💰 Financial Performance

Revenue Growth by Segment

Total revenue from operations decreased by 33.24% YoY to INR 257.76 Cr in H1 FY26. Segment-wise performance for H1 FY26: Sugar revenue fell 37.31% to INR 193.55 Cr; Cogeneration revenue declined 45.32% to INR 23.73 Cr; and Distillery revenue decreased 8.92% to INR 70.95 Cr.

Geographic Revenue Split

Not disclosed in available documents, though operations are concentrated in Tamil Nadu across three units: Theni, Villupuram, and Gingee.

Profitability Margins

Net Profit Margin declined from 2.77% in FY24 to 1.73% in FY25. Operating Profit Margin (EBITDA/Sales) decreased from 8.99% in FY24 to 7.87% in FY25 due to higher operational costs and lower volumes.

EBITDA Margin

EBITDA margin was 7.87% for FY25, a decrease of 112 basis points from 8.99% in FY24. The decline reflects margin pressure in the sugar segment which reported a loss before tax of INR 32.31 Cr in FY25.

Capital Expenditure

Cash outflow for investing activities, primarily for property, plant, and equipment, was INR 1.27 Cr in H1 FY26 compared to INR 2.17 Cr in H1 FY25.

Credit Rating & Borrowing

CRISIL Ratings maintains a 'Stable' outlook with a moderate financial risk profile. Interest coverage ratio improved slightly to 2.43x in FY25 from 2.35x in FY24. Total debt to OPBDITA stood at 7.72x in FY25.

⚙️ Operational Drivers

Raw Materials

Sugarcane is the primary raw material, with cost of materials consumed totaling INR 176.34 Cr in H1 FY26, representing 68.4% of total revenue.

Import Sources

Sourced locally from farmers in the catchment areas of the Theni, Villupuram, and Gingee units in Tamil Nadu.

Key Suppliers

Primarily individual sugarcane farmers and local agricultural cooperatives in Tamil Nadu.

Capacity Expansion

Current installed capacity includes a distillery capacity of 125 KLPD (45 KLPD at Theni and 80 KLPD at Gingee) and a total cogeneration capacity of 54.5 MW (12 MW at Theni, 22 MW at Villupuram, and 20.5 MW at Gingee). No specific expansion timeline is disclosed.

Raw Material Costs

Cost of materials consumed was INR 176.34 Cr in H1 FY26, a 18.2% decrease from INR 215.67 Cr in H1 FY25, though the cost as a percentage of revenue increased due to lower sales volumes.

Manufacturing Efficiency

Not disclosed in available documents, though turnover was noted as lower due to reduced sugarcane availability.

📈 Strategic Growth

Growth Strategy

The company is focusing on the sale of non-core assets by FY2026 to improve liquidity and support debt servicing. It also leverages its integrated model (Sugar-Cogen-Distillery) to maximize value from sugarcane by-products like molasses and bagasse.

Products & Services

Refined sugar, Ethanol/Distillery products (from molasses), and Power (from bagasse-based cogeneration).

Brand Portfolio

Rajshree Sugars.

Strategic Alliances

The company reported having no subsidiaries, associates, or joint ventures as of September 30, 2025.

🌍 External Factors

Industry Trends

The sugar industry is currently facing a period of lower sugarcane availability due to climate shifts. The industry is evolving toward ethanol blending (distillery) to reduce reliance on cyclical sugar prices, a trend RSCL is positioned for with its 125 KLPD capacity.

Competitive Landscape

Operates in a fragmented and highly regulated industry with competition from both large integrated mills and smaller regional players.

Competitive Moat

The company's moat lies in its fully integrated operations and the extensive industry experience of its promoters. This integration allows for better margin management through by-product utilization, though it remains vulnerable to regional crop failures.

Macro Economic Sensitivity

Highly sensitive to agricultural output and monsoon patterns which dictate sugarcane yield and recovery rates.

Consumer Behavior

Increasing demand for ethanol for fuel blending is shifting the focus from pure sugar production to distillery-heavy operations.

⚖️ Regulatory & Governance

Industry Regulations

Subject to government regulations on sugarcane pricing (Fair and Remunerative Price), sugar export quotas, and ethanol procurement prices set by Oil Marketing Companies.

Taxation Policy Impact

The company reported a Profit Before Tax of INR 11.08 Cr for FY25 with a Net Profit of INR 8.09 Cr, implying an effective tax rate of approximately 27%.

Legal Contingencies

The company received administrative approval for a One Time Settlement (OTS) of Sugar Development Fund (SDF) loans on September 26, 2024. Specific values for other pending court cases were not disclosed.

⚠️ Risk Analysis

Key Uncertainties

Climatic risks affecting sugarcane supply and regulatory shifts in ethanol blending prices or sugar export policies could impact revenue by over 20%.

Geographic Concentration Risk

100% of manufacturing operations are concentrated in Tamil Nadu, making the company highly vulnerable to state-specific weather patterns and agricultural policies.

Third Party Dependencies

High dependency on local sugarcane farmers for raw material supply; any shift in farmer preference to other crops would severely impact operations.

Technology Obsolescence Risk

Low risk in core sugar processing, but requires ongoing investment in distillery technology to meet ethanol blending standards.

Credit & Counterparty Risk

Trade receivables stood at INR 51.48 Cr as of September 30, 2025, representing approximately 20% of H1 revenue.