💰 Financial Performance

Revenue Growth by Segment

H1 FY26 revenue reached INR 651.4 Cr, up 10.9% YoY. The Distillery segment grew 41.1% YoY to INR 133.66 Cr in H1 FY26. Power revenue increased 364% YoY to INR 0.44 Cr. The Sugar business contributed 72% of total revenue in FY24 (INR 1,230.9 Cr). Growth is driven by higher ethanol sales volumes and realizations.

Geographic Revenue Split

100% of revenue is generated from operations in Uttar Pradesh, India, specifically from the Bijnor and Bareilly districts where the three manufacturing plants are located.

Profitability Margins

FY25 Operating Margin (OPBDITA/OI) was 8.4%, down from 12.0% in FY24. PAT Margin for FY25 was 1.7% compared to 4.9% in FY24. H1 FY26 PAT margin further declined to -6.4% from -5.7% YoY due to unabsorbed overheads and high-valued opening inventory sales.

EBITDA Margin

H1 FY26 EBITDA margin was -5.3% (EBITDA loss of INR 34.52 Cr), a deterioration from -3.1% (EBITDA loss of INR 18.18 Cr) in H1 FY25. This was primarily caused by the early conclusion of crushing operations in SY2025, leading to lower operating leverage.

Capital Expenditure

Historical CAPEX includes the commissioning of the Dwarikesh Dham distillery in Bareilly. Planned CAPEX for future periods is not disclosed in available documents, though the company recently reached a distillery capacity of 337.5 KLPD.

Credit Rating & Borrowing

Long-term rating is [ICRA]AA- (Negative), reaffirmed in November 2024 with the outlook revised from Stable to Negative. Short-term rating for the INR 300 Cr Commercial Paper program is [ICRA]A1+.

⚙️ Operational Drivers

Raw Materials

Sugarcane (primary input, ~70-80% of total cost), Bagasse (internal byproduct for power), and Molasses (internal byproduct for ethanol).

Import Sources

100% domestic sourcing from the command areas in Bijnor and Bareilly districts, Uttar Pradesh, India.

Key Suppliers

Sourced from local farmers within the company's allocated command areas through established long-term relationships.

Capacity Expansion

Current crushing capacity is 21,500 TCD; distillery capacity is 337.5 KLPD (DN: 162.5, DD: 175); co-generation capacity is 94 MW. No specific future expansion timeline is disclosed.

Raw Material Costs

Sugarcane costs are determined by the State Advised Price (SAP) set by the Government of UP. Profitability is highly sensitive to SAP increases that are not matched by sugar MSP hikes.

Manufacturing Efficiency

Maintains one of the highest sugar recovery rates in Uttar Pradesh, which directly lowers the cost of production per unit of sugar.

Logistics & Distribution

Ethanol is supplied to nearby Oil Marketing Company (OMC) depots; distribution costs as a specific percentage of revenue are not disclosed.

📈 Strategic Growth

Expected Growth Rate

Not disclosed in available documents

Growth Strategy

Strategy focuses on forward integration into distillery and co-gen to mitigate sugar cyclicality. The company is increasing sucrose diversion to ethanol (214.99 lakh liters produced in H1 FY26, up 119% YoY) to capitalize on the government's 20% blending target.

Products & Services

Sugar, Ethanol, Industrial Alcohol, Rectified Spirit, and Power.

Brand Portfolio

Dwarikesh.

New Products/Services

Ethanol production via the sugarcane juice route and B-heavy molasses, supported by the expanded 337.5 KLPD distillery capacity.

Market Expansion

Expansion is focused on the ethanol blending program and increasing power evacuation to the state grid.

Market Share & Ranking

Recognized as a leading efficient operator in the Uttar Pradesh sugar industry with superior recovery rates.

🌍 External Factors

Industry Trends

The industry is evolving toward a 'Sugar-to-Ethanol' model to reduce surplus sugar supply. The government's 20% ethanol blending target by 2025-26 is a key driver for distillery segment growth.

Competitive Landscape

Competes with other large integrated sugar mills in Uttar Pradesh for sugarcane procurement and ethanol quotas.

Competitive Moat

Moat is built on integrated operations (Sugar + Distillery + Power) and high recovery rates. This structure is sustainable as it provides alternative revenue streams that cushion against the cyclicality of the sugar business.

Macro Economic Sensitivity

Highly sensitive to monsoon patterns affecting cane availability and government fiscal policies regarding ethanol blending and sugar export quotas.

Consumer Behavior

Not applicable as the business is primarily B2B and commodity-based.

Geopolitical Risks

International sugar prices impact export prospects and domestic demand-supply balance; however, MSP provides a floor for domestic prices.

⚖️ Regulatory & Governance

Industry Regulations

Heavily regulated by Central Government (MSP for sugar, Ethanol pricing) and State Government (UP-SAP for sugarcane). Pollution norms and ethanol blending mandates also dictate operational standards.

Environmental Compliance

Emissions and waste generation are within permissible limits prescribed by CPCB/SPCB. No pending show cause or legal notices were reported as of FY2022.

Taxation Policy Impact

Effective tax rate impacted by higher provisioning in FY25; H1 FY26 tax expense was -INR 23.96 Cr on a loss before tax of -INR 65.97 Cr.

Legal Contingencies

No major pending environmental or labor litigation with significant case values was disclosed in the provided documents.

⚠️ Risk Analysis

Key Uncertainties

Agro-climatic risks affecting cane production and regulatory shifts in ethanol pricing or blending targets could impact margins by 10-15%.

Geographic Concentration Risk

100% of manufacturing assets are located in Uttar Pradesh, creating high vulnerability to state-specific policy changes and local weather patterns.

Third Party Dependencies

High dependency on local farmers for sugarcane supply and the state electricity grid for power revenue.

Technology Obsolescence Risk

Low risk; the company has modernized distilleries to handle multiple feedstocks, including B-heavy molasses and sugarcane juice.

Credit & Counterparty Risk

Exposure to OMCs for ethanol and the state grid for power; OMCs are considered low-risk counterparties, while the state grid represents moderate risk.