💰 Financial Performance

Revenue Growth by Segment

Total revenue for H1 FY26 reached INR 1,164.53 Cr, a 38.7% increase from INR 839.55 Cr YoY. The Sugar segment grew 37.4% to INR 1,032.99 Cr. The Distillery segment saw significant growth of 71.8%, reaching INR 251.07 Cr, while Cogeneration revenue surged 420% to INR 16.70 Cr from a low base of INR 3.21 Cr.

Geographic Revenue Split

Revenue is generated from manufacturing units geographically distributed across Uttar Pradesh (Barkatpur, Khaikheri, Shermau) and Uttarakhand (Libberheri). Specific percentage splits per state are not disclosed, but operations span four major plants in these two regions.

Profitability Margins

Consolidated Net Profit before tax for H1 FY26 stood at INR 21.05 Cr, a sharp decline compared to the full-year FY25 profit of INR 118.00 Cr. Profitability was impacted by a drop in sugar recovery rates from 10.53% to 8.94% in the 2024-25 season due to adverse weather conditions.

EBITDA Margin

Operating Profit before Working Capital Changes for H1 FY26 was INR 75.11 Cr, representing an EBITDA margin of approximately 6.45% on total income of INR 1,164.53 Cr. This reflects a moderation from previous periods due to lower cane availability and recovery issues.

Capital Expenditure

The company maintains a property, plant, and equipment base of INR 773.35 Cr as of March 2025. Recent strategic investments include the acquisition of Uttam Distilleries Limited in July 2024 to expand grain-based distillery capacity by 40 KLPD.

Credit Rating & Borrowing

Credit ratings were upgraded in December 2024 to CARE A-; Positive for long-term facilities (INR 895.47 Cr) and CARE A2+ for short-term facilities (INR 27.00 Cr). Finance costs for H1 FY26 were INR 30.14 Cr, reflecting the cost of servicing its integrated operations.

⚙️ Operational Drivers

Raw Materials

Sugarcane is the primary raw material, accounting for the vast majority of input costs. Other inputs include grain for the multi-feed distillery and molasses for ethanol production.

Import Sources

Raw materials are sourced locally from the command areas surrounding the mills in Uttar Pradesh and Uttarakhand to ensure freshness and minimize logistics costs.

Key Suppliers

The company procures sugarcane from thousands of individual farmers and local cooperatives within its designated mill command areas.

Capacity Expansion

Current sugar crushing capacity is 27,000 TCD (up from 26,200 TCD). Distillery capacity stands at 340 KLPD, including a 40 KLPD grain-based addition from the UDL acquisition. Cogeneration capacity is 122 MW.

Raw Material Costs

Sugarcane costs are determined by government-mandated State Advised Prices (SAP) and Fair and Remunerative Prices (FRP). A recovery rate drop to 8.94% effectively increased the per-unit cost of sugar production in the latest season.

Manufacturing Efficiency

Sugar recovery rate is the primary efficiency metric, which stood at 8.94% for the 2024-25 season. Capacity utilization is seasonal, peaking during the crushing months from November to April.

Logistics & Distribution

Distribution involves transporting finished sugar to domestic markets and ethanol to Oil Marketing Companies (OMCs). Costs are managed through the strategic location of mills near major consumption centers.

📈 Strategic Growth

Expected Growth Rate

15%

Growth Strategy

Growth is driven by the ramp-up of the grain-based distillery (UDL) which will have its first full year of operations in FY25. The company is focusing on increasing the share of higher-margin ethanol and distillery products to 25-30% of revenue to offset sugar cyclicality.

Products & Services

Final products include various grades of commercial sugar, ethanol, cogenerated power, molasses, and Potash Derived from Molasses (PDM).

Brand Portfolio

Uttam Sugar

New Products/Services

Expansion into grain-based ethanol through the UDL acquisition allows for year-round distillery operations, expected to contribute significantly to H2 FY25 earnings.

Market Expansion

The company is expanding its footprint in the distillery market to capitalize on the government's E20 ethanol blending target.

Market Share & Ranking

The company is a significant integrated player in the North Indian sugar industry with a 27,000 TCD crushing capacity.

Strategic Alliances

Acquired Uttam Distilleries Limited (UDL) in July 2024 to diversify feedstock capabilities.

🌍 External Factors

Industry Trends

The industry is shifting from pure sugar production to an 'Energy and Alcohol' model. The government's push for 20% ethanol blending by 2025-26 is the primary driver for the company's distillery expansion.

Competitive Landscape

Competes with other large integrated sugar mills in Uttar Pradesh and Uttarakhand, as well as unorganized local crushers (khandsari units).

Competitive Moat

The moat is built on forward integration (Sugar-Power-Ethanol) and geographically distributed units. This allows the company to wither industry cyclicality better than standalone mills, though it remains vulnerable to regulatory shifts.

Macro Economic Sensitivity

Highly sensitive to agricultural inflation and rural income levels, which dictate both labor costs and local demand for sugar.

Consumer Behavior

Increasing consumer awareness regarding sugar consumption is a long-term risk, partially offset by rising industrial demand for ethanol.

Geopolitical Risks

Impacted by global sugar surplus/deficit cycles which influence domestic export quotas and international pricing.

⚖️ Regulatory & Governance

Industry Regulations

Operations are highly regulated under the Essential Commodities Act. The government controls sugar release quotas, export permissions, and fixes the prices for both raw materials (Cane SAP/FRP) and key outputs (Ethanol).

Environmental Compliance

The company must adhere to strict zero-liquid discharge norms for its distilleries and pollution control standards for its cogeneration plants.

Taxation Policy Impact

Subject to standard corporate tax rates in India; specific fiscal incentives for ethanol production may apply.

Legal Contingencies

The company maintains adequate records for safeguarding assets and detecting frauds as per the Companies Act 2013. Specific values for pending litigation are not detailed in the provided financial summaries.

⚠️ Risk Analysis

Key Uncertainties

Regulatory risk regarding ethanol feedstock and pricing is the highest uncertainty, with potential impact on 20-25% of projected cash flows. Weather-related recovery fluctuations remain a constant risk.

Geographic Concentration Risk

100% of manufacturing operations are concentrated in the Uttar Pradesh and Uttarakhand sugar belts, making the company vulnerable to regional climate events or state-specific policy changes.

Third Party Dependencies

High dependency on the farming community for sugarcane supply and government OMCs for ethanol off-take.

Technology Obsolescence Risk

Low risk in core sugar processing, but the company must invest in modern distillery technology to maintain multi-feed flexibility (grain and molasses).

Credit & Counterparty Risk

Receivables are generally high quality, particularly from OMCs, though state electricity boards (for power export) can sometimes have delayed payment cycles.