KCPSUGIND - KCP Sugar &Inds.

📊 NSE: KCPSUGIND 🏢 Sugar 📅 Last Updated: 12/14/2025 8:52

💰 Financial Performance

Revenue Growth by Segment

Total Operating Income (TOI) decreased by 22.6% from INR 293.7 Cr in FY24 to INR 227.35 Cr in FY25. The Black Gram segment showed significant growth, contributing 20.2% of TOI in FY25 compared to only 3.9% in FY24, while the sugar segment faced declines due to lower cane availability.

Geographic Revenue Split

100% of manufacturing operations are concentrated in Andhra Pradesh, specifically the Krishna River delta region (Vuyyuru and Lakshmipuram) and Tamil Nadu (Trichy engineering unit).

Profitability Margins

Net Profit Margin (PAT/OI) declined from 19.2% in FY24 to 11.8% in 9MFY25. Profitability is heavily impacted by the cyclicality of sugar prices and cane recovery rates.

EBITDA Margin

Operating profit margin (OPBDIT/OI) turned negative at -18.1% in 9MFY25 compared to 4.4% in FY24. PBILDT dropped from INR 11.64 Cr in FY24 to a loss of INR 4.30 Cr in FY25 due to lower cane recovery and higher variable costs.

Capital Expenditure

No major debt-funded capital expenditure is planned for the near term. Historical focus has been on the INR 22,000 MTPA black gram unit completed in February 2023.

Credit Rating & Borrowing

CARE A-; Stable (Reaffirmed in October 2025). The company maintains a comfortable capital structure with an overall gearing of 0.30x as of March 31, 2025, down from 0.41x in FY24.

⚙️ Operational Drivers

Raw Materials

Sugarcane (primary input for sugar and distillery) and Black Gram (urad dal) for the processing unit. Sugarcane costs are highly variable based on climatic conditions and government-mandated pricing.

Import Sources

Sourced locally from the fertile Krishna River delta region in Andhra Pradesh to minimize logistics costs and ensure freshness for crushing.

Key Suppliers

Procured directly from local farmers; the company maintains long-standing relationships with a large base of growers in the Krishna district.

Capacity Expansion

Sugar crushing: 7,500 TCD; Distillery: 50 KLPD; Co-generation: 15 MW; Black Gram processing: 22,000 MTPA (added Feb 2023); Pharma-grade calcium lactate: 500 TPA.

Raw Material Costs

Raw material costs are a significant portion of revenue; lower cane recovery rates in the Krishna delta have increased the effective cost per unit of sugar produced, leading to operational losses in the sugar segment.

Manufacturing Efficiency

Cane recovery rates have been lower than historical averages, negatively impacting manufacturing efficiency and increasing the cost of production.

Logistics & Distribution

Distribution costs are managed through the integrated nature of the Vuyyuru complex, which processes by-products (molasses, bagasse) on-site.

📈 Strategic Growth

Expected Growth Rate

Not disclosed in available documents

Growth Strategy

The company is pivoting toward non-sugar verticals, specifically the black gram processing unit which grew its revenue share to 20.2% in FY25. It also focuses on high-value pharma-grade calcium lactate (500 TPA) and bio-fertilizers to improve blended margins.

Products & Services

Sugar, Ethanol/Alcohol, Electricity (Cogeneration), Pharma-grade Calcium Lactate, Carbon Dioxide, Bio-fertilizers, Mycorrhiza, and Processed Black Gram (Urad Dal).

Brand Portfolio

KCP Sugar.

New Products/Services

Black gram processing (22,000 MTPA) launched in Feb 2023 is the primary new revenue driver, contributing over 20% of TOI within two years.

Market Expansion

Expansion into the agricultural food processing sector (Black Gram) to leverage existing farmer relationships in Andhra Pradesh.

Market Share & Ranking

The company is a significant regional player in Andhra Pradesh with an 80-year track record.

Strategic Alliances

Operates through subsidiaries including The EIMCO K.C.P. Ltd. and KCP Sugars Agricultural Research Farms Ltd.

🌍 External Factors

Industry Trends

The industry is shifting toward an 'Energy and Food' complex model, where sugar mills act as biorefineries producing ethanol for fuel blending and food products like pulses.

Competitive Landscape

Competes with other integrated sugar mills in South India and unorganized players in the pulses (black gram) processing sector.

Competitive Moat

Durable moat built on 80 years of brand equity and deep-rooted farmer relationships in the Krishna delta, which are difficult for new entrants to replicate.

Macro Economic Sensitivity

Highly sensitive to agricultural inflation and monsoon patterns which dictate raw material pricing and availability.

Consumer Behavior

Increasing demand for pharma-grade ingredients and branded staples (pulses) supports the company's diversification strategy.

Geopolitical Risks

Global sugar supply-demand balances influence domestic pricing, though the company mitigates this through domestic value-added products.

⚖️ Regulatory & Governance

Industry Regulations

Strictly regulated by the Essential Commodities Act, sugar export-import policies, and state-mandated cane pricing (SAP/FRP).

Environmental Compliance

Operates effluent treatment and pollution control systems commensurate with sugar and distillery standards; costs are integrated into operational expenses.

Taxation Policy Impact

Subject to standard corporate tax rates; fiscal policies regarding ethanol blending prices significantly impact distillery profitability.

⚠️ Risk Analysis

Key Uncertainties

Raw material risk is the highest uncertainty; lower cane availability led to a negative interest coverage ratio of -4.9 in 9MFY25.

Geographic Concentration Risk

High concentration risk with primary manufacturing assets located in a single district (Krishna, AP), making the company vulnerable to regional weather disruptions.