Financial Performance Overview

Consolidated Results (Continuing Operations - Sugar, Alcohol, Water):

  • H1 FY27 Revenue: ₹3,311 crores (5% YoY increase from ₹3,145 crores in H1 FY26)
  • Q2 FY27 Revenue: ₹1,731 crores (8% YoY increase)
  • H1 FY27 Operating Margin: 6.9% (383 basis points improvement from 3.1% in H1 FY26)
  • H1 FY27 PBT: ₹131 crores (sharp improvement from loss of ₹25 crores in H1 FY26)
  • Finance Cost: 20% lower YoY in H1 FY27 due to lower working capital utilization and improved profitability
  • Cost of Funds: 6.8% for H1 FY27, 6.78% for Q2 FY27
  • Net Debt: Reduced significantly to ₹157 crores as of September 30, 2026 (from ₹702 crores a year ago)

Business Segment Performance

Sugar Business:

  • H1 FY27 Revenue: ₹2,497 crores (5% YoY increase)
  • Average Sugar Realization: ₹4,428 per metric tonne (9% improvement)
  • Dispatches: 5.33 lakh metric tonnes (broadly stable)
  • H1 FY27 Segment PBIT: ₹113 crores (substantial improvement from loss of ₹5 crores in H1 FY26)
  • Q2 FY27 Revenue: ₹1,262 crores (4% YoY increase)
  • Q2 Realizations: ₹4,728 per metric tonne (16% improvement)
  • Q2 Dispatches: Reduced by 8%
  • Closing Inventory (Sep 30, 2026): 1.03 lakh metric tonnes (valued at ₹38.6 per kilo), down from 1.69 lakh metric tonnes a year ago

Alcohol Business:

  • H1 FY27 Revenue: Increased by 3%
  • H1 FY27 PBIT: Increased by 44%
  • Q2 FY27 Revenue: Increased by 19%
  • Q2 Sales Volume: Increased by 16%
  • Q2 FY27 Segment PBIT: ₹43 crores (from ₹28 crores in previous corresponding quarter)
  • H1 FY27 Production: 1,085 lakh litres (13% lower YoY)
  • Production Mix: Grain-based ethanol remained largest component

Water Business:

  • H1 FY27 Revenue: Declined by 17%
  • Q2 FY27 Revenue: Declined by 13%
  • H1 FY27 PBIT: ₹3 crores (compared to ₹13 crores in previous year)
  • Q2 FY27 PBIT: Broadly breakeven
  • Order Book (Sep 30, 2026): ₹1,452 crores (₹404 crores normal EPC/equipment orders, ₹1,048 crores long-duration O&M contracts)

Industry Environment and Outlook

Sugar Industry:

  • Opening stocks estimated at 3.5 million metric tonnes (lowest in over a decade)
  • Annual consumption approximately 28.5 million metric tonnes
  • Production estimate: 27.5 million metric tonnes for 2026-27 with downside risk
  • Uttar Pradesh crop conditions constructive but recent unseasonal rainfall created concerns
  • Maharashtra and Karnataka suffered from irrigation issues and varied rainfall
  • Domestic sugar prices experienced exceptional volatility
  • Current prevailing prices: ₹5,800 per quintal (institutional), ₹5,400 (trade)
  • Haryana announced SAP increase: ₹15 to ₹430 per quintal for 2026-27, ₹20 to ₹450 for 2027-28

International Sugar Market:

  • Raw sugar moved from $0.1331/lb (April low) to $0.213/lb (high), currently ~$0.195/lb
  • White sugar moved from $376/tonne (February low) to $561/tonne (high), currently ~$520/tonne
  • Import parity: Raw sugar landed Delhi ~₹54.5/kg, White sugar (Dec contract) ~₹59.15/kg, (Mar contract) ~₹60.7/kg
  • Global outlook mixed with small deficit expected for current year

Ethanol Industry:

  • Ethanol blending reached 20% in ESY 2025-26
  • OMC allocation increased to 1,197 crore litres with supply of 987 crore litres until September 2026
  • ESY 2026-27 tender: 1,100 crore litres invited, excluding ethanol from sugarcane juice/syrup or B-heavy molasses
  • Tender allows maize, broken rice, surplus FCI rice (limited to 30% of tender), and C-heavy molasses
  • Maize prices at ₹26-27/kg, creating profitability challenges
  • Tender allocation estimate: ~150 crores from C-heavy, ~324 crores from FCI rice, ~626 crores split (max ~160 crores from DFG, balance ~466 crores from maize)

Operational Initiatives

Sugar Business:

  • Enhanced field surveillance and disease identification
  • Cane development focus on controlling irrigation and fertilizer usage
  • Maintained commercial discipline to minimize off-season costs
  • Factories ready for operation with crushing commencement dates:
  • Chandanpur: Started operations on November 3, 2026
  • Sabitgarh: Expected start November 4, 2026
  • Khatauli: Expected start November 6, 2026
  • Other plants: Start shortly after Deepawali

Alcohol Business:

  • Allocation and product mix optimization
  • Feedstock flexibility enhancement
  • Maximized byproduct realization (DDGS premiums)
  • Energy and process efficiency improvements

Management Priorities for H2 FY27

Sugar Business:

  • Calibrate operations unit by unit
  • Focus on cane quality, recovery, throughput
  • Maintain commercial discipline

Alcohol Business:

  • Prioritize feedstock economics in tender bids
  • Optimize operations across distilleries

Water Business:

  • Focus on solid execution expected in Q3 and Q4 FY27
  • Achieve budgeted levels

Overall:

  • Maintain discipline on working capital and capital expenditure
  • Preserve flexibility across businesses
  • Focus on sustainable growth and long-term value creation

Question and Answer Session Highlights

Crop Impact Assessment:

  • Recent rainfall impact uncertain, true assessment expected by mid-December to mid-January
  • Sampling data indicates approximately 50-70 basis point decline in recovery year-on-year
  • Western UP better positioned due to cane binding practices
  • Maharashtra and Karnataka face more significant challenges with potential multi-year impact

Price Sustainability:

  • Domestic prices largely driven by import parity pricing
  • Government allowed 1 million tonnes of raw sugar imports (300,000 tonnes imported to date)
  • Expectation of additional import allowances (possibly 2 million tonnes)
  • Prices expected to remain around current levels subject to government regulations

Ethanol Profitability Concerns:

  • Current maize prices would "totally erode profitability" from maize-based ethanol
  • Profitability dependent on DDGS sales, fuel costs, and conversion efficiency
  • Hope for maize price reduction with Bihar and UP crops expected in May 2027

Capital Allocation:

  • No meaningful CapEx planned for the year
  • Focus on debt repayment and balance sheet improvement
  • Board to evaluate options after observing cash generation for another quarter

UP Sugarcane Price:

  • Expectation of announcement within 3-4 weeks
  • No specific estimate provided, but Haryana's ₹15 increase noted as potential signal