SUKHJITS - Sukhjit Starch

📊 NSE: SUKHJITS 🏢 Miscellaneous 📅 Last Updated: 12/14/2025 13:47

💰 Financial Performance

Revenue Growth by Segment

Revenue from operations for H1 FY26 stood at INR 679.88 Cr, a decrease of 9.79% compared to INR 753.7 Cr in the previous period. Standalone revenue for Q2 FY26 was INR 312.68 Cr, down 14.85% from INR 367.20 Cr in Q1 FY26. Segment-specific percentage growth is not disclosed.

Profitability Margins

Operating profit margin ratio moderated to 5.48% in FY25 from 7.85% in FY24, a 30.19% decline. Net profit margin ratio fell to 2.66% in FY25 from 4.06% in FY24, a 34.48% decrease. The moderation was primarily due to fluctuations in maize prices and elevated raw material costs.

EBITDA Margin

EBITDA margin moderated to 6.93% in FY25 compared to 9.20% in FY24. For Q2 FY26, EBITDA stood at INR 20.05 Cr, a marginal increase of 0.8% from INR 19.89 Cr in Q1 FY26. CRISIL expects margins to recover to 8-8.5% during fiscal 2026.

Capital Expenditure

The company is undertaking capacity expansion in existing locations to optimize operations. While specific INR Cr figures for planned capex are not disclosed, CRISIL notes that sizeable debt-funded capex could adversely affect the financial risk profile.

Credit Rating & Borrowing

Long-term rating reaffirmed at 'CRISIL A+' but outlook revised to 'Negative' from 'Stable' due to expected moderation in operating efficiency. Short-term rating reaffirmed at 'CRISIL A1'. Debt to equity ratio is comfortable at 0.19 with almost nil long-term bank borrowings.

⚙️ Operational Drivers

Raw Materials

Maize is the primary raw material, representing approximately 79.3% of total revenue in Q2 FY26 (INR 248.02 Cr cost on INR 312.68 Cr revenue).

Import Sources

Sourced domestically from strategic locations benefiting from three harvest seasons: Spring, Kharif, and Rabi, which minimizes long-term storage needs.

Capacity Expansion

The company aims for sustained volume growth of over 30-40% through the timely commencement of new capacities in the maize processing industry.

Raw Material Costs

Raw material costs (maize) fluctuated significantly, leading to a margin drop from 9.20% in FY24 to 6.93% in FY25. Procurement strategies focus on conserving adequate supply at optimum costs to hedge against natural vagaries and increased demand from ethanol manufacturing.

Manufacturing Efficiency

Maintained healthy capacity utilization across all plants. Debottlenecking efforts are underway to enhance production capability and operational flexibility.

Logistics & Distribution

Strategic location of units reduces the need for long-term storage and optimizes distribution to FMCG, pharma, paper, and textile clients.

📈 Strategic Growth

Expected Growth Rate

30-40%

Growth Strategy

Growth will be achieved through capacity expansion at existing locations, debottlenecking to enhance production capability, and leveraging long-term partnerships with leading FMCG brands to align expansions with future supply requirements. The company is also targeting resurgence in demand from the paper and textile segments.

Products & Services

Starch and its derivatives, liquid glucose, dextrose, sorbitol, maize oil, poultry feed, and cattle feed.

Brand Portfolio

Sukhjit.

Market Expansion

Focusing on capacity expansion in existing locations and increasing market share in the domestic maize processing industry.

Market Share & Ranking

Leading manufacturer of starch and its derivatives in the domestic maize processing industry.

Strategic Alliances

Maintains long-term collaborative relationships with reputed FMCG brands like Dabur India Ltd, Heinz India Pvt Ltd, Nestle India Ltd, and Marico Ltd.

🌍 External Factors

Industry Trends

The maize processing industry is seeing increased demand from FMCG and pharma, alongside a resurgence in the paper and textile sectors. Future direction is growth-oriented, driven by volumetric expansion.

Competitive Landscape

Leading domestic player competing in a fragmented market where scale and raw material procurement efficiency are key differentiators.

Competitive Moat

Durable advantages include an 80-year operational track record (est. 1943), extensive promoter experience, and deep-rooted relationships with global FMCG giants, which are sustainable due to high switching costs and quality standards.

Macro Economic Sensitivity

Highly sensitive to agricultural output and maize pricing, which is influenced by ethanol blending policies and climatic conditions.

Consumer Behavior

Shift towards starch-based derivatives in food processing and industrial applications is driving steady demand.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to agricultural produce regulations and manufacturing standards (ISO 9001:200 and FSSC:22000 certified).

Taxation Policy Impact

Effective tax rate is approximately 30% based on H1 FY26 standalone PBT of INR 12.63 Cr and PAT of INR 8.82 Cr.

⚠️ Risk Analysis

Key Uncertainties

Volatility in maize prices (raw material) is the primary uncertainty, with a potential impact of 2-3% on operating margins if not managed efficiently.