KMSUGAR - KM Sugar Mills

📊 NSE: KMSUGAR 🏢 Sugar 📅 Last Updated: 12/14/2025 8:56

💰 Financial Performance

Revenue Growth by Segment

Total Operating Income grew marginally by 0.28% to INR 659.01 Cr in FY25 from INR 657.16 Cr in FY24. The Sugar segment results grew 34.4% to INR 64.86 Cr, while the Distillery segment results declined 69.8% to INR 2.23 Cr.

Geographic Revenue Split

Not disclosed in available documents, but the company's primary operations and plants are located in Motinagar, Faizabad, Uttar Pradesh.

Profitability Margins

Net profit ratio improved by 112 bps to 5.39% in FY25 from 4.27% in FY24. Return on Equity (ROE) increased to 11.08% from 9.71% YoY, and Return on Capital Employed (ROCE) rose to 17.79% from 15.76%.

EBITDA Margin

Not explicitly stated as a percentage, but Profit Before Tax (PBT) grew 25.08% to INR 48.92 Cr in FY25 from INR 39.11 Cr in FY24, indicating improved core profitability.

Capital Expenditure

Not disclosed in available documents for future plans; however, the company maintained a Tangible Net Worth (TNW) of INR 214.54 Cr as of March 31, 2023.

Credit Rating & Borrowing

Credit rating reaffirmed at IVR A-/Stable for long-term facilities and IVR A2+ for short-term facilities as of July 11, 2025. Finance costs were INR 18.17 Cr in FY25, up 9.85% from INR 16.54 Cr in FY24.

⚙️ Operational Drivers

Raw Materials

Sugarcane is the primary raw material, with procurement governed by the Sugarcane (Control) Order, 1966. Bagasse is used as a secondary raw material for power generation.

Import Sources

Sourced locally from the command area allocated to the mill in Uttar Pradesh, as mandated by government regulations.

Key Suppliers

Sourced from local farmers within the Masodha, Ayodhya, and Faizabad command areas.

Capacity Expansion

Current installed capacity includes a sugar plant of 9,500 TCD, a distillery of 50 KLPD, and a cogeneration plant of 25 MW. No specific expansion timeline was disclosed.

Raw Material Costs

Not disclosed as a specific percentage of revenue, but performance is highly dependent on sugarcane availability and recovery rates, which stood at 11.01% in SY25 compared to 11.35% in SY24.

Manufacturing Efficiency

Sugar recovery rate was 11.01% in SY25 (down from 11.35% in SY24). The crushing period decreased to 121 days in SY25 from 144 days in SY24.

📈 Strategic Growth

Growth Strategy

Growth is driven by integrated operations that allow for multiple revenue streams (sugar, ethanol, and power). The company focuses on improving recovery rates and maintaining a comfortable capital structure to support financial flexibility.

Products & Services

Sugar, industrial alcohol, ethanol, and surplus power supplied to the Uttar Pradesh Power Corporation Limited.

🌍 External Factors

Industry Trends

The industry is moving toward integrated models to mitigate cyclicality, with a strong focus on ethanol blending programs supported by government policy.

Competitive Landscape

The company operates in a cyclical and fragmented industry with competition from other sugar mills in the Uttar Pradesh region.

Competitive Moat

The moat is derived from integrated operations (9,500 TCD sugar + 50 KLPD distillery + 25 MW power) and experienced management, providing a sustainable cost advantage over non-integrated mills.

Macro Economic Sensitivity

Highly sensitive to monsoon and climatic conditions, which influence the crushing period and sugar recovery levels.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by the Sugarcane (Control) Order, 1966, which regulates sugarcane sourcing areas and pricing. Sugar trade and by-product pricing are also subject to government acts.

Taxation Policy Impact

Current tax for FY25 was INR 13.54 Cr, up from INR 10.48 Cr in FY24. Deferred tax was a credit of INR 0.17 Cr.

⚠️ Risk Analysis

Key Uncertainties

High exposure to group entity Sonar Casting Limited (SCL) with corporate guarantees of INR 68.66 Cr and preference share investments of INR 49.60 Cr, which constrains financial flexibility.

Geographic Concentration Risk

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