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Informist, Wednesday, Jul. 9, 2025

 

NEW DELHI – Major sugar companies are likely to report improved earnings for the first quarter of the financial year 2025-26 (Apr-Mar), aided by higher on-year sugar realisations and a sharp decline in closing inventories, Centrum Broking said in a report. However, sequential growth may moderate owing to the recent softening in sugar prices, the brokerage added.

 

After a sharp rebound in the March quarter, sugar prices cooled off through June amid subdued demand. Refined sugar prices in Uttar Pradesh, which had peaked at INR 42,000 per tonne earlier this year, hovered around INR 40,000 per tonne throughout June, Centrum said.

 

Despite the recent dip in sugar prices, the lower closing stock for the sugar season 2024-25 (Oct-Sept) is likely to support the sector. The 2024-25 sugar season is likely to have an optimal closing inventory of 5 million tonnes, lower than 8 million tonnes last year, the broking firm said. "This is likely to result in firm and profitable sugar realisations in the current season," it added. 

 

Balrampur Chini Mills Ltd. is projected to post a 20.7% on-year rise in consolidated net profit to INR 846.00 million in Apr-Jun. The company's revenue is expected to grow 6.3% on year to INR 15.10 billion while its earnings before interest and tax is seen rising 9.1% to INR 1.81 billion, the brokerage said. Centrum has maintained its "buy" rating on the stock, citing strong performance across sugar and ethanol segments and continued business diversification.

 

Triveni Engineering and Industries Ltd. is also expected to post a solid quarter, with consolidated net profit likely to rise 69.8% on year to INR 526.00 million and revenue expected to rise 9.3% to INR 14.20 billion. The company's earnings before interest, taxation, depreciation, and amortisation is projected to rise 35.2% to INR 1.16 billion.

 

However, Centrum remains cautious and has only revised its rating on Triveni Engineering to "reduce" from "sell" owing to continuing concerns about weak sugarcane yields in western Uttar Pradesh and a lack of near-term triggers. "Triveni Engineering has witnessed a correction of over 15% since our previous Sell recommendation and is now trading at more reasonable valuation levels," the brokerage said.

 

Meanwhile, India's ethanol blending programme continues to gain momentum. During Nov–May, the country achieved an average blending rate of 18.8%, nearing its target of 20% by the ethanol year 2025-26 (Nov-Oct). In May alone, the blending rate touched 19.8%.

 

Government commentaries on reviewing the minimum sale price of sugar, revising ethanol pricing, and extending the blending mandate beyond 20% are viewed as longer-term positives for the sector. Centrum, however, expects the benefits to accrue only in the sugar season 2025-26 and beyond.  End

 

Reported by Afra Abubacker

Edited by Rajeev Pai

 

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