BAJAJHIND - Bajaj Hindusthan

📊 NSE: BAJAJHIND 🏢 Sugar 📅 Last Updated: 12/13/2025 18:55

💰 Financial Performance

Revenue Growth by Segment

Total revenue from operations decreased by 8.76% YoY to INR 5,544.35 Cr in FY25 from INR 6,076.56 Cr in FY24. The decline is primarily driven by the sugar segment's cyclicality and seasonal nature, where Q2 FY26 standalone revenue also showed a decline to INR 1,155.69 Cr.

Geographic Revenue Split

The company primarily operates in India, specifically Uttar Pradesh, which contributes nearly 100% of operational revenue. International subsidiaries in Singapore and Indonesia (PT Batu Bumi Persada, PT Jangkar Prima) contributed a negligible INR 0.07 Cr in revenue for the quarter ended September 30, 2025.

Profitability Margins

Net profit before tax margin improved from -1.58% (Loss of INR 95.90 Cr) in FY24 to 0.08% (Profit of INR 4.38 Cr) in FY25. However, total comprehensive income for FY25 was a loss of INR 130.09 Cr, a significant decline from the INR 5.76 Cr loss in FY24 due to reclassification items.

EBITDA Margin

Operating profit before working capital changes stood at INR 295.95 Cr in FY25, representing a margin of 5.34%, compared to INR 350.20 Cr (5.75% margin) in FY24. The 15.49% YoY decrease in absolute operating profit reflects higher operational pressures despite lower material costs.

Capital Expenditure

Property, plant, and equipment (PPE) decreased from INR 6,390.54 Cr in FY24 to INR 6,188.91 Cr in FY25, indicating a lack of major new CAPEX and a focus on asset maintenance and depreciation (INR 210.70 Cr in FY25).

Credit Rating & Borrowing

The company has a delay-free track record since December 2023. Borrowing costs are high due to a leveraged capital structure, though finance costs decreased by 38.38% YoY to INR 95.94 Cr in FY25 from INR 155.70 Cr in FY24 following debt reductions.

⚙️ Operational Drivers

Raw Materials

Sugarcane is the primary raw material, accounting for INR 4,361.03 Cr or 78.6% of total revenue in FY25. Other materials include chemicals for processing and molasses for distillery operations.

Import Sources

Sugarcane is sourced locally from farmers in Uttar Pradesh, India, to feed the company's 14 sugar mills. This localized sourcing is critical to minimize transport costs and prevent sucrose degradation.

Key Suppliers

The primary suppliers are individual cane farmers and local farmer cooperatives in the catchment areas of the mills in Uttar Pradesh.

Capacity Expansion

Current installed capacity is 1.36 lakh tonnes of sugarcane crushed per day (TCD), making it one of the largest producers in India. No specific expansion timeline for TCD was disclosed, as the focus is on ethanol and power diversification.

Raw Material Costs

Raw material costs decreased by 11.98% YoY to INR 4,361.03 Cr in FY25, tracking the 8.76% decline in revenue. Procurement is governed by the State Advised Price (SAP) in Uttar Pradesh, which limits the company's ability to negotiate lower input prices.

Manufacturing Efficiency

Efficiency is measured by the sugar recovery rate from cane. The company maintains a diversified revenue profile across 14 mills to optimize regional crop variations.

Logistics & Distribution

Distribution costs are tied to the proximity of mills to the sugarcane supply and the proximity of distilleries to oil marketing company (OMC) depots for ethanol blending.

📈 Strategic Growth

Growth Strategy

The strategy focuses on debt reduction and operational stabilization. The company successfully saw the withdrawal of an SBI insolvency petition in Oct 2023. Growth is targeted through the ethanol blending program and maximizing co-generation power sales to improve the margin profile beyond cyclical sugar sales.

Products & Services

The company sells white crystal sugar, fuel-grade ethanol, industrial alcohol (rectified spirit), and surplus bagasse-based power to the state grid.

Brand Portfolio

Bajaj Hindusthan Sugar.

New Products/Services

Expansion of ethanol production capacity to meet the Government of India's 20% blending target is expected to be a major revenue contributor, though specific % targets were not disclosed.

Market Expansion

The company is focused on the domestic Indian market, particularly the North Indian sugar market and national ethanol supply contracts with OMCs.

Market Share & Ranking

The company is one of the largest sugar producers in India by crushing capacity (1.36 lakh TCD).

Strategic Alliances

The company operates through several subsidiaries including Bajaj Power Generation Private Limited (100%) and Phenil Sugars Limited (99.70%).

🌍 External Factors

Industry Trends

The industry is shifting toward a 'Sugar-to-Ethanol' model. The Indian government's push for 20% ethanol blending by 2025 is a structural shift that provides a more stable and higher-margin revenue stream compared to volatile sugar prices.

Competitive Landscape

Competes with other large integrated sugar players like Balrampur Chini, Triveni Engineering, and Shree Renuka Sugars.

Competitive Moat

The company's moat is its massive scale (1.36 lakh TCD) and established relationships with thousands of cane farmers. However, this is offset by high debt and regulatory controls on pricing.

Macro Economic Sensitivity

Highly sensitive to rural income levels and inflation. Inflation in labor and transport costs directly impacts the cost of production per quintal of sugar.

Consumer Behavior

Increasing industrial demand for ethanol and steady domestic consumption of sugar drive demand.

Geopolitical Risks

Minimal direct impact, though global sugar price fluctuations (influenced by Brazil and Thailand) can affect domestic export-import policies and domestic prices.

⚖️ Regulatory & Governance

Industry Regulations

Operations are heavily regulated by the Essential Commodities Act, the Sugar Control Order, and state-specific sugarcane pricing (SAP) and reservation area policies.

Environmental Compliance

Distilleries are subject to strict 'Zero Liquid Discharge' (ZLD) norms, requiring significant investment in effluent treatment plants.

Taxation Policy Impact

The company reported a tax expense of zero for FY25 due to carried forward losses and timing differences.

Legal Contingencies

The company faced an insolvency petition by SBI which was withdrawn in October 2023. There is a significant contingent liability regarding Yield to Maturity (YTM) payable on the redemption of Optionally Convertible Debentures (OCDs).

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the 'Going Concern' status, as auditors noted material uncertainties due to continuous losses and high current liabilities (INR 4,080.82 Cr) exceeding current assets.

Geographic Concentration Risk

100% of manufacturing assets are concentrated in Uttar Pradesh, making the company vulnerable to state-specific policy changes and regional weather patterns.