SBEC Sugar - SBEC Sugar

📊 BSE: 532102 🏢 Sugar 📅 Last Updated: 11/13/2025 15:25

💰 Financial Performance

Revenue Growth by Segment

Total income for FY 2024-25 was INR 621.58 Cr, representing a 3.57% decline from INR 644.61 Cr in FY 2023-24. Segment-specific revenue splits were not explicitly detailed in absolute INR values, though the company operates in sugar production and bioenergy through subsidiaries.

Geographic Revenue Split

The company's operations are concentrated in Western Uttar Pradesh, specifically at Village Malakpur, Baghpat. 100% of manufacturing revenue is derived from this region.

Profitability Margins

The company reported a Net Profit Margin of -1.90% for FY 2024-25, a significant decline from a positive 0.72% in FY 2023-24. Operating Profit Margin also softened slightly to 6.83% from 7.09% YoY.

EBITDA Margin

EBITDA for FY 2024-25 was INR 42.48 Cr with a margin of 6.83%, compared to INR 45.67 Cr and a 7.09% margin in FY 2023-24, reflecting a 6.98% decrease in absolute EBITDA.

Capital Expenditure

The company completed the first phase of capacity expansion to 9,000 TCD operative from the 2022-23 season. It is currently augmenting capacity further to 10,000 TCD, having received the necessary Consolidated Consent to Operate (CCA).

Credit Rating & Borrowing

Not disclosed in available documents; however, the Interest Coverage Ratio declined from 2.09 times in FY 2024 to 1.15 times in FY 2025, indicating increased pressure on debt servicing.

⚙️ Operational Drivers

Raw Materials

Sugarcane is the primary raw material, accounting for the vast majority of input costs. The company crushed 128.49 Lac Qtl of cane in the 2024-25 season, a 4.33% decrease from 134.31 Lac Qtl in the previous season.

Import Sources

Raw materials are sourced locally from the sugarcane-rich belt of Western Uttar Pradesh, specifically around the Baghpat district.

Key Suppliers

Sugarcane is sourced from local farmers within the factory's designated command area in Western UP.

Capacity Expansion

Current installed capacity is 9,000 TCD (Tons of Cane per Day). The company is actively expanding this to 10,000 TCD following regulatory approval from the UP Pollution Control Board.

Raw Material Costs

Sugarcane costs are dictated by the State Administrative Price (SAP). High cane arrears remain a weakness, and unviable SAP increases by the State Government directly impact profitability as they are not linked to market sugar prices.

Manufacturing Efficiency

Sugar production was 13.82 Lac Qtl in 2024-25, down 9.44% from 15.26 Lac Qtl in 2023-24. Recovery rates dropped from 11.34% to 10.72% YoY.

📈 Strategic Growth

Expected Growth Rate

18%

Growth Strategy

Growth will be driven by expanding crushing capacity to 10,000 TCD and leveraging the Ethanol Blending Programme. The subsidiary SBEC Bioenergy Limited is central to this, utilizing molasses to produce 1st Generation (1G) ethanol, supported by government financial assistance for capacity augmentation.

Products & Services

Primary products include refined sugar, ethanol (produced from molasses), and power (via bagasse co-generation).

Brand Portfolio

SBEC Sugar.

New Products/Services

Expansion into 1G ethanol production from feedstocks like cereals and sugarcane juice under the modified government scheme.

Market Expansion

Focus remains on maximizing recovery and production at the Malakpur plant while exploring increased ethanol supply under the national blending initiative.

Market Share & Ranking

Not disclosed in available documents; however, the company is noted as having one of the most modern and efficient sugar factories in India.

Strategic Alliances

The company is a member of the Umesh Modi Group of Companies. Material subsidiaries include SBEC Bioenergy Limited and SBEC Stockholding and Investment Limited.

🌍 External Factors

Industry Trends

The industry is shifting toward energy and fuel production. ISMA projects an 18% recovery in output for 2025-26 to 34.9 MMT. The sector is transitioning from pure sugar production to a 'sugar-ethanol-power' complex.

Competitive Landscape

The Indian sugar industry is one of the largest globally; SBEC competes with other mills in the Western UP region for cane supply.

Competitive Moat

Moat is based on its location in a high-sucrose sugarcane belt and its modern 9,000 TCD plant. Sustainability depends on maintaining high recovery rates (currently 10.72%) and managing state regulatory relationships.

Macro Economic Sensitivity

Highly sensitive to state-level agricultural policies (SAP) and national ethanol blending mandates.

Consumer Behavior

Stable retail prices despite production shortfalls due to high carry-forward stocks of 8-9 MMT.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by the Sugarcane (Control) Order, the Ethanol Blending Programme, and state-mandated SAP for cane procurement.

Environmental Compliance

The company received CCA (Consolidated Consent to Operate) for 10,000 TCD under the Water and Air Pollution Control Acts.

Legal Contingencies

The Supreme Court (order dated March 4, 2025) directed the promoter group to make a public announcement for an open offer and pay 10% p.a. interest from the date of violation of SAST Regulations. Auditors issued a qualified report for both standalone and consolidated financial results.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the mismatch between state-fixed cane prices and market-driven sugar prices, which led to a net loss margin of -1.90% this year.