0.23% operating margin leaves Magadh Sugar in a Rs 12.22 cr loss
Lower sugar and ethanol volumes cut revenue by 7%, while higher cane prices added pressure to margins.
Filed 04 Aug 2026, 13:33 IST · MAGADSUGAR (MAGADSUGAR)
Key takeaways
- Standalone operating margin was 0.23%, while interest of Rs 9.94 cr and depreciation of Rs 7.82 cr pushed profit before tax to a loss of Rs 16.30 cr.
- Management said lower sugar and ethanol sales volumes drove a 7% revenue decline, while higher cane prices were impacting margins.
- Ethanol blending reached 20% by June 30, 2026, while management said refinery conversion and boiler upgrades are expected to improve realisations and capacity utilisation.
Operating spread was insufficient to cover finance costs
Magadh Sugar reported standalone operating profit of Rs 0.72 cr on revenue of Rs 310.54 cr, leaving only a 0.23% operating margin. Interest of Rs 9.94 cr and depreciation of Rs 7.82 cr more than absorbed operating profit, resulting in a Rs 16.30 cr loss before tax. A negative tax charge of Rs 4.08 cr reduced the reported net loss to Rs 12.22 cr; other income of Rs 0.74 cr was not material enough to change the result.
Lower volumes and cane prices weighed on the quarter
Management said revenue fell 7% because sugar and ethanol sales volumes were lower. It also said higher cane prices were affecting margins and lower cane yields could reduce crushing volumes. The company told analysts that feedstock availability and pricing for maize and sugarcane continued to affect the economics of standalone ethanol production.
Refinery and boiler projects are the stated operating levers
Management said the refinery conversion is expected to enable higher-quality sugar production and improve realisations. It also said the incineration boiler is expected to enhance capacity utilisation and operational efficiency. The presentation said ethanol blending had reached 20% by June 30, 2026, while the government’s decision on sugar exports for Sugar Season 2026-27 was expected around September 2026 after the monsoon assessment.
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 | ₹311 cr |
| Other income | ₹1 cr |
| Expenses | ₹310 cr |
| Operating profit | ₹1 cr |
| Operating margin (%) | 0.23% |
| Interest | ₹10 cr |
| Depreciation | ₹8 cr |
| Profit before tax | ₹-16 cr |
| Tax | ₹-4 cr |
| Net profit | ₹-12 cr |
| EPS (₹) | ₹-8.67 |
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 and ethanol sales volumes were lower in the quarter, driving a 7% revenue decline.
Guidance & outlook
- The refinery conversion is expected to enable higher-quality sugar production and improve realisations.
- The incineration boiler is expected to enhance capacity utilisation and operational efficiency.
- The government’s decision on sugar exports for SS 2026-27 is expected around September 2026 after the monsoon assessment.
- Ethanol blending reached 20% by June 30, 2026 and is on course to achieve the 20% target.
- NITI Aayog is developing a roadmap for ethanol blending targets beyond E20.
Problems & risks
- Higher cane prices are impacting margins, while lower cane yields may reduce crushing volumes.
- Feedstock availability and pricing challenges for maize and sugarcane continue to affect standalone ethanol production economics.
What to watch
- Whether standalone operating margin recovers from 0.23%.
- Whether sugar and ethanol volumes improve after the reported 7% revenue decline.
- Whether interest remains near Rs 9.94 cr as operating profit rebuilds.