E.I.D.- Parry (India) Ltd. Q4 FY26 Earnings Conference Call

Management Participants

  • MR. MUTHIAH MURUGAPPAN - Whole-time Director & Chief Executive Officer
  • MR. Y. VENKATESHWARLU - Chief Financial Officer
  • MR. SURESH KANNAN – Whole-time Director – Parry Sugars Refinery India Private Limited
  • MR. ABDUL HAKEEM ASHIQ – Chief Operating Officer (Sugar and Biofuel Division)
  • MR. BISWA MOHAN RATH – Sr. VP – Legal and Company Secretary
  • Moderator: MR. ABHISHEK MEHRA - DAM Capital Advisors Limited

Global and Indian Sugar Market Context

Global Scenario: Global sugar markets are softening with prices moving downward. White sugar corrected from USD $500/ton in 2025 to ~$420/ton in early 2026. Raw sugar declined from ~$0.80/pound to ~$0.14/pound. This reflects a shift to surplus conditions with global production of 196.7 MMT exceeding demand of 193.8 MMT in 2025-26.

India Scenario (SY 2025-26): Gross production estimated at 31 MMT, with 3 MMT diverted to ethanol, domestic consumption at 28 MMT, exports of 0.7 MMT, and closing stock of 4.25 MMT. Exports have been banned until September 30, 2026. Production recovery was led by Maharashtra and Karnataka (20%+ growth), while Uttar Pradesh remained flat.

Q4 FY26 Operational Performance

Sugar Operations:

  • Crushing days: 77 days (vs. 76 days in Q4 FY25)
  • Cane crushed: 17.75 Lakh Metric Tons (LMT) (vs. 17.62 LMT in Q4 FY25)
  • Recovery: 11.19% (vs. 10.89% in Q4 FY25)
  • Sugar production: 1.74 LMT (vs. 1.55 LMT in Q4 FY25)
  • Cane cost: ₹4,087/MT (vs. ₹3,768/MT in Q4 FY25), increased due to higher FRP (₹150/MT hike)
  • Sugar sales: 97,000 MT (includes 6,000 MT exports) (vs. 73,000 MT in Q4 FY25)
  • Sugar realization: ₹39.28/kg (vs. ₹39.22/kg in Q4 FY25)
  • Closing stock: 1.92 LMT valued at ₹39/kg (vs. 1.83 LMT in Q4 FY25)
  • Sugar revenue: ₹466 crores (vs. ₹408 crores in Q4 FY25), a 14% increase driven by exports and higher release quota.

Co-generation Operations:

  • Power generated: 1,499 Lakh Units (LU) (vs. 1,450 LU in Q4 FY25)
  • Power exported: 845 LU (vs. 732 LU in Q4 FY25)
  • Power tariff: ₹4.57/unit (vs. ₹4.38/unit in Q4 FY25)
  • Power revenue: ₹66 crores (vs. ₹58 crores in Q4 FY25)

Distillery Operations:

  • Production: 452 Lakh Liters (LL) (vs. 438 LL in Q4 FY25)
  • Sales: 404 LL (vs. 389 LL in Q4 FY25)
  • Composition: 150 LL ENA + 64 LL Ethanol
  • Realization: ₹64.25/liter (vs. ₹66.98/liter in Q4 FY25)
  • Revenue: ₹275 crores (vs. ₹268 crores in Q4 FY25)

Nutra Operations:

  • Turnover: ₹13 crores (vs. ₹9 crores in Q4 FY25)
  • Increase attributed to higher exports to the US following tariff settlement at 10%.
  • Consolidated Nutra turnover: ₹50 crores (vs. ₹60 crores in Q4 FY25)

Consumer Products Group (CPG):

  • Turnover: ₹115 crores (vs. ₹195 crores in Q4 FY25), a 48% decline.
  • Decrease due to a deliberate operating model recalibration towards better channel optimization and margin profile improvement.

Parry Sugars Refinery India Private Limited (PSRIPL) Closure Update

Refinery Operations (Q4 FY26):

  • Production: 1.69 LMT (vs. 1.17 LMT in Q4 FY25)
  • Sales: 2.3 LMT (vs. 2.05 LMT in Q4 FY25)
  • Revenue: ₹1,006 crores (vs. ₹1,019 crores in Q4 FY25)
  • Loss: ₹293 crores (vs. loss of ₹99 crores in Q4 FY25)
  • External borrowing: ₹593 crores; Inter-corporate deposits: nil.

Closure Process:

  • Operations officially closed as of March 31, 2026; statutory authorities informed in early April.
  • Labor settlement completed: Management staff on April 1, 2026; contractors by April 15, 2026.
  • SEZ Exit: In-principle exit letter obtained from SEZ authorities on April 20, 2026. Exit formalities expected completion by September 30, 2026.

Bank Loan Repayment:

  • Payment 1 (April 24, 2026): $49 million (₹460 crores) funded by EID Parry equity infusion (₹338 crores) and PSRIPL cash.
  • Payment 2 (May 15, 2026): $29 million (₹272 crores) funded entirely by EID Parry investment.
  • Total EID Parry infusion by May 15: ₹600 crores.
  • Final payment: $1.4 million scheduled for June 2026, to be funded from PSRIPL internal receivables.
  • All loan obligations to be completed by June 30, 2026.

Asset Liquidation: Discussions initiated with vendors; exploring tenders for plant and machinery.

Strategic Business Updates

Consumer Products Group (CPG) Strategy:

  • Recalibrated strategy focuses on higher-margin products (30%+ gross margin) within sweeteners: jaggery, brown sugar variants, premium whites.
  • New product launches in sweet products planned for later in the year.
  • Defocused on low-margin products like rice and pulses.
  • Exploring new segments: ethnic snacking and culinary convenience.
  • Target: Break-even in 6-8 quarters; exit the decade with single-digit EBITDA percentage.
  • Investments focused on brand building, distribution expansion, and marketing mix (A&SP program).
  • CAPEX: ~₹45 crores for new Jaggery facility.

Nutra Division Strategy:

  • Nutra India continues with algae processing and exports; no new product launches planned.
  • Valensa USA: Two product launches planned (prostate health and derma health).
  • Strategy reoriented with organizational restructuring; stronger operating team in place.

Ethanol Blending Outlook:

  • Government intent shared for E30 blending (BIS aspect).
  • Expected positive action during new ethanol year allocations.
  • Higher blending percentages anticipated to strengthen fuel security.
  • No significant action expected on pricing revisions.
  • Potential benefit: Higher capacity utilization (current 16 crore liters, could move to 17 crore liters).

Sugar Operations Outlook (Tamil Nadu):

  • Planting expected to increase by 10-15%.
  • Recovery improved by ~0.5% due to good weather.
  • Growth constrained by attractiveness of other crops (e.g., government focus on paddy).

Capital Allocation

Post-refinery restructuring, focus remains on existing segments (sugar/biofuel, CPG, Nutra). Capital allocation:

  • Primary focus on CPG segment for brand building and distribution.
  • Minimal CAPEX: Only ~₹45 crores for Jaggery facility.
  • Emphasis on cost efficiency and working capital management in core operations, particularly Karnataka (positive EBITDA generator).

Other Key Points

  • Appellate Tribunal Tariff Order (Sept 2025): Not substantially applicable to EID Parry as most power exports are through IEX. Benefit, if any, is not material and not accrued in Q4.
  • MSP for Sugar: Unlikely given inflationary pressures.
  • Dividend: No timeline provided for resumption; endeavor is to strengthen business operations.