Margin recovered, but Magadh Sugar still trails FMCG peers
Lower costs and interest moved the company back into profit, though other income made up 53.10% of pre-tax profit.
Filed 06 Nov 2026, 13:47 IST · Magadh Sugar & Energy Ltd (MAGADSUGAR)
Key takeaways
- Operating margin widened 4.77 percentage points QoQ to 5.00% as expenses fell 11.18% while revenue declined 6.72%.
- Net profit swung from a Rs 12.22 cr loss in Q1FY27 to Rs 0.70 cr, but other income supplied 53.10% of pre-tax profit.
- The 5.00% operating margin was 5.69 percentage points below the 10.69% median for 64 reported FMCG peers.
Price around the results
Operating profit drove the return to black
Magadh Sugar & Energy reported standalone net profit of Rs 0.70 cr in Q2FY27, against a Rs 12.22 cr loss in Q1FY27. Revenue fell 6.72% QoQ to Rs 289.67 cr, but expenses declined faster at 11.18%, lifting operating profit to Rs 14.48 cr from Rs 0.72 cr. Lower interest, down 27.87% to Rs 7.17 cr, also supported the swing in pre-tax profit from a Rs 16.30 cr loss to Rs 1.13 cr.
Margin improved, but profit quality remains mixed
The 4.77-percentage-point QoQ improvement in operating margin came from expenses falling faster than revenue, rather than from revenue growth. Depreciation also declined 13.17% to Rs 6.79 cr. Other income accounted for 53.10% of pre-tax profit, while the tax rate rose 12.52 percentage points to 37.57%, limiting the conversion of pre-tax profit into net profit.
Margin recovered from Q1 but remains below peers
Operating margin rose from 0.23% in Q1FY27 to 5.00% in Q2FY27, reversing the preceding quarter's weak profitability. It was still 5.69 percentage points below the 10.69% median among 64 FMCG companies that had reported the same quarter. The company ranked 15th from the bottom on this measure.
Narkatiaganj projects sit alongside sugar-market pressures
Management said the Narkatiaganj refinery conversion is targeted for completion before sugar season 2026-27, with commercial operations planned for the upcoming season. It also said the incineration boiler is targeted for completion by November 2026 and is expected to raise annual operating days from 270 to approximately 340. The presentation flags that Bihar's 2026-27 SAP has not been announced, sugar exports are restricted, and juice and B-heavy molasses cannot be used as ethanol feedstocks for ESY 2026-27.
Q2FY27 at a glance
Standalone figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ |
|---|---|---|---|
| Revenue | ₹290 cr | ₹311 cr | -6.72% |
| Other income | ₹1 cr | ₹1 cr | -18.92% |
| Expenses | ₹275 cr | ₹310 cr | -11.18% |
| Operating profit | ₹14 cr | ₹1 cr | +1911.11% |
| Operating margin (%) | 5.00% | 0.23% | — |
| Interest | ₹7 cr | ₹10 cr | -27.87% |
| Depreciation | ₹7 cr | ₹8 cr | -13.17% |
| Profit before tax | ₹1 cr | ₹-16 cr | — |
| Tax | ₹0 cr | ₹-4 cr | — |
| Net profit | ₹1 cr | ₹-12 cr | — |
| EPS (₹) | ₹0.50 | ₹-8.67 | — |
Operating margin of 5.00% compares with a Fast Moving Consumer Goods sector median of 10.69% across 64 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
Expansion
- The Narkatiaganj refinery conversion is targeted for completion before SS 2026-27, with commercial operations starting in the upcoming sugar season.
- An incineration boiler at Narkatiaganj is targeted for completion by November 2026.
- The Narkatiaganj boiler project is expected to increase annual operating days from 270 to approximately 340.
Problems & risks
- Bihar's 2026-27 SAP has not been announced, while farmers are demanding higher prices.
- Sugar exports are restricted, leaving no export upside for the season.
- The extended duty-free import quota is capping sugar prices despite limited inflows so far.
- Juice and B-heavy molasses are barred as ethanol feedstocks for ESY 2026-27.
What to watch
- Whether operating margin holds above 5.00% after the Q2FY27 recovery.
- Whether interest remains below Rs 7.17 cr as pre-tax profit rebuilds.
- Whether the Narkatiaganj incineration boiler is completed by November 2026, as management said.