Management Participants

  • Mr. Muthiah Murugappan – Whole-Time Director and Chief Executive Officer
  • Mr. Venkateshwarlu Y – Chief Financial Officer
  • Mr. Abdul Hakeem Ashiq J – Chief Operating Officer, Sugar and Biofuel
  • Mr. Biswa Mohan Rath – Sr. VP – Legal and Company Secretary

Global and Indian Sugar Market Context

Global Scenario: The global sugar market is transitioning from surplus to a more balanced outlook. The International Sugar Organization (ISO) expects a surplus of 2.24 million metric tons (MMT) in 2025-26, driven by better global production of 182 MMT. Weather concerns are supporting prices, with London white sugar recovering from $404/ton in early 2026 to about $471/ton by July 2026. Raw sugar remains subdued around 14-15 cents per pound. In Brazil, a stronger sugarcane harvest has increased ethanol production.

Indian Scenario (SY 2025-26):

  • Gross sugar production: 31 MMT
  • Diversion to ethanol: 3 MMT
  • Domestic consumption: 28 MMT
  • Exports: 0.8 MMT
  • Closing stocks: 4.2 MMT
  • Net sugar production: 28 MMT (up from 26 MMT previous year)

El Nino conditions, tight inventories, and steady demand have pushed domestic sugar prices above ₹45-46 per kg. The E20 ethanol blend program is expected to remain at 20% for the foreseeable future.

Q1 FY27 Operational Performance

Sugar Segment (Tamil Nadu Operations)

  • Crushing days: 54 days (vs. 37 days in Q1 FY26)
  • Cane crushed: 1.47 LMT (vs. 2.12 LMT in Q1 FY26)
  • Gross recovery: 7.95% (vs. 8.02% in Q1 FY26)
  • Sugar production: 0.12 LMT (vs. 0.17 LMT in Q1 FY26)
  • Cane landed cost: ₹4,031/MT (vs. ₹3,844/MT in Q1 FY26), increased due to higher FRP of ₹3,550
  • Sugar sales volume: 0.89 LMT (vs. 0.56 LMT in Q1 FY26)
  • Average sugar selling price: ₹40.02/kg (vs. ₹40.97/kg in Q1 FY26)
  • Closing stock: 1.16 LMT valued at ₹41.50/kg (vs. 1.2 LMT in Q1 FY26)
  • Revenue: ₹410 crores (vs. ₹347 crores in Q1 FY26), driven by higher sales volume
  • All FRPs were paid as per timeline

Co-generation Segment

  • Power generated: 180 lakh units (LU) (vs. 221 LU in Q1 FY26)
  • Power exported: 89 LU (vs. 122 LU in Q1 FY26)
  • Average power tariff: ₹4.89/unit (vs. ₹3.67/unit in Q1 FY26)
  • Segment revenue: ₹6.6 crores (vs. ₹7.53 crores in Q1 FY26)

Distillery Segment

  • Production: 351 lakh liters (LL) (vs. 412 LL in Q1 FY26)
  • Sales: 380 LL (vs. 413 LL in Q1 FY26)
  • ENA: 138 LL
  • Ethanol: 242 LL
  • Average price realization: ₹63.49/liter (vs. ₹67.59/liter in Q1 FY26)

Nutraceuticals Segment

  • Revenue: ₹6.22 crores (vs. ₹6 crores in Q1 FY26)
  • Consolidated turnover: ₹61 crores (vs. ₹27 crores in Q1 FY26)
  • Growth primarily driven by Valensa US business with new product launches

Consumer Products Group (CPG) Segment

  • Revenue: ₹94 crores (vs. ₹188 crores in Q1 FY26)
  • Intentional revenue decline due to business model recalibration focusing on margin-accretive products
  • Absolute margin pool has grown despite lower revenue

PSRIPL Refinery Closure Update

  • Operations ceased as of March 31, 2026
  • All bank liabilities fully settled with no bank dues
  • Received in-principle SEZ unit exit approval letter on April 20, 2026
  • Debonding process underway, expected completion by September 30, 2026
  • ₹610 crores infused into PSRIPL to settle all bank obligations (as approved by Board)
  • Additional ₹55 crores loan provided during Q1
  • Total infusion of ₹665 crores to settle liabilities
  • Balance ₹65 crores may be provided based on requirements
  • Plant and machinery liquidation in progress, subject to SEZ unit approval and denotification
  • Asset sale prospecting underway, expected to generate cash

Financial Position and Strategy

  • Standalone debt as of June 30, 2026: ₹980 crores short-term, ₹150 crores long-term
  • Focus on working capital efficiency and debt cost reduction
  • Plans to monetize non-performing assets and non-core land parcels in FY27 to strengthen balance sheet
  • Employee costs increased due to VSS (voluntary separation scheme) in legacy plants, with more planned
  • Targeting CPG business quarterly breakeven in 4-5 quarters through:
  • Value mix shift toward value-added products
  • Distribution expansion in Southern markets
  • New product launches (jaggery, brown sugar)
  • Brand equity strengthening

Operational Outlook and Challenges

  • Cane availability concern in Tamil Nadu and Andhra Pradesh due to crop shift
  • Expected flat or 5% drop in crushing in these geographies
  • Karnataka operations remain strong with potential to compensate
  • Rains in August-September critical for yield maintenance
  • New jaggery plant in Karnataka to be commissioned in 6 months, doubling current capacity
  • Expected jaggery turnover: ~₹100 crores from both plants with substantially better margins than white sugar
  • Ethanol production capacity: 582 KLPD (~18 crore liters), including 120 KLPD grain capacity
  • Must balance ethanol/sugar production considering OMC commitments and penalties

Category Performance Expectations

  • Nutraceuticals: Targeting steady-state EBITDA margins of 12-15% with scale improvement
  • Sugar: Evaluating early crushing opportunities in Tamil Nadu to leverage high prices, but recovery remains key parameter
  • CPG: Revenue expected to remain lower but with improved margins and path to breakeven

Corporate Structure

  • No current plans to rework corporate structure regarding Coromandel subsidiary holding

Q&A Highlights

  • addressed cane availability challenges in Tamil Nadu and Andhra Pradesh
  • discussed PSRIPL closure financial impact and asset sale prospects
  • elaborated on CPG restructuring strategy and path to profitability
  • explained sugar/ethanol production trade-offs considering pricing and OMC commitments
  • confirmed focus on working capital efficiency and balance sheet strengthening