💰 Financial Performance

Revenue Growth by Segment

Total revenue from operations decreased by 13.16% YoY to INR 928.54 Cr in FY25 from INR 1,069.28 Cr in FY24. For the quarter ended September 30, 2025, segment revenues were: Sugar at INR 150.56 Cr, Industrial Alcohol at INR 49.15 Cr, and Power at INR 33.02 Cr.

Geographic Revenue Split

Not disclosed in available documents, though operations are primarily centered in Tamil Nadu (Erode and Coimbatore districts).

Profitability Margins

Net Profit Margin for FY25 was 8.61% (INR 79.97 Cr profit on INR 928.54 Cr revenue), a decline from 12.11% in FY24. Profit before exceptional items and tax was thin at INR 4.85 Cr in FY25.

EBITDA Margin

EBITDA margin for FY25 was approximately 20.38% (calculated as PBT of INR 46.94 Cr + Finance Costs of INR 105.24 Cr + Depreciation of INR 37.10 Cr = INR 189.28 Cr EBITDA). This represents a significant core operational profitability despite high interest burdens.

Capital Expenditure

Historical CAPEX for FY25 was INR 14.81 Cr, compared to INR 12.50 Cr in FY24, representing an 18.48% increase in asset investment.

Credit Rating & Borrowing

Total borrowings as of March 31, 2025, stood at INR 783.21 Cr (INR 671.63 Cr non-current and INR 111.59 Cr current). Finance costs were INR 105.24 Cr, implying an average borrowing cost of approximately 13.44%.

⚙️ Operational Drivers

Raw Materials

Sugarcane (primary for sugar and alcohol) and Soya beans (for soya products). Sugarcane costs are reflected in the 'Cost of material consumed' which was INR 513.29 Cr in FY25, representing 55.28% of total revenue.

Import Sources

Primarily sourced locally from farmers in Tamil Nadu and surrounding regions to ensure freshness for crushing.

Key Suppliers

Local farming communities and sugarcane growers; specific corporate supplier names are not disclosed.

Capacity Expansion

Not disclosed in available documents; however, the company operates integrated plants for Sugar, Industrial Alcohol, and Power.

Raw Material Costs

Raw material costs decreased by 27.98% YoY to INR 513.29 Cr in FY25, down from INR 712.67 Cr in FY24, primarily due to lower crushing volumes or procurement prices.

Manufacturing Efficiency

Not explicitly disclosed, but depreciation of INR 37.10 Cr suggests a stable, aging asset base requiring consistent maintenance.

Logistics & Distribution

Other expenses, which include distribution, were INR 229.91 Cr in FY25, representing 24.76% of revenue.

📈 Strategic Growth

Expected Growth Rate

Not disclosed

Growth Strategy

The company is focusing on the recovery of long-standing receivables (where recovery is 'reasonably assured' per management) and optimizing its integrated business model (Sugar-Distillery-Power). Strategic focus includes ethanol production for the fuel blending market and interest liability remissions through settlements.

Products & Services

White Crystal Sugar, Industrial Alcohol (Ethanol), Cogenerated Power, and Soya Products (Soya meal, Soya oil).

Brand Portfolio

Sakthi Sugars.

Strategic Alliances

The company has provided securities and guarantees for loans availed by related parties, indicating close financial ties within the Sakthi Group.

🌍 External Factors

Industry Trends

The industry is shifting toward 'Sugar-to-Ethanol' diversion to manage surplus sugar stock and improve cash flows through oil marketing company (OMC) contracts.

Competitive Landscape

Competes with other large integrated sugar players in South India like EID Parry and Bannari Amman Sugars.

Competitive Moat

The primary moat is the integrated nature of the Sakthinagar facility, which allows for zero-waste processing where molasses is used for alcohol and bagasse for power. This provides a cost advantage over standalone sugar mills.

Macro Economic Sensitivity

Highly sensitive to agricultural output (GDP) and government policies regarding sugar export quotas and ethanol blending targets.

Consumer Behavior

Increasing demand for ethanol and renewable power; stable demand for sugar as a staple commodity.

Geopolitical Risks

Low direct impact, but global sugar price fluctuations affect domestic export viability.

⚖️ Regulatory & Governance

Industry Regulations

Subject to the Essential Commodities Act, Sugar Control Order, and state-specific sugarcane pricing (SAP) and pollution control norms for distilleries.

Taxation Policy Impact

The company had a deferred tax credit of INR 32.78 Cr in FY25, significantly impacting the final net profit figure.

Legal Contingencies

The company faces pending litigations disclosed in Note 41A. A critical governance issue is the auditor's qualification regarding the inability to determine Expected Credit Loss (ECL) on certain receivables, which could materially impact accumulated losses if written off.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the recoverability of receivables and the discrepancy in working capital statements filed with banks (limits > INR 5 Cr), which could affect future credit availability.

Geographic Concentration Risk

High concentration in Tamil Nadu, making the company vulnerable to state-specific agricultural policies and local weather patterns.

Third Party Dependencies

High dependency on local sugarcane farmers; any shift in crop preference (e.g., to paddy or turmeric) would reduce crushing volumes.

Technology Obsolescence Risk

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

Credit & Counterparty Risk

Significant risk identified by auditors regarding receivables; management maintains that recovery is assured, but lack of ECL provision remains a qualified audit point.