Industry Structure and Development

World Sugar

The global sugar production during the year 2025 - 26 SS is expected to be around 186.7 million metric tons as against 177.4 million metric tons reported in the previous year. The consumption during 2025 - 26 SS is expected to be around 178.5 million metric tons against 178.5 million metric tons in the previous year leading to a surplus of 8.3 million metric tons. The 2026 - 27 SS is also expected to be a marginally surplus year.

The increase in sugar production during 2025 - 26 is mainly due to increased production in India, Thailand & China. Brazils sugar output is expected to be 40.24 million metric tons and the ratio of cane crushed to sugar is 50.74% during 2025 - 26 against previous years 48.14%

The sugar price in the international market was quite volatile during the 2025 - 26 sugar season.

Indian Sugar

Indias net sugar production during the sugar year 2025 - 26 is expected to be at 29.29 million metric tons as against the previous years 26.12 million metric tons. Increased area under sugarcane cultivation in Maharashtra, Uttar Pradesh & Karnataka contributed to this increase in sugar production. The sugar consumption in 2025 - 26 SS is expected to be around 28.3 million metric tons, against previous years 28.6 million metric tons.

During 2025 - 26 sugar season, around 3.1 million metric tons of sugar is expected to be diverted to ethanol production against previous years 3.5 million metric tons, which is excluded from the current sugar years estimated production of 29.29 million metric tons.

Government of India has allowed 2 million metric tons of sugar for export during 2025 - 26 season. However, the actual export from the country is expected to be around 0.7 million metric tons due to sluggish international market.

WORLD SUGAR PRODUCTION AND CONSUMPTION

[Chart: Bar chart showing World Sugar Production and Consumption from 2021/22 to 2025/26 (Est). Data points: 2021/22 - Production 172.2, Consumption 174.8, Closing stocks 100.0; 2022/23 - Production 178.3, Consumption 178.0, Closing stocks 100.7; 2023/24 - Production 181.4, Consumption 180.0, Closing stocks 97.8; 2024/25 - Production 177.4, Consumption 178.4, Closing stocks 93.6; 2025/26 (Est) - Production 186.7, Consumption 178.5, Closing stocks 101.8. Source: *CZAPP]

The sugar price in the international market has seen ups and downs during the 2024- 25 sugar season

International Raw Sugar Price Trend in C/Ib

[Chart: Line chart showing International Raw Sugar Price Trend from Apr-25 to Mar-26. Data points: Apr-25 19.51; May-25 17.38; Jun-25 16.93; Jul-25 16.09; Aug-25 16.2; Sep-25 16.2; Oct-25 16.27; Nov-25 14.58; Dec-25 14.91; Jan-26 14.73; Feb-26 14.47; Mar-26 14]

800 750 700 650 600 550 500 493 472 459 467 465 459 422 425 423 415 413 400 350 300 Apr- 25 May- 25 Jun- 25 Jul- 25 Aug- 25 Sep- 25 Oct- 25 Nov- 25 Dec- 25 Jan- 26 Feb- 26 Mar- 26

In the beginning of the year 2025 - 26, the opening stock of sugar was 5.0 million metric tons and the expected closing stock at the end of the sugar year 2025 - 26 would be around 5.3 million metric tons.

For the sugar season 2025 - 26 Fair and Remunerative Price (FRP) is fixed as ¥3,550 /ton linked to 10.25% recovery. A premium/rebate @ 34.60/ton of sugarcane is applicable for the increase / decrease in recovery of every 0.1% from 10.25% recovery. However, for sugar factories having recovery of 9.5% or less, the Fair and Remunerative Price is fixed at ¥3,290,50 /ton.

Though, the sugarcane procurement price has increased year on year, the Minimum Selling Price (MSP) of Sugar, which was fixed at Rs. 31 / Kg in February 2019 has not been increased. However, the actual selling price is market driven.

Ethanol - Overcapacity and Market Gluts

On the Ethanol front, India has achieved 20% ethanol blending with petrol during March 2025 itself.

India currently has an estimated surplus of nearly 20 billion litres, while oil marketing companies have contracted only around 11 billion litres. The gap has led to underuse of distillery capacity, raising concerns about financial pressure across the sector.

A growing surplus of ethanol in India is prompting both policymakers and industry to explore new ways to increase its use beyond cars and two- wheelers. Options under consideration include ethanol- powered cooking stoves, blending ethanol with diesel for generators, and the use of flex- fuel vehicles etc.

Government Policies

Government of India (GOl) has taken the following measures:

(a) GOl is continuing the monthly release mechanism for sugar which was re-introduced from Jan 2019.

(b) 2 million metric tons of sugar is allowed for export during 2025 - 26 season

(c) For the marketing year 2025 - 26, there is no change in Ethanol procurement price & remains same as that of previous year. ¥57.97 per litre for the Ethanol produced from C-molasses, ¥60.73 per litre for the Ethanol produced from BH-molasses and ¥65.61 per litre for the Ethanol produced from 100% sugarcane juice / syrup.

Tamil Nadu Government has taken the following measures:

The Government of Tamilnadu has disbursed a production incentive at the rate of ¥349 /ton of sugarcane, directly to the farmers for the sugarcane supplied during crushing season 2024 - 25.

Opportunities and Threats

The Central Governments push to produce more ethanol, by granting subsidies to build more ethanol plants and increasing procurement prices of ethanol produced from B- Heavy molasses is helping the industry in a big way by absorbing a significant portion of surplus sugar production. In the long run, India will have the option of balancing both sugar and ethanol production based on market requirements. The Govt. Policies like MSP and the monthly sugar release mechanism would help in stabilisation of the sugar price.

The reduction in the availability Agricultural labour force in Tamilnadu and the sharp increase in labour cost have serious impact on the sugarcane cultivation. Most of the factories could not get adequate cane supply to its rated crushing capacity. Therefore, mechanisation of sugarcane cultivation is to be expedited.

Vagaries in the monsoon pattern & continuation of pest and disease incidence in the central and coastal zones of Tamilnadu will have an impact on the availability of sugar cane which is the major raw material.

DOMESTIC SUGAR PRODUCTION AND CONSUMPTION

[Chart: Combined bar and line chart showing Domestic Sugar Production and Consumption from 2021/22 to 2025/26 (Est). Data points: 2021/22 - Production 35.0, Consumption 27.2, Closing stocks 9.0, Export 6.4, Sugar diverted to Ethanol 3.4; 2022/23 - Production 32.8, Consumption 27.5, Closing stocks 6.0, Export 5.7, Sugar diverted to Ethanol 4.5; 2023/24 - Production 31.8, Consumption 29.0, Closing stocks 8.5, Export 2.2, Sugar diverted to Ethanol 2.0; 2024/25 - Production 26.10, Consumption 28.60, Closing stocks 5.00, Export 0.00, Sugar diverted to Ethanol 3.50; 2025/26 (Est) - Production 29.30, Consumption 28.30, Closing stocks 5.30, Export 0.70, Sugar diverted to Ethanol 3.10. Source: ISMA]

Ex Mill Sugar Price In Rs/Qtl

[Chart: Line chart showing Ex Mill Sugar Price from Apr-25 to Mar-26. Data points: Apr-25 4200; May-25 4149; Jun-25 4023; Jul-25 4020; Aug-25 4117; Sep-25 4122; Oct-25 4088; Nov-25 4100; Dec-25 4101; Jan-26 4040; Feb-26 4040; Mar-26 4200]

Segment-wise or product-wise performance of the Company

Sugar:

In 2025 - 26 financial year, 2,33,256 tons of sugarcane were crushed, as compared to the previous years 2,61,780 tons. Due to steep reduction in the sugarcane availability, we have operated Kattur unit alone and not operated Sathamangalam unit based on the viability. This decrease in crushing volume is mainly due to decrease in cane planting acreage in the command area coupled with pest and disease.

Power:

Power generation in the financial year 2025 - 26 was 133.99 lakh units against the previous years 186.34 lakh units. This decrease in power generation is due to less cane crushing compared to the previous season. The Long term PPA with TNP DCL continues for Sathamangalam unit with a tariff of Rs. 5.189/Kw- hr. From Kattur unit, power is being sold to open access consumers and IEX.

Alcohol:

During the financial year 2025 - 26, the total alcohol production was 14,395 KL against previous years total production of 16,895 KL. As the availability of own molasses was inadequate, the company had procured 58,842 metric tons of molasses from other factories in the state as well from other state mills and operated distillery for the maximum possible number of days.

Quantitative Performance details:

The Company is engaged in three major segments, namely Sugar, Cogeneration of power (Cogen) and Distillery. The segment wise performance for the year is as under:

Particulars	Sugar (Tonnes)	Power & Others (Lakh Units)	Distillery (Lakh litre)
Production	21,751	134	144
Sales	22,875	151	63

(in Lakhs) Particulars	Sugar (Tonnes)	Power & Other (Lakh Units)	Distillery (Lakh litre)
Sales	9,342	2,859	12,075
Operating Profit	(2,029)	367	2,550

Outlook:

Indias Sugar production for the sugar season 2025 - 26 is estimated to be around 29.3 million metric tons after considering the diversion of sugarcane juice / syrup / B- Heavy molasses. This will result in closing stock of around 2.5 months sugar availability in the market and hence the price of sugar is likely to be stable. Global sugar production is expected to be around 186.7 million metric tons and consumption is estimated to be around 178.50 million metric tons. The predictions of below normal southwest monsoon in India during 2026 is expected to have an impact on the cane planting acreage from the current level.

Risk and Concerns

Industry Risk

Whenever there is surplus sugar production in the country the selling price falls below the cost of production. Most of the times when India produces surplus sugar, the Global sugar production also becomes surplus. Hence, exports also become unviable.

Risk Mitigation

Ethanol production capacity should be increased to absorb surplus sugar available in the market for stabilisation of the sugar price in the long run. The development of alternate usage of sugar and positive and proactive policies by the Government are the key drivers. The monthly sugar release mechanism and minimum selling price for sugar introduced by the Central Government help in stabilisation of sugar price.

Risk specific to the Company

High cost of labour, better revenue from competitive crops & fear of pest & disease, will adversely affect raw material availability for the company and in turn the overall capacity utilization. Compared with 2024 - 25 crushing season, sugarcane availability for the 2025 - 26 crushing season is lower by around 10% and sugar recovery is around 3% higher than that of previous year. Further, pest and disease incidence in sugarcane crops in the central part of Tamilnadu and in the Companys command area forced the farmers to switch to alternative crops as a rotation measure. Also, competitive crops like Paddy, tapioca, banana, gingerly etc., fetch better revenue compared to sugarcane. All these will have a cascading effect during 2026 - 27 crushing season.

Risk Management

Your company gives top priority to the development of sugar cane in the command area by optimizing utilisation of all resources.

A few major initiatives taken by the company are given below.

Working on sugarcane yield improvement through Al platform.

(ii) Working on the development of new sugar cane clones having characteristics like higher yield, high sugar recovery, early maturing, drought tolerant, pest & disease resistant etc., in association with SISMA, TNAU and Sugar cane Breeding Institute, Coimbatore. (iii) Bulk planting of high yield and high sugar varieties like Co- 86032, Co- 18009 etc., in both the units command areas. (iv) Educating farmers on modern cultivation practices by organising technical seminars, providing technical support, demonstrating modern practices in Demo plots, etc. (v) Providing technical and financial support to the farmers on the development of irrigation infrastructure such as well deepening, lift irrigation, installation of new bore / pumps etc. (vi) Promoting water conservation systems like micro irrigation systems in association with the State Agriculture Department. (vii) Mechanization of cane cultivation, right from ploughing to harvest to the possible extent to reduce the cultivation cost to the farmers and the dependency on labour.

Discussion on Financial Performance with respect to Operational Performance

Operational Review and State of Affairs

Sl. No.	Production Performance	2025 - 2026	2024 - 2025
(i)	No of crushing days: Kattur Unit Sathamangalam Unit	121 Nil	100 12
(ii)	Cane Crushed (tons)	2,33,257	2,61,780
(iii)	Sugar Recovery (%)	9.26	8.94
(iv)	Sugar Produced from cane (Quintals)	2,17,510	2,39,970
(v)	Alcohol Produced (KL)	14,405	16,895
(vi)	Power Produced (lakh kwh)	134	186

Due to decrease in cane availability, the sugarcane crushing has decreased around 11% and sugar production is down around 9% compared to the previous year. The Fair and Remunerative Price (FRP) has risen by 4.50%. Due to this factor coupled with lower volume of cane availability resulting in higher cost of production of sugar has ended the segment reporting a higher loss compared to previous year despite marginal improvement in sugar recovery per ton of sugarcane.

In the distillery segment, profitability decreased significantly due to lower production by 15% despite increase in sales by 7% with the average selling price / litre increasing by around 9%. This is directly attributable to shortage of molasses owing to lower sugarcane crushing as the Company resorted to buying molasses from outside the State of Tamil Nadu and higher price due to persistent demand. Also, the Company had to absorb the GST on Molasses bought out and other input credits as costs due to implementation of VAT on Extra Neutral Alcohol.

In the power segment, the export of power to the grid has declined by over 72% consequent to crushing at under capacity more frequently due to erratic sugarcane supplies.

The finance cost marginally increased by around 26% compared to the previous year due to the lower revenue streams across the segments resulting in higher usage of short- term borrowings.

Internal Control Systems and their adequacy

The Company has established a system of internal control across all its business operations and for safeguarding the Assets. The functions of Internal Audit are carried out by an independent firm of Chartered Accountants, who submit their Reports on a quarterly basis to the Management. These Reports are placed before the Audit Committee at its meetings for review.

The Board, Audit Committee and the Management ensure that the internal financial control system operates effectively, and they periodically review the effectiveness of internal control system in order to ensure due and proper implementation and due compliance with applicable laws, accounting standards and regulatory norms.

accounting standards and regulatory norms.

The Internal Auditors review the adequacy of internal control systems and suggest necessary checks and balances to ensure and increase the effectiveness of the system and that the policies are in place for approval and control of expenditure.

Human Resources / Industrial Relations

Human resources are the most important resources in an organization and need to be used efficiently, because the success, stability and growth of an organization depend on its ability in acquiring, utilizing and developing human resources for the benefit of the Organization. Employees attend a series of training sessions on Technical and soft skills as part of the Employee Development Program. Special Onsite Program and In- house Training program were conducted on safety. During the year, industrial relations have continued to be cordial, conducive, and mutually productive.

The Human Resources Department created an Internal Complaints Committee for the prevention and redressal of sexual harassment of women at workplace as per the requirement of Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. There were no incidents of sexual harassment reported during the year under review, in terms of the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The total number of employees as on 31st March 2026 was 441 in respect of sugar and allied operations.