Interest and depreciation leave Avadh Sugar with Rs 0.37 cr PBT
Standalone operating margin was 4.68%, while other income of Rs 1.8 cr exceeded PBT; management cited higher cane prices as a margin pressure.
Filed 03 Aug 2026, 13:47 IST · AVADHSUGAR (AVADHSUGAR)
Key takeaways
- Standalone operating margin was 4.68%, but interest of Rs 22.3 cr and depreciation of Rs 15.58 cr reduced profit before tax to Rs 0.37 cr.
- Other income of Rs 1.8 cr exceeded profit before tax, underscoring that reported profit was not generated by operations alone.
- Management said sugar sales volume rose 10% and average realisation improved 2% in Q1FY27, while higher cane prices remained a margin pressure.
Operating profit was largely absorbed below the line
Avadh Sugar reported standalone operating profit of Rs 36.45 cr, but interest of Rs 22.3 cr and depreciation of Rs 15.58 cr left only Rs 0.37 cr of profit before tax. Net profit was Rs 0.23 cr, with EPS at Rs 0.12. The 4.68% operating margin therefore did not translate into meaningful earnings after financing and non-cash charges.
Other income outweighed reported pre-tax profit
Other income of Rs 1.8 cr was higher than the Rs 0.37 cr profit before tax, making earnings quality a key concern in this quarter. Tax was Rs 0.13 cr at a 36.04% tax rate, further reducing the small pre-tax profit. Management identified higher cane prices as a margin pressure and lower cane yield as a risk to crushing volumes.
Sugar volumes improved while policy remains important
Management said sugar sales volume increased 10% and average sugar realisation improved 2% during the quarter. The company said higher ethanol blending could activate idle distillery capacity without fresh capex and improve working-capital efficiency. Management also said any decision on Sugar Season 2026-27 exports would depend on production estimates after the monsoon assessment, expected after September 2026. It said encouraging crop conditions may support modestly higher cane yields and crushing in the ensuing season.
Q1FY27 at a glance
Standalone figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q1FY27 |
|---|---|
| Revenue | ₹779 cr |
| Other income | ₹2 cr |
| Expenses | ₹743 cr |
| Operating profit | ₹36 cr |
| Operating margin (%) | 4.68% |
| Interest | ₹22 cr |
| Depreciation | ₹16 cr |
| Profit before tax | ₹0 cr |
| Tax | ₹0 cr |
| Net profit | ₹0 cr |
| EPS (₹) | ₹0.12 |
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Sugar sales volume increased 10% and average sugar realisation improved 2% in the quarter.
Guidance & outlook
- Higher ethanol blending from the government could activate idle distillery capacity without fresh capex and improve working capital efficiency.
- The government will decide on sugar exports for Sugar Season 2026-27 after September 2026, based on production estimates after the monsoon assessment.
- Uttar Pradesh is expected to contribute around one-third of India's sugar production and retain its sector leadership.
- Encouraging crop conditions may lead to modestly higher cane yields and crushing during the ensuing season.
- NITI Aayog is working on a roadmap for ethanol blending targets beyond E20.
New initiatives
- The company is adopting high-yield, disease-resistant sugarcane varieties across its command areas.
Problems & risks
- Higher cane prices are identified as a margin pressure.
- Lower cane yield is identified as a risk to crushing volumes.
- Delayed export permissions and dependence on government approvals are identified as risks.
- Competition from jaggery and khandsari may intensify and affect cane availability for sugar mills.
What to watch
- Whether standalone operating margin holds above 4.68% as cane prices affect costs.
- Whether sugar sales volume growth of 10% and the 2% improvement in realisation continue.
- The timing and basis of any Sugar Season 2026-27 export decision after September 2026.