💰 Financial Performance

Revenue Growth by Segment

In H1FY26, total segment revenue before eliminations was INR 1,109.71 Cr. The Sugar segment contributed INR 806.73 Cr (72.7%), Power INR 136.42 Cr (12.3%), Distillery INR 153.87 Cr (13.9%), and Granite Products INR 12.68 Cr (1.1%). Overall revenue in FY25 declined 19% to INR 1,794 Cr from INR 2,222 Cr in FY24 due to lower sugar production volumes (28 lakh quintals vs 44 lakh quintals).

Geographic Revenue Split

Operations are primarily concentrated in Southern India, specifically Tamil Nadu and Karnataka, where the company's sugar mills and distilleries are located. Specific percentage splits by state are not disclosed, but the company is noted as a major player in the southern states.

Profitability Margins

PBILDT margins have shown volatility due to raw material availability: 12.09% in FY23, improving to 13.97% in FY24, then contracting to 11.78% in FY25. Net Profit (PAT) for H1FY26 stood at INR 57.95 Cr compared to INR 40.70 Cr in H1FY25, representing a 42.4% YoY increase.

EBITDA Margin

The PBILDT margin was 11.26% in H1FY26. Core profitability is sensitive to sugar realizations, which rose 4.4% from INR 3,670/quintal in FY24 to INR 3,833/quintal in FY25, partially offsetting volume declines.

Capital Expenditure

The company plans maintenance-related capital expenditure of approximately INR 40-50 Cr for FY25, to be funded entirely through internal accruals. No major debt-funded capex is planned for the medium term.

Credit Rating & Borrowing

CareEdge Ratings maintains a 'Stable' outlook. The company has significantly reduced leverage, with overall gearing improving from 0.37x in FY23 to 0.08x by March 31, 2025. Term loans were reduced from INR 157.56 Cr in March 2024 to INR 68.09 Cr by September 2024 through prepayments.

⚙️ Operational Drivers

Raw Materials

Sugarcane is the primary raw material, accounting for the bulk of the INR 1,109.71 Cr cost of materials consumed in H1FY26. Other inputs include granite blocks for the granite division.

Import Sources

Sugarcane is sourced locally from catchment areas surrounding the mills in Tamil Nadu and Karnataka to ensure freshness and high recovery rates.

Key Suppliers

Raw materials are primarily sourced from a large network of individual farmers in the rural communities surrounding the manufacturing units.

Capacity Expansion

Current installed capacities include 23,700 TCD in the sugar division, 127.50 KLPD in distilleries, 129.80 MW of co-generation power, and 8.75 MW of wind power capacity.

Raw Material Costs

Cost of materials consumed represented approximately 112% of net revenue in H1FY26 (INR 1,109.71 Cr against INR 990.27 Cr net revenue) before accounting for inventory changes of INR 1,139.33 Cr. Procurement is driven by Fair and Remunerative Price (FRP) and State Advised Price (SAP) regulations.

Manufacturing Efficiency

Efficiency is measured by sugarcane recovery rates, which have been lower in southern states recently due to agro-climatic conditions. Sugar production fell by 36% YoY in FY25 due to these factors.

Logistics & Distribution

Distribution costs are included within other expenses; however, the company benefits from proximity to sugarcane growing regions which minimizes inbound logistics costs.

📈 Strategic Growth

Expected Growth Rate

8-10%

Growth Strategy

Growth will be driven by the recovery of sugarcane availability following better monsoons in FY26, increasing the scale of distillery operations, and maintaining an integrated model to capture value from by-products. The company is also focusing on debt-free operations by prepaying term loans to improve net margins.

Products & Services

Refined sugar, industrial alcohol, potable alcohol, bio-compost, granite slabs/tiles, and surplus power sold to the grid.

Brand Portfolio

Bannari Amman Sugars.

New Products/Services

The company continues to focus on its core integrated segments; no specific new product launches with revenue % were disclosed in the provided documents.

Market Expansion

The company maintains its established market position in Southern India; specific expansion timelines for new regions were not disclosed.

Market Share & Ranking

BASL is the flagship company of the Bannari Amman Group and is one of the largest sugar producers in South India.

Strategic Alliances

Not disclosed.

🌍 External Factors

Industry Trends

The industry is shifting toward an ethanol-heavy model supported by the government's ethanol blending program, which aims to reduce sugar surpluses and improve mill liquidity.

Competitive Landscape

The industry is highly fragmented and competitive, consisting of both private mills and cooperative societies, all regulated by state and central policies.

Competitive Moat

The company's moat is built on its 40-year operational track record and its fully integrated manufacturing setup, which provides a cushion against the cyclicality of the standalone sugar business.

Macro Economic Sensitivity

Highly sensitive to the Wholesale Price Index (WPI) as sugar is a critical food commodity, leading to frequent government price interventions.

Consumer Behavior

Increasing demand for ethanol as a green fuel is a significant trend shift benefiting the company's distillery division.

Geopolitical Risks

Global sugar price volatility impacts domestic pricing and export feasibility, particularly during surplus production years.

⚖️ Regulatory & Governance

Industry Regulations

Operations are heavily regulated by the Essential Commodities Act, including Fair and Remunerative Price (FRP) for cane, sugar release quotas, and ethanol procurement prices set by the government.

Environmental Compliance

The company spent INR 4.21 Cr on CSR activities in FY25, exceeding its statutory obligation of INR 4.09 Cr. It focuses on rural community development and environmental mitigation in its labor-intensive operations.

Taxation Policy Impact

The company provided for a current tax of INR 31.35 Cr for H1FY26. The effective tax rate is subject to standard corporate tax norms in India.

Legal Contingencies

The company affirmed compliance with all Corporate Governance requirements under SEBI (LODR) Regulations 2015, as certified by independent auditors. No specific pending litigation values were disclosed.

⚠️ Risk Analysis

Key Uncertainties

Agro-climatic risk is the highest uncertainty; scanty rainfall can reduce revenue by nearly 20% as seen in the FY24-FY25 transition. Regulatory risk regarding ethanol pricing and export bans also poses significant margin threats.

Geographic Concentration Risk

High concentration in Southern India (Tamil Nadu and Karnataka), making the company vulnerable to regional weather patterns and state-specific sugarcane pricing (SAP).

Third Party Dependencies

High dependency on local sugarcane farmers for raw material supply; any shift in farmer preference toward alternate crops directly impacts capacity utilization.

Technology Obsolescence Risk

Low risk in core sugar processing, but the company must keep pace with evolving distillery technologies for ethanol production.

Credit & Counterparty Risk

The company maintains a strong liquidity position with free cash of INR 18.72 Cr and low working capital utilization (9.06%), suggesting low counterparty risk.