AVADHSUGAR - Avadh Sugar

📊 NSE: AVADHSUGAR 🏢 Sugar 📅 Last Updated: 12/13/2025 18:46

💰 Financial Performance

Revenue Growth by Segment

For FY25, Sugar segment revenue grew 2.18% to INR 2,557.37 Cr. The Distillery segment revenue declined 17.24% to INR 485 Cr, and Co-Generation revenue declined 5.54% to INR 189.52 Cr. In Q2 FY26, total income was INR 670 Cr, up 5.68% from INR 634 Cr in Q2 FY25.

Geographic Revenue Split

The company operates 4 sugar mills in Uttar Pradesh and distributes products across 6 states. Specific percentage split per state is not disclosed.

Profitability Margins

Net profit margin declined from 4.75% in FY24 to 3.33% in FY25, a drop of 29.60% due to lower profit after tax. Operating profit margin decreased from 12.37% to 10.60% YoY.

EBITDA Margin

EBITDA in Q2 FY26 was INR 20 Cr (2.98% margin) compared to INR 36 Cr (5.67% margin) in Q2 FY25, representing a 44.4% decline in absolute EBITDA.

Capital Expenditure

The company completed the expansion of the Hargaon unit from 10,000 TCD to 13,000 TCD and de-bottlenecked the Seohara unit to 12,000 TCD for the 2025-26 season. Specific INR Cr values for these projects were not disclosed.

Credit Rating & Borrowing

The company reported a Debt Equity ratio of 1.24 in FY25, slightly improved from 1.28 in FY24. Interest coverage ratio declined from 4.09 to 3.26 YoY.

⚙️ Operational Drivers

Raw Materials

Sugarcane is the primary raw material, sourced from approximately 2.9 lakh connected farmers.

Import Sources

100% of sugarcane is sourced locally from the state of Uttar Pradesh, India.

Key Suppliers

The company sources raw materials from a network of 2.9 lakh individual farmers rather than corporate suppliers.

Capacity Expansion

Current licensed crushing capacity is 34,800 TCD. Hargaon unit expanded by 3,000 TCD to reach 13,000 TCD; Seohara unit de-bottlenecked to 12,000 TCD. Distillery capacity is 325 KLPD and Co-gen is 74 MW.

Raw Material Costs

Raw material costs are heavily influenced by the State Advised Price (SAP) for sugarcane set by the UP government. A recent SAP hike is expected to significantly raise production costs and squeeze margins.

Manufacturing Efficiency

Sugar recovery rate was 10.80% in FY25. The company aims for higher efficiency through its 'Avadh Way' process-driven approach.

Logistics & Distribution

The company distributes products across 6 states; specific logistics costs as a percentage of revenue are not disclosed.

📈 Strategic Growth

Growth Strategy

Growth is targeted through a 'Transformative Agenda' focusing on capacity expansion (Hargaon unit increase to 13,000 TCD), de-bottlenecking, and increasing ethanol blending in line with PSU OMC trends (targeting 15-20% blending).

Products & Services

Sugar, Spirits, Ethanol, Cogeneration (Power), and Sanitizers.

Brand Portfolio

Avadh Sugar & Energy Limited (part of the K.K. Birla Group/Birla Sugar).

New Products/Services

Sanitizers are produced as a by-product; ethanol production is being prioritized for blending programs.

Market Expansion

Expansion is focused on increasing crushing capacity and distillery output to meet rising ethanol demand from OMCs.

Market Share & Ranking

The company claims a top spot in India's sugar industry for efficiency and recovery rates over the past two years.

🌍 External Factors

Industry Trends

Industry is shifting toward ethanol; gross sugar production for 2025-26 is projected at 34.35 MMT with 3.40 MMT diverted to ethanol. Blending targets are moving from 12% toward 20%.

Competitive Landscape

Competes with other UP-based sugar mills; industry margins are currently pressured by SAP hikes and weak recovery.

Competitive Moat

Moat includes strategic location in UP (India's largest cane state), long-standing farmer relationships (2.9 lakh farmers), and integrated operations (sugar, distillery, power).