SIMBHALS - Simbhaoli Sugar

📊 NSE: SIMBHALS 🏢 Sugar 📅 Last Updated: 12/14/2025 13:25

💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue decreased 4.69% YoY to INR 1,350.98 Cr in FY24 from INR 1,417.43 Cr. In FY25, revenue further declined 14.65% to INR 1,002 Cr from INR 1,174 Cr in FY24. The sugar segment remains the primary driver, though standalone turnover fell 3.82% to INR 1,342.63 Cr in FY24.

Geographic Revenue Split

100% of revenue is generated in India, specifically from three integrated sugar complexes in Uttar Pradesh: Simbhaoli, Brijnathpur (Western UP), and Chilwaria (Eastern UP).

Profitability Margins

Net Profit Ratio improved from -2.25% in FY24 to a PAT margin of 2.4% in FY25. The company reported a PAT of INR 24 Cr in FY25 compared to a loss of INR 12 Cr in FY24. Operating Profit Margin was -2.25% in FY24 but improved to 5.84% in FY25.

EBITDA Margin

EBITDA margins have been volatile; the company needs to sustain a 3-4% EBITDA margin for a credit rating upgrade. Operating Profit Margin stood at 5.84% in FY25, a significant recovery from -2.25% in FY24.

Capital Expenditure

Not disclosed in available documents, though the company emphasizes technological upgrades for by-product utilization and enhancing branded product capacity.

Credit Rating & Borrowing

The company carries a 'CRISIL D' rating, reflecting a default status on its long-term bank facilities totaling INR 1,041 Cr. Stretched liquidity has led to delays in servicing term loan installments.

⚙️ Operational Drivers

Raw Materials

Sugarcane is the primary raw material, accounting for the majority of input costs. Other inputs include chemicals for refining and packaging materials for branded products.

Import Sources

Sourced locally from farmers in the catchment areas of its three plants in Uttar Pradesh, India.

Key Suppliers

Primary suppliers are local sugarcane farmers and cooperative societies in the Simbhaoli, Brijnathpur, and Chilwaria regions.

Capacity Expansion

Current installed crushing capacity is 19,500 tonnes of sugarcane per day (TPD). Cogeneration capacity is 108 MW (via a 51:40 JV), and distillery capacity is 180 kilolitres per day (KLPD). No specific expansion timeline is provided.

Raw Material Costs

Raw material costs are heavily influenced by the State Advised Price (SAP) and Fair and Remunerative Price (FRP) set by the government. High input prices driven by regulation often conflict with volatile open-market sugar prices.

Manufacturing Efficiency

Return on Capital Employed (ROCE) improved to 1.87% in FY24 from -0.64% in FY23, indicating a gradual recovery in resource utilization despite negative net worth.

Logistics & Distribution

The company is expanding its distribution through e-commerce channels and modern trade for its 'Trust' brand products to reach retail consumers directly.

📈 Strategic Growth

Expected Growth Rate

Not disclosed in available documents

Growth Strategy

Growth is targeted through the 'Trust' brand expansion, focusing on specialty sugars (pharma-grade, cubes, sachets) and e-commerce. The company is also leveraging the government's mandatory ethanol blending program to increase distillery segment contributions.

Products & Services

White crystal refined sugar, pharmaceutical-grade sugar, sugar cubes, icing sugar, candy sugar, sugar sachets, ethanol, potable alcohol, and surplus power.

Brand Portfolio

Trust

New Products/Services

Focus on specialty and branded sugar products like pharmaceutical-grade sugar and consumer-facing retail packs to improve margins over bulk sugar.

Market Expansion

Expansion into modern trade and e-commerce platforms to increase the retail footprint of the 'Trust' brand.

Strategic Alliances

Maintains a 51:40 Joint Venture with Sindicatum Captive Energy Singapore for its 108 MW cogeneration power operations.

🌍 External Factors

Industry Trends

The industry is shifting toward ethanol production due to the government's blending mandates. Per capita sugar consumption in India (20kg) is below the global average (23kg), suggesting long-term growth potential.

Competitive Landscape

The sugar industry is highly fragmented and cyclical, characterized by high regulatory intervention and competition from both large integrated players and unorganized mills.

Competitive Moat

Moat is derived from integrated operations (sugar + power + distillery) which allows for 100% utilization of sugarcane by-products (molasses and bagasse), providing a cost advantage over standalone mills.

Macro Economic Sensitivity

Highly sensitive to agricultural output (GDP) and inflation, particularly in rural labor and transport costs.

Consumer Behavior

Increasing consumer preference for branded, packaged, and specialty sugar products over loose bulk sugar.

Geopolitical Risks

Trade barriers and export restrictions imposed by the Indian government to control domestic sugar inflation impact the company's ability to tap global markets.

⚖️ Regulatory & Governance

Industry Regulations

Operations are heavily regulated by the Essential Commodities Act, including sugar MSP, sugarcane SAP/FRP, and ethanol procurement prices set by Oil Marketing Companies (OMCs).

Legal Contingencies

The company is currently under the Corporate Insolvency Resolution Process (CIRP) initiated by the NCLT on July 11, 2024. Powers of the Board are suspended and vested with the Interim Resolution Professional (IRP), Anurag Goel.

⚠️ Risk Analysis

Key Uncertainties

The outcome of the CIRP process and the ability to reach a resolution with lenders for the INR 1,041 Cr debt are the primary business uncertainties.

Geographic Concentration Risk

100% of manufacturing assets are located in Uttar Pradesh, making the company highly vulnerable to state-specific policy changes and regional weather patterns.

Third Party Dependencies

High dependency on the timely supply of sugarcane from local farmers; any disruption in farmer relations or payments (cane arrears) impacts operations.