.

Strategic Alliances

Partnership with Ayodhya Finlease (JK Group) which holds a 20% stake in SIL and 10% in Carya Chemicals. Long-term relationship with RSGSM for exclusive bottling rights.

🌍 External Factors

Industry Trends

The liquor industry is shifting toward backward integration and ethanol blending (125 KLPD projects). The textile industry remains highly competitive with low product differentiation, forcing a shift toward more stable liquor-based revenue streams.

Competitive Landscape

Intense competition in the textile sector from fragmented players. In liquor, competition is regulated but subject to aggressive state-level bidding and policy shifts.

Competitive Moat

The company's moat is based on its strategic relationship with RSGSM (exclusive wholesale rights in Rajasthan) and its 20% stake in Shri Gang Industries. However, this is vulnerable to state policy changes.

Macro Economic Sensitivity

Highly sensitive to inflationary pressures which led to a 126.7% decline in operating profit ratio in FY2025 due to increased expenses and reduced consumer demand.

Consumer Behavior

Consumption degrowth observed due to inflationary pressures affecting discretionary spending on liquor and textiles.

⚖️ Regulatory & Governance

Industry Regulations

Liquor operations are strictly governed by the Rajasthan State Ganganagar Sugar Mills Limited (RSGSM) and state excise policies. Textile operations are subject to environmental norms for manufacturing units.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the 'Prohibition' risk in Rajasthan, which would halt the core liquor business. Additionally, the 37.83% revenue decline in FY2025 highlights the risk of business restructuring and scale volatility.

Geographic Concentration Risk

High concentration in Rajasthan for the liquor business and Silvassa for textile manufacturing.

Third Party Dependencies

Critical dependency on RSGSM for liquor bottling contracts and Ayodhya Finlease for capital infusion.

Technology Obsolescence Risk

The textile segment faces risks from older knitting machines; the company is addressing this by adding new machines and capacity enhancement from internal accruals.