GLOBAL ECONOMIC OVERVIEW
The global macro-economic environment remains challenging, influenced by geopolitical events such as trade tensions and tightened financial conditions. According to the April 2025 IMF World Economic Outlook, global economic growth is projected to be at 2.8 percent in 2025 and 3 percent in 2026 down from 3.3 percent for both years in the January 2025, corresponding to a cumulative downgrade of 0.8 percentage point, and much below the historical (2000 19) average of 3.7 percent. This downward revision stems mainly from the sharp escalation of trade tensions, triggered by the United States near-universal tariff announcements in April 2025. On April 9, 2025, President of United States announced a 90-day suspension of the additional reciprocal tariffs for nearly 60 countries that had not retaliated, including the EU, Vietnam, India, and many others. The lack of clarity on post-pause trade dynamics continues to weigh on global sentiment, investment planning, and supply chain resilience.
In the reference forecast, growth in advanced economies is projected to be 1.4 percent in 2025. Growth in the United States is expected to slow to 1.8 percent, a pace that is 0.9 percentage point lower relative to the projection in the January 2025, on account of greater policy uncertainty, trade tensions, and softer demand momentum, whereas growth in the euro area at 0.8 percent is expected to slow by 0.2 percentage point. In emerging market and developing economies, growth is expected to slow down to 3.7 percent in 2025 and 3.9 percent in 2026, with significant downgrades for countries affected most by recent trade measures, such as China. Global headline inflation is expected to decline at a pace that is slightly slower than what was expected in January, reaching 4.3 percent in 2025 and 3.6 percent in 2026, with notable upward revisions for advanced economies and slight downward revisions for emerging market and developing economies in 2025.
International sugar prices for both raw and white sugar are influenced by a complex interplay of global supply and demand, weather patterns, and production costs. Currently, raw sugar prices are lower due to a global oversupply, while white sugar prices are higher, with the premium reflecting strong demand and potential refinery margins. Global sugar production is primarily driven by Brazil and India, with significant contributions from Thailand, China, and the European Union. In the 2024 25, Brazil maintained its position as the worlds leading sugar producer, despite facing challenges from adverse weather conditions. The countrys sugar production reached approximately 40.17 million MT, a decrease of about 5.3% compared to the record 42.42 million MT achieved in the previous season.
2024/25 Sugar Overview
Global sugar production rebounded to one of its highest levels on record, with expectations to reach 189.7 million MT, marking a strong output across several major producing countries. Global sugar consumption is steadily rising in line with population growth and changing dietary patterns. Analysts expect global sugar consumption to exceed 180 million MT in the 2024 25 season, reflecting a continuation of the long-term upward trend. As more people gain access to processed foods and urbanization accelerates in developing economies, sugar demand continues to climb. This growing consumption is a key factor influencing global sugar markets, pricing dynamics, and trade flows particularly as major producers balance domestic needs with export opportunities.
Global sugar exports saw strong growth, with total shipments estimated at around 69 million MT, marking an 8.4% increase from the previous year. This expansion was driven largely by Brazil, which maintained its position as the worlds largest sugar exporter, contributing nearly 35 million tonnes, or about 49% of total global sugar exports. Globally, the sugar trade was valued at approximately $39.3 billion, with raw sugar accounting for nearly 60% of the total volume and refined sugar comprising the rest. Major importers included Indonesia, China, and the United States, reflecting strong demand in Asia and North America. Overall, sugar exports remain a critical pillar of the world economy, influenced heavily by crop cycles, trade policies, and shifting global consumption trends. (Source: IMF, World Economic Outlook April 2025, USDA)
INDIAN ECONOMIC REVIEW
India, the worlds fourth-largest economy, has emerged as the fastest-growing major economy and is on track to become the worlds third-largest economy with a projected GDP of $7.3 trillion by 2030.India is projected to be worlds fastest growing major economy (6.3% to 6.8% in 2025-26). This transformation is the result of a decade of decisive governance, visionary reforms, and global engagement. Driven by robust domestic demand, a dynamic demographic profile, and sustained economic reforms, India is asserting its rising influence in global trade, investment, and innovation.
Indias GDP has witnessed a remarkable transformation over the past decade. At current prices, GDP has increased from 106.57 lakh crore in 2014 15 to an estimated 331.03 lakh crore in 2024 25, an approximate threefold rise in just ten years. In 2024 25 alone, nominal GDP grew by 9.9% over the previous year, while real GDP (at constant prices) increased by 6.5%, reflecting sustained economic momentum. The growth momentum picked up during the year, with GDP growth improving from 5.6% in Q2 FY 2024-25 to 6.2% in Q3 FY 2024-25, driven by a strong performance in the agriculture and services sectors on the supply side and steady improvements in domestic consumption and core exports on the demand side. This steep growth reflects the countrys expanding economic base and rising income levels. Indias total exports have shown remarkable growth over the past decade, rising from US$ 468 billion in 2013 14 to US$ 825 billion in 2024 25, marking a substantial increase of approximately 76%. This growth was supported by a marginal increase in merchandise exports, which stood at US$ 437.42 billion in FY 2024 25 compared to US$ 437.07 billion in the previous year, reflecting stability in goods-based trade. Over the decade, merchandise exports rose from US$ 310 billion in 2013 14 to US$ 437.42 billion in 2024 25, marking a 39% increase, driven by sectors such as engineering goods, petroleum products, and electronics. Services exports more than doubled, expanding from US$ 158 billion in 2013 14 to US$ 387 billion in 2024 25, registering a remarkable growth. Indias export surge in FY 2024 25 has been propelled by its top three export sectors engineering goods, electronic goods, and drugs & pharmaceuticals which have played a pivotal role in strengthening the countrys trade performance. Over the last two decades, India has seen a remarkable transformation in its inflation landscape. Between 2004 05 and 2013 14, inflation averaged 8.2%, with several years experiencing double-digit rises, largely driven by surging food and fuel prices. This period put pressure on household budgets and created uncertainty for businesses. However, from 2015 16 to 2024 25, inflation has moderated significantly to an average of around 5%. Retail inflation fell to 4.6% in 2024 25, the lowest since 2018 19, highlighting the success of RBIs pro-growth monetary policy in balancing growth and price stability. This shift reflects strong policy interventions, including inflation-targeting by the Reserve Bank of India, improved supply chain management, and sound fiscal discipline by the Government. As a result, price stability has improved, boosting consumer confidence and supporting sustainable economic growth. (Source: Press Information Bureau, https://www.pib.gov.in) Indian Sugar Industry Outlook
The Indian sugar industry, a cornerstone of the nations agro-based economy, is experiencing a significant transition in 2025. As the worlds second-largest sugar producer and consumer, India plays a pivotal role in the global sugar market. The sector supports approximately 50 million farmers and contributes substantially to rural employment and income. In the 2024 25 sugar season, the industry faced challenges due to adverse weather conditions, including droughts and excessive rainfall. This reduced sugarcane yields in key producing states like Maharashtra, Karnataka, and Uttar Pradesh. As a result, the Indian Sugar and Bio-Energy Manufacturers Association (ISMA) revised its sugar production estimates downward to 26.2 million MT, an 18% decline from the previous year. Furthermore, approximately 3.5 million MT of sugar is expected to be diverted for ethanol production, aligning the governments biofuel blending targets. Despite the production shortfall, ISMA assures that domestic sugar availability remains sufficient to meet the countrys consumption needs, projected at 28 million MT for the season. This confidence is bolstered by an opening stock of 8 million MT and a closing stock forecast of 5.4 million MT by September 2025, ensuring more than two months of domestic demand coverage. The governments export policy has also helped stabilize the market. In January 2025, the government permitted the export of 1 million MT of sugar, a decision based on the initial higher production estimates. Subsequent downward revisions in production forecasts have raised concerns about the adequacy of domestic supplies. Nevertheless, the government maintains that the existing stock levels are sufficient to meet both domestic consumption and ethanol production requirements. In a significant move to support sugarcane farmers, the Indian government has increased the Fair and Remunerative Price (FRP) of sugarcane by 4.41%, setting it at 355 per quintal for the 2025 26 season, up from 340. Based on a 10.25% sugar recovery rate, this adjustment includes a premium of 3.46 for every 0.1% increase in recovery and ensures a minimum payment of 329.05 per quintal for recoveries below 9.5%. The decision is expected to benefit approximately 50 million sugarcane farmers and 500,000 workers in the sugar industry. This increase in FRP will likely elevate raw material costs for sugar mills, potentially impacting their margins, especially in a year already marked by lower sugarcane yields and restricted export opportunities.
(Source: Economic Times)
ISMA has released its first estimate for 2024-25 season, according to which the net sugar production is likely to be 29.3 million tones (MT), lower than 31.96 MT in the previous season. According to ISMA, the gross production of sugar may be 33.3 MT, which is same as was released in the preliminary estimate in July. In the last sugar season, the gross production was 34.1 MT, it said.
However, due to a carry forward stock of about 8.5 MT from the previous season, the availability of sugar in the domestic market is likely to be comfortable. Indias sugar consumption was about 29 MT in the entire 2023-24 sugar season, based on the sales allocation data of the government.
“Sufficient availability of sugar will not only ensure a comfortable stock for domestic consumption and sustain the Ethanol Blending Program (EBP), but also open the room for exports, contributing to maintain the financial liquidity of sugar mills, enabling timely payments to farmers.”
The Agriculture Ministrys sugarcane production estimate showed the cane output to fall to 439.93 MT in 2024-25 from 453.16 MT in 2023-24. Sources said the government has arrived at the estimate after taking into account acreage data through satellite mapping as well as the pest infestation reports from the field. Sources said there is a drop in acreage from 5.74 million hectares (MH) to 5.37 MH, but yield is expected to rise.
ISMA forecast said that total availability will be 41.78 MT, internal consumption 29 MT, sugar (sucrose) diversion towards ethanol 4 MT and closing stock (as on September 30, 2025) 8.78 MT in the 2024-25 season. State-wise, it said, Maharashtras sugar production may drop from 11.85 MT to 11.1 MT, Karnataka flat at 5.81 MT and Uttar Pradesh also flat at 11 MT. Combined sugar production in other States may also fall to 5.38 MT from 5.41 MT. (Source: The Hindu Business Line)
The Indian Sugar and Bio-energy Manufacturers Association (ISMA) has released the first estimates of sugar production for the 2025 26 season. In ISMAs meeting on 31st July 2025, attended by representatives from sugar-producing states across the country, Indias gross sugar production (before diversion) is estimated to increase by 18%, reaching around 349 lakh tonnes, compared to 295 lakh tonnes produced in 2024-25.
According to the sugar body, In Maharashtra, the cane area has increased to 14.93 lakh hectare for 2025-26 SS, against last year area of 13.82 lakh hectares i.e. up by approximately 8%. This years crop quality is significantly better than last year, supported by a higher share of plant cane, improved water availability, and timely, adequate rainfall. Abundant May rains and normal monsoon levels from June to July, along with 30 40% higher reservoir levels, have boosted early growth and overall crop prospects.
In Karnataka, sugarcane area has increased by 6% to 6.76 lakh hectares, supported by favorable rainfall and better reservoir levels. As a result, improved crop quality is expected to boost yield and sugar recovery, with gross sugar production likely to rise by 23% to 66.19 lakh tonnes from 53.68 lakh tonnes in 2024-25 SS.
In Uttar Pradesh, cane area has declined by 3% to 22.57 lakh hectares, but crop condition is significantly better than last year. Mill-level initiatives and disease control measures are expected to improve yield and recovery, with gross sugar production estimated to rise slightly to 102.53 lakh tonnes from 100.74 lakh tonnes in 2024-25.
The sugar body noted that while its still early to accurately predict full-season crop production especially with the southwest monsoon only halfway through ISMA traditionally releases preliminary estimates at this stage to indicate likely trends. Current assessments are based on detailed analysis, assuming normal conditions ahead. (Source: www.Chinimandi.com)
Sugar Production and Diversion to Ethanol
India is set to significantly enhance its ethanol production capacity, targeting an annual output of approximately 1,050 crore liters by the Ethanol Supply Year (ESY) 2025. This objective forms part of a dual-feedstock strategy that utilizes both grain and sugarcane. Grain-based ethanol production is projected to increase markedly from 380 crore liters to nearly 700 crore liters by the next season, while sugarcane-based production will supplement the remaining requirement. This integrated approach is designed to support the achievement of the 20% ethanol blending target in petrol, while also aiding in the effective management of sugar inventories. The anticipated high carry-over stocks at the end of the current season, due to regulatory constraints on ethanol production and sugar exports, underscore the need for such a strategy. The governments calibrated allocation of sugarcane for ethanol production, aligned with projected sugar demand-supply dynamics, remains essential to maintaining market stability and ensuring timely payments to farmers. (Source: Economic Times)
Maintaining a balance between sugar production and ethanol diversion is crucial for the overall stability of the sector. Without timely diversion to ethanol or the announcement of exports, excess sugar supply could lead to a glut in the domestic market. This oversupply would likely depress sugar prices, adversely impacting the profitability and viability of sugar mills. With gross sugar production projected at approximately 35 million tonnes and domestic consumption estimated at around 28.3 to 28.4 million tonnes, it becomes essential to divert about 4.5 to 5 million tonnes towards ethanol production. This strategic diversion will help manage surplus stocks effectively. A well-coordinated approach between ethanol production, sugar availability, and exports is key to ensuring market stability and long-term sustainability. (Source: www.Chinimandi.com)
The National Federation of Cooperative Sugar Factories (NFCSF) has urged the government to undertake key policy measures, including revising the Minimum Selling Price (MSP) of sugar to reflect rising production costs and announcing an early diversion target of 50 Lakh Metric Tonnes (LMT) for ethanol in the 2025 26 season. The NFCSF also called for revising ethanol procurement prices, particularly for ethanol derived from sugarcane juice and B-heavy molasses, and emphasized the need for a continued progressive export policy to support price stability and benefit port-based states. (Source: www.Chinimandi.com)
GLOBAL SUGAR SECTOR OVERVIEW
Global sugar production is projected to increase by 8.6 million tonnes, reaching a total of 189.3 million tonnes. This growth is primarily driven by higher output in Brazil and India, which is expected to more than compensate for reduced production in the European Union. However, global sugar exports are anticipated to decline, largely due to lower shipments from the European Union and Thailand. Meanwhile, ending inventories are forecast to rise, mainly on account of increased stock levels in India and China.
Sugar prices have remained under pressure due to expectations of higher global production and weaker demand signals, including sizable deliveries against NY May futures. Brazils 2025/26 sugar output is projected to rise by 2.3% to 44.7 MMT, while India is expected to see a bumper crop due to above-normal monsoon forecasts. Datagro forecasts Brazils Center-South production to rise 6% to 42.4 MMT, and Thailands 2024/25 production has increased by 14% to 10 MMT. The global market is expected to shift from a deficit of 3.7 MMT in 2024/25 to a surplus of 2.7 MMT in 2025/26, according to Green Pool. Despite recent export restrictions, India has allowed 1 MMT of sugar exports this season. However, supportive factors include an 18% drop in Indias current season sugar production and a 5.3% y/y fall in Brazils Center-South output through March. Additionally, ISO has raised the global deficit forecast to 4.88 MMT, reflecting tighter supply due to crop damage from drought and fires in Brazil.
India production is estimated to jump over 25 percent to 35.3 million tons on favorable weather and increased area. Consumption is anticipated to rise, driven by food service sector growth, while exports and stocks are both up with the increase in supply.
U.S. sugar production for 2025/26 is forecast to decline slightly to 8.4 million tons, with imports projected lower due to minimum quota allocations and reduced volumes from Mexico. While consumption remains stable, ending stocks are expected to decrease primarily due to reduced import levels.
Brazils sugar production is forecast to reach a record 44.7 million tons in 2025/26, driven by favorable weather and improved yields. While the sugar/ethanol mix is expected to shift slightly toward ethanol, exports are projected to rise due to increased output.
EU sugar production is forecast to decline by 9% to 15.0 million tons in 2025/26 due to a 10% reduction in sugar beet area, particularly in France and Germany. While consumption and stocks remain stable, imports are expected to rise and exports to decline in response to lower output.
Thailands sugar production is forecast to increase by 2% to 10.3 million tons in 2025/26, supported by higher sugarcane output and improved yields. Despite rising domestic consumption, exports are projected to decline due to stronger competition from major exporters like Brazil, while stocks remain stable. (Source: USDA Foreign Agriculture Service, Nasdaq.com)
ISO sees larger global sugar deficit
The International Sugar Organization (ISO) forecasts a significant global sugar deficit of 5.466 million tonnes in 2024/25 the largest in nine years driven primarily by lower-than-expected production in India and Pakistan. Global sugar production is revised downward to 174.795 million tonnes, a decline of 6.469 million tonnes from the previous season. World consumption is projected to reach a record 180.261 million tonnes, though growth is modest at less than 0.6%. These updates reflect minor downward revisions to consumption estimates based on member submissions.
According to the International Sugar Organization (ISO), shifting trade dynamics are a key factor influencing the sugar market. Global sugar exports in 2024/25 are projected to decline sharply to 63.323 million tonnes from 69.342 million tonnes in the previous season, while import demand is expected to reach 63.133 million tonnes, resulting in a neutral trade balance. The widening global supply deficit is being offset by drawdowns in national stockpiles, which may explain the muted price response. However, global sugar stocks are forecast to end the season at their lowest level in nine years. (Source: www.Chinimandi.com)
Global Ethanol Production
Global ethanol production is projected to rise by 1.9% in 2025 to 120.7 billion liters, with consumption expected to reach 119.5 billion liters, reflecting continued growth despite economic challenges. This resilience highlights the ongoing structural support from renewable fuel mandates across key markets. Regionally, U.S. production is expected to moderate at 60.7 billion liters, while Brazils output is set to grow to 34.48 billion liters, driven by record corn-based ethanol production of 9.5 billion liters. India is forecast to see the most significant increase, reaching 8.0 billion liters in 2025, aligned with its 20% blending target and a roadmap toward 30% by 2030. (Source: www.Chinimandi.com)
EU beet sugar market
The European Unions sugar beet sector is projected to contract in the 2025/26 marketing year due to declining sugar prices, rising production costs, and an oversupplied market. Total beet sugar production is estimated to fall by 9% to 14.8 million tonnes, alongside a 10% reduction in harvested area to 1.35 million hectares. Major declines are expected in France, Germany, Poland, Belgium, and the Netherlands, as growers reassess profitability amid increased competition from alternative crops. Additional pressures include limited yield potential in Nordic regions and high irrigation costs in Spain.
The projected contraction in the EU sugar beet sector for 2025/26 reflects a broader downward trend in both area and yields, driven by reduced access to plant protection products and growing production uncertainties. These challenges follow structural changes initiated by the abolition of the EU sugar quota system in 2017, which exposed producers to greater global price volatility and intensified land-use competition. Additionally, adverse weather conditions such as excess rainfall, drought, and pest outbreaks have led to increased caution in planting decisions. Despite declining output, industry stakeholders anticipate that reduced supply may contribute to long-term price stabilization.
For the 2024/25 marketing year, EU beet sugar production has been revised upward to 16.3 million tonnes, reflecting better-than-expected yields and adjusted non-food use data. Despite this, the sector faced considerable variability due to extreme weather, pest pressures, and economic challenges such as increased input costs and rising Ukrainian imports. Excessive rainfall delayed sowing across several countries and led to disease outbreaks, reducing sugar content in key regions like France and Germany. Pest infestations, particularly in Slovakia, Germany, and France, further impacted yields, although strong harvests in Poland and northern Germany provided some regional balance.
The EU sugar sector is experiencing a decline in cultivation area due to lower domestic prices, rising production costs, and increased competition from Ukrainian imports and potential Mercosur trade liberalization. This trend reflects broader structural challenges, including reduced access to plant protection products and heightened production and market risks. (Source: https://apps.fas.usda.gov)
Global Sugar Price Trends
The Food and Agriculture Organization (FAO) Sugar Price Index declined by 5.2% in June 2025 to 103.7 points, marking its lowest level since April 2021, driven by improved supply prospects in major producing countries. In Brazil, favourable dry weather accelerated harvesting and crushing activities, alongside a higher allocation of sugarcane toward sugar production, leading to stronger-than-anticipated output and exerting downward pressure on global prices. Furthermore, early and above-average monsoon rains, coupled with increased plantings in India and Thailand, have enhanced crop outlooks for the 2025/26 season, contributing further to the decline in international sugar prices.
Sugar futures settled at approximately 16.6 cents per pound, maintaining their highest level since July 24, supported by rising oil prices that could incentivize sugar mills to divert more cane towards ethanol production, potentially reducing sugar output. Additionally, the recent period of historically low sugar prices has spurred renewed demand, with increased buying interest noted from countries such as Pakistan, the Philippines, and Iran. Market participants are also anticipating the upcoming release of sugar and cane production data for Centre-South Brazil, where S&P Global Commodity Insights estimates a 12.5% year-on-year increase in sugar output to 3.3 million tonnes for the first half of July. Meanwhile, projections remain optimistic for a strong sugar harvest in India for the upcoming season. (Source: tradingeconomics.com)
INDIAN SUGAR INDUSTRY OVERVIEW
Sugar Industry is an important Agro-based industry that impacts rural livelihood of about 5.5 crore sugarcane farmers & their families & around 5 lakh workers directly employed in sugar mills & other ancillary activities.
The sugar industry is a vital sector of the national economy, with India being the worlds second-largest producer and the largest consumer, accounting for approximately 15.5% of global consumption in 2022 23. While domestic consumption has shown steady growth rising 10% since 2018 19 production remains cyclical. The global industrial sugar market, valued at USD 39.59 billion in 2023, is projected to reach USD 50.76 billion by 2032, growing at a CAGR of 3.23%. Despite being viewed as a traditional industry with limited technological advancement, recent initiatives such as ethanol fuel blending and record-level sugar exports reflect a shift toward modernization. These efforts demonstrate a growing collaboration between the government and industry stakeholders.
Indias net sugar consumption is projected to reach an unprecedented 30 million tonnes in the 2024 25 sugar season, driven by a consistent year-on-year growth rate of 2.2%. Net sugar consumption refers to the total consumption after accounting for the quantity diverted towards ethanol production. According to estimates from the Ministry of Food, sugar production for the 2024 25 season is expected to be 33 million tonnes. This will be sufficient to meet the domestic consumption requirement of 29 million tonnes and support the diversion of approximately 4.5 million tonnes for ethanol production. Indias sugar industry consists of organized and unorganized sectors.
The organized sector comprises sugar factories which convert sugarcane into refined sugars as well as by products like molasses, bagasse, and press mud. The unorganized sector essentially includes traditional produce such as gur (jaggery) and Khand sari (semi-processed sugar). The Food and Agriculture Organization of the United Nations states that 124 countries produce sugar. Approximately 75 percent of the sugarcane produced in India is utilized by the sugar mills to produce sugar and byproducts.
Yet, India might be termed the largest overall sugar producer if we include alternative sweeteners, namely, Khand sari and Gur. India produces about 35.5 crore tonnes of sugarcane every year on average, out of which 3 crore tonnes is in the form of product sugar.
As of March 15, 2025, The Indian Sugar and Bio-Energy Manufacturers Association (ISMA) stated that India has produced approximately 238 lakh tonnes of sugar, with nearly 200 mills representing 38% of the total still in operation. Uttar Pradesh, a key sugar-producing state, continues to see active operations in about 75% of its mills, aided by improved cane recovery, which is expected to extend the crushing season until April.
ISMA emphasized that policy interventions, including timely exports, have significantly stabilized the industry. These measures have enabled prompt payments to farmers, positively impacting around 5.5 crore cane-growing families. The association concluded that the current balance between domestic stocks and exports ensures both industry viability and food security.
The Centres decision to increase sugarcane Fair and Remunerative Price (FRP) to 355 per quintal for the next season aims to strike a balance between farmer interests and sugar mill economics, with safeguards in place for lower recovery rates. The Centre has approved an increase in the Fair and Remunerative Price (FRP) of sugarcane to 355 per quintal for the 2025-26 sugar season, up from 340 per quintal in the previous season.
The Indian Sugar and Bio-energy Manufacturers Association (ISMA) has released the first estimates of sugar production for the 2025 26 season and stated that Indias gross sugar production is estimated to increase by 18%, reaching around 349 lakh tonnes, compared to 295 lakh tonnes produced in 2024-25.
The total acreage under sugarcane in the country is estimated to be around 57.24 lakh hectares in 2025-26 SS against 57.11 lakh hectares in 2024-25 SS i.e. marginally higher than last year.
S. |
States | Sugarcane Acreage |
% | 2024-25(P) | 2025-26(E) | |||
No. |
Change | |||||||
| Estimated Gross | Estimated | Net sugar | Estimated Gross | |||||
| over last | ||||||||
| Sugar | sugar | production | Sugar | |||||
| year | ||||||||
| Production | diversion | Production | ||||||
Lakh Hectares |
Before Diversion | After Diversion | Before Diversion | |||||
| 2024-25 | 2025-26 | Lac tons | Lac tons | Lac tons | Lac tons | |||
1. |
Uttar Pradesh | 23.30 | 22.57 | -3% | 100.74 | 92.76 | 102.53 | |
2. |
Maharashtra | 13.82 | 14.93 | 8% | 93.34 | 80.96 | 132.68 | |
3. |
Karnataka* | 6.40 | 6.76 | 6% | 53.68* | 41.86* | 66.19 | |
4. |
Tamil Nadu* | 2.07 | 2.05 | -1% | 6.99* | 6.93* | 7.15 | |
5. |
Gujarat | 2.31 | 2.22 | -4% | 8.94 | 34.04 | 8.92 | 9.41 |
6. |
Others | 9.21 | 8.71 | -5% | 31.38 | 29.60 | 31.06 | |
7. |
Total (estimated end | 57.11 | 57.24 | 0% | 295.07 | 34.04 | 261.03 | 349.01 |
| of season) | ||||||||
*Special season2024-25 is in progress in Karnataka and Tamil Nadu; therefore, final production figures have been estimated.
In Maharashtra, the cane area has increased to 14.93 lakh hectare for 2025-26 SS, against last year area of 13.82 lakh hectares i.e. up by approximately 8%. The combination of better yields and increased cane area is expected to boost gross sugar production to 132.68 lakh tonnes against 93.34 lakh tonnes last year i.e. up by approximately 42%. In Karnataka sugarcane area has increased by about 6% to 6.76 lakh hectares against 6.4 lakh hectares last year. Accordingly, gross sugar production is expected to increase by 23% to 66.19 lakh tonnes against 53.68 lakh tonnes produced in 2024-25 SS.
In Uttar Pradesh, cane area has declined by approximately 3% to 22.57 lakh hectares against 23.30 lakh hectares last season. However, the overall condition of the standing crop is much better than last year. Moreover, due to cane development initiatives at the mill level, including timely corrective measures and varietal replacements, the incidence of red rot and other disease infestations is expected to remain minimal in the 2025-26 sugar season. Accordingly, it is estimated that gross sugar production (before diversion) in the state would be 102.53 lakh tonnes against last year production of 100.74 lakh tonnes.
(Source: https://economictimes.indiatimes.com, https://www.wrightresearch.in/ https://www.chinimandi.com/ https://www.thehindu.com/)
For the marketing year (MY) 2025 26, Indias centrifugal sugar consumption is forecasted at 31 million metric tonnes (MMT) on a raw value basis, reflecting a 5% increase from the current estimate of 29.5 MMT. With the national population projected to reach 1.47 billion, per capita sugar consumption is anticipated to rise to 0.021 MMT, compared to 0.02 MMT in the current year. Industry sources suggest that this upward trend in per capita sugar consumption is likely to continue, approaching the global average of 0.023 MMT. This expected increase aligns with Indias projected GDP growth of 6.2% for 2025 26, driven by expanding private and industrial consumption.
Several factors are influencing sugar demand, including the following:
A growing number of domestic consumers are gaining access to disposable income, which has risen by 8.5 percent in the past year, leading to increased consumption of processed foods and sweetened beverages, where sugar is a key ingredient. Changes in dietary habits, influenced by exposure to urban culture, including fast food and e-commerce, are expected to further boost the demand for processed foods, subsequently increasing sugar consumption. There has been a significant uptick in the use of catering services by Indian consumers for various events, which is enhancing institutional demand for sugar. Indias extensive and largely unorganized catering sector, integral to local festivals and gatherings, ranks among the top sugar consumers. Additionally, urban consumers are increasingly interested in alternative sweeteners like gur and khandsari, which are perceived to offer certain health benefits.
(Source: United States Department of Agriculture, Foreign Agriculture Service)
DRIVERS OF SUGAR DEMAND IN INDIA
1. Population Growth: Indias population is growing at a rate of 0.89% and has reached 1.45 billion in 2025, the highest global population increment. The country is the most populous country in the world in terms of population and has catalyzing sugar demand.
2. Rising Incomes: As household incomes rise, consumers tend to purchase more processed foods and beverages, which are major consumers of sugar.
3. Expansion of the Food and Beverage Industry: The processed food and beverage industry is a significant consumer of sugar. Growth in this sector, driven by factors like convenience and changing consumer preferences, directly contributes to increased sugar demand.
4. Government Initiatives and Support: Government policies supporting sugarcane cultivation and financial assistance to farmers can ensure a steady supply of raw material for sugar production. These initiatives can also indirectly influence sugar demand by maintaining stable prices and availability.
5. Robust soft drinks consumption: Soft drinks industry in India is expected to grow annually by 9% between 2021 and 2025, strengthening the offtake of sugar.
INDIAN ETHANOL SECTOR OVERVIEW
The India ethanol market is an important part of the countrys biofuels and energy industry, which is constantly moving towards a complex intersection of policy, change in demand and emerging technology. While most conversations around this market are focused on the production volume or fuel combination mandate, a darker view highlights several low-discus dynamics that will shape its direction in the coming years. Indias ethanol market, traditionally reliant on sugarcane, is shifting toward alternative feedstocks like rice straw, maize, and damaged grains due to climate and water concerns. This transition will require new localized supply chains. Second-generation ethanol remains in early development but holds transformative potential. Digital technologies such as AI and blockchain are set to enhance supply chain traceability and efficiency. These tools will quietly revolutionize backend operations in ethanol manufacturing. Competitive advantage will shift from production volume to streamlined and intelligent operations.
Beyond vehicular fuel, ethanol demand is rising in industrial and chemical sectors due to global ESG pressures. This opens export opportunities but also requires stringent quality and traceability standards. Infrastructure especially transport, storage, and distribution networks must scale rapidly to support growth.
The regulatory environment is expected to evolve to support clean energy goals, addressing land use, logistics, and farmer compensation. Future policies may vary by state to reflect regional suitability for biomass-based ethanol. Incentives will need to align with long-term sustainability and infrastructure goals.
India ethanol market is estimated to reach $20,892.5 Million by 2032; growing at a CAGR of 13.2% from 2025 to 2032.
GROWTH FACTORS
The India ethanol market will witness a noticeable change run by both internal strategies and external pressures. One of the strongest forces that forward this market will be the growing government mandate to combine ethanol with petrol. These policies will not only promote the use of cleaner fuel, but will also reduce the countrys dependence on imported crude oil. At the same time, increasing global push for permanent practices and energy security will support the development of ethanol as a viable option. Ethanol, being a renewable fuel, will naturally attract attention as India tries to balance development with environmental responsibility.
A major challenge that will continue to face the industry is a limited availability of feedstock. Since ethanol in India is mostly produced from sugarcane and maize, this area will be heavily connected to agricultural production. Ethanol requires a reliable network for storage, transportation and distribution, and these features have not yet been fully developed across the country. As the demand increases, the absence of a strong infrastructure will become a visible range and will need to focus on both public and private players.
Second-generation ethanol, made from non-food biomass like crop residues, offers a sustainable alternative. It can reduce pressure on food crops and enable a more stable supply. Technological advancement in this area will play a key role in future market growth.
Growing interest from global investors and increased foreign direct investment are expected to boost innovation and scale. With strong policy support and strategic planning, India can overcome current barriers. Ethanol will become a cornerstone of Indias clean energy and fossil fuel reduction goals.
MARKET SEGMENTATION
Indias ethanol market is divided into bioethanol and synthetic ethanol, with bioethanol leading at $1,917.6 million. Derived from renewable sources like sugarcane and agricultural waste, bioethanol is favored for its low emissions and reduced crude oil dependency. Synthetic ethanol, made from petroleum-based materials, remains less preferred due to environmental concerns but contributes to overall supply.
Indias ethanol demand is set to rise with government initiatives promoting cleaner fuel and energy security through ethanol-petrol blending. This creates growth opportunities for bioethanol producers, aligning with sustainability goals. Bioethanol also supports agriculture by using renewable resources and boosting farmer incomes.
Synthetic ethanol production will persist but face challenges due to stricter environmental regulations and higher energy use. As bioethanol gains acceptance and becomes more cost-effective, synthetic ethanols market share may decline. Still, it remains relevant where bioethanol supply is insufficient.
The Indian ethanol market will expand round molasses-primarily based and grain-based totally production. Molasses will keep its lead because of its near link with sugarcane farming, whilst grain-based ethanol will upward push as a complementary source. Government guide and converting demand styles will encourage increase in each segments, helping India give a boost to its role in the ethanol industry.
Indias ethanol market operates through three key distribution channels: Direct Sales, Distributors, and Wholesalers. Direct Sales enable large buyers like fuel blenders and pharmaceutical firms to purchase directly from producers for better cost and supply control. Distributors act as intermediaries, helping producers reach a broader market while managing inventory and logistics. Wholesalers cater to smaller industries and remote areas by breaking down bulk quantities into manageable sizes. As demand rises, these channels will evolve to ensure efficient and widespread ethanol availability across the country.
Forecast Period |
2025-2032 |
Market Size in 2025 |
$4,842.8 Million |
Market Size by 2032 |
$20,892.5 Million |
Growth Rate from 2025 to 2032 |
13.2% |
Base Year |
2024 |
Regions Covered |
North America, Europe, Asia-Pacific, South America, Middle East & Africa |
Ethanol is also widely used in food processing, beverages, chemicals, cosmetics, and pharmaceuticals, with demand rising due to increased consumer spending and industrial growth. As awareness of hygiene and clean-label products grows, ethanols role in personal care and exports will also strengthen. Overall, the market will continue to evolve in line with environmental, economic, and policy trends.
India is set to significantly increase its ethanol production capacity, targeting an annual output of approximately 1,050 crore liters by the Ethanol Supply Year (ESY) 2025. This ambitious plan is built on a dual strategy that utilizes both grain and sugarcane as feedstocks. Grain-based ethanol production is projected to nearly double, rising from 380 crore liters to around 700 crore liters by the following season. Sugarcane processing will complement this increase, contributing to the remaining supply needed to meet the governments 20% ethanol blending target in petrol. This strategy also aims to efficiently manage sugar inventories, particularly in light of the anticipated high carry-over stocks due to regulatory restrictions on ethanol production and sugar exports. The government plays a crucial role by carefully regulating sugarcane allocation for ethanol production based on projected sugar demand-supply balances. This approach helps maintain market stability and ensures timely payments to sugarcane farmers, thereby supporting both the ethanol industry and agricultural stakeholders. (Source: https://www.metastatinsight.com/, https://energy.economictimes.indiatimes.com/ )
Government measures to increase Ethanol Blending
The National Policy on Biofuels 2018, as amended in 2022, inter-alia advanced the target of 20% blending of ethanol in petrol to Ethanol Supply Year (ESY) 2025-26 from 2030. Public Sector Oil Marketing Companies (OMCs) achieved the target of 10% ethanol blending in petrol in June 2022 i.e. five months ahead of the target during ESY 2021-22. Blending of ethanol further increased to 12.06% in ESY 2022-23, 14.60% in ESY 2023-24 and 17.98% in ESY 2024-25 upto 28th February 2025. So far, no decision has been taken by the Government for increasing ethanol blending beyond 20%.
According to the Roadmap for Ethanol Blending in India 2020 25, prepared by an inter-ministerial committee, the use of 20% ethanol-blended petrol (E20) results in a marginal reduction in fuel efficiency for four-wheelers originally designed for E10 and calibrated for E20. The Society of Indian Automobile Manufacturers (SIAM) informed the committee that this efficiency loss can be minimized through appropriate modifications in engine hardware and tuning. Furthermore, the committees findings indicated that no significant issues were observed in terms of vehicle performance, engine component wear, or engine oil degradation when operating with E20 fuel.
The National Policy on Biofuels allows the use of food grains for ethanol production during surplus periods, as declared by the National Biofuel Coordination Committee. It encourages a wide range of feedstocks, including sugarcane juice, maize, damaged food grains, and agricultural residues. The choice of feedstock varies yearly based on availability, cost, feasibility, and policy support. Diversion of key crops like sugarcane and maize for ethanol is regulated through stakeholder consultations to ensure balance and sustainability.
Since 2014, the Government has implemented multiple measures to boost ethanol production under the EBP Programme, including expanding feedstock options, introducing an administered pricing mechanism, and reducing GST on ethanol to 5%. Key policy reforms also include simplifying procurement by OMCs, facilitating ethanol movement through legal amendments, and advancing the 20% blending target to ESY 2025 26. Additionally, Ethanol Interest Subvention Schemes (2018 22) supported new ethanol plants, with Long Term Offtake Agreements signed between OMCs and Dedicated Ethanol Plants.
(Source: https://www.pib.gov.in/ )
Ethanol Price by Feedstock for ESY 2022/23, 2023/24 and 2024/25 (INR per Liter)
FEEDSTOCK |
ESY 2022/23 | ESY 2023/24 | ESY 2024/25 | |
Sugarcane Juice/Sugar Syrup/Sugar |
65.61 | 65.61 | 65.61 | |
B-Heavy Molasses |
60.73 | 60.73 | 60.73 | |
C-Heavy Molasses |
49.41 | 56.28 | 57.97 | |
Damaged Food Grains/Maize |
55.54 | 64 | 64 | |
Corn |
- | 66 | 71.86 | |
Surplus Rice (from Food Corporation of India) |
58.50 | 58.50 | 58.50 |
(Source: United States Department of Agriculture, Foreign Agriculture Service)
INDIAN CO-GENERATION SECTOR OVERVIEW
India has set ambitious energy transition goals, aiming to achieve fifty percent of its cumulative electric power capacity from non-fossil fuel-based sources by 2030 and attain net-zero emissions by 2070. To realise these targets and strengthen energy self-reliance, the optimal use of domestically available renewable alternatives is essential. Among these, modern bioenergy stands out due to its potential to utilise the countrys abundant biomass and waste resources effectively.
Modern bioenergy offers multiple social and environmental advantages alongside clean fuel generation, including pollution mitigation, job creation, and reduced energy imports. It supports decentralised energy solutions, benefits private industry through decarbonisation, and contributes to savings on fertiliser subsidies and waste management. Recognising these benefits, the Ministry of New and Renewable Energy (MNRE) launched the National Bioenergy Programme (Phase-I) from April 1, 2021, to March 31, 2026, with an outlay of 858 crore.
The Ministry of New and Renewable Energy (MNRE) has been actively implementing programmes to promote Biomass Power and Bagasse Cogeneration in India since the 1990s. In May 2018, the Biomass-based Cogeneration Programme was launched with the primary objective of encouraging the efficient utilisation of biomass resources through cogeneration technologies, particularly in sugar mills and other biomass-intensive industries such as rice and paper mills. (Source: Ministry of New and Renewable Energy)
FINANCIAL PERFORMANCE (Rs. in Lakhs)
PARTICULARS |
2024-25 | 2023-24 |
Revenue from Operations |
171279.02 | 159262.59 |
Other Income |
3377.08 | 1789.92 |
Total Revenue |
174656.10 | 161052.51 |
EBITDA |
10482.76 | 10067.95 |
EBITDA/ Sales (%) |
6.12 | 6.32 |
Profit before tax |
4411.12 | 3697.69 |
Tax Expenses |
972.83 | 900.96 |
Profit after tax |
3438.29 | 2796.73 |
OPERATIONAL PERFORMANCE
Sugarcane and Sugar Beet crushed and sugar produced across all units
Sugarcane |
Sugar Beet |
|||
Particulars |
||||
| 2024-25 | 2023-24 | 2024-25 | 2023-24 | |
Crushing (lakh quintal) |
158.86 | 185.43 | 16.44 | 21.07 |
Recovery % (Net) |
9.33 | 10.19 | 7.49 | 8.70 |
Production (lakh quintal) |
14.82 | 18.90 | 1.23 | 1.83 |
Cane crushing as well as recovery was impacted due to climate factors as well as “Red Rot” disease which led to lower yield.
Performance of cogeneration division- Metrics of power sold:
2024-25 |
2023-24 | |||
Unit |
||||
| Power sold (Lakh units) | Amount (Rs. /Lakh) | Power sold (Lakh units) | Amount (Rs. /Lakh) | |
Punjab |
228.64 | 1743.56 | 265.69 | 1951.19 |
Uttar Pradesh |
241.56 | 870.57 | 361.16 | 1303.68 |
Total |
470.20 | 2614.13 | 626.85 | 3254.87 |
The Power Sale in the U.P. decreased by 10.64% on account of Company decided to sell the surplus bagasse after the close of crushing operations instead of consuming the same for power generation as generating power was not viable. The Power Export in Punjab also decreased by 33.22% because the Company became self-reliant in fuel by saving on steam consumption in the process leading to surplus fuel for extended crushing season for Sugar Beet. Due to this the Company saved on external fuel cost.
Performance of Distillery:
Production* (Lakh BL) |
Sales*(Lakh BL) |
Revenue** (Rs. In Lakh) |
|||||
Area of Operation |
|||||||
| 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | ||
Punjab |
599.09 | 570.13 | 587.73 | 564.32 | 54150.07 | 40388.48 | |
Uttar Pradesh |
303.73 | 202.96 | 314.56 | 197.72 | 29810.39 | 16422.90 | |
| Total | 902.82 | 773.09 | 902.29 | 762.04 | 83960.46 | 56811.38 | |
* Does not include products other than spirit/ Ethanol. ** Including Sale of all products with inter segment transfers.
During the Financial Year 2024-25, the distillery segment recorded a significant increase in both production and sales, with total production rising to 902.82 lakhs BL (Bulk Litre) from 773.09 lakhs BL (Bulk Litre) in previous Financial Year 2023-24. This growth resulted in a substantial increase in total revenue to Rs. 83,960.46 lakhs from Rs. 56,811.38 lakhs in the previous Financial Year, primarily driven by higher volumes in both Punjab and Uttar Pradesh.
SEGMENTED EBITDA CONTRIBUTION
Segment |
EBITDA contribution in 2024-25 (%) | EBITDA contribution in 2023-24 (%) | |
Sugar |
77.35 | 50.40 | |
Distillery |
7.81 | 25.34 | |
Power |
14.84 | 24.27 | |
| Total | 100.00 | 100.00 |
Accounting policies
The financial statements of the Company have been prepared in compliance with the requirements Section 129 of the Companies Act, 2013 read with the Indian Accounting Standards (IND-AS) issued by the Ministry of Corporate Affairs. The accounting policies followed by the Company form an integral part of the annual report.
Disclosure of Accounting Treatment
In the preparation of financial statements, the company has followed the applicable Accounting standards issued by the Institute of Chartered Accountants of India. The Board has also affirmed that the Annual Accounts have been prepared as per applicable Accounting Standards and Policies and that sufficient care has been taken for maintaining adequate accounting records.
Rana Sugars Limited has 3 manufacturing 2023-24 2024-25 facilities with an aggregate cane crushing Revenues earned (Rs. crore) Revenues earned (Rs. crore) capacity of 20,500 tonnes per day. The group has 1090.41 910.69 geographically diverse sugar manufacturing facilities with one unit each in Moradabad & EBITDA earned (Rs. crore) EBITDA earned (Rs. crore) Rampur districts of Uttar Pradesh and one unit 50.73 81.09 in Amritsar district of Punjab. The sugar units of the Company are FSSAI certified and supplies Total production (lakh quintals) Total production (lakh quintals) good quality crystal sugar to a diverse customer
18.90 14.82 base.
Over the years, Rana Sugars Limited has invested in various initiatives to improve cane Recovery rate (%) Recovery rate (%) yield, enhance recovery and optimize costs. 10.19 9.33 These initiatives comprise of tight cane inventory management, engagement with Contribution to total revenues (%) Contribution to total revenues (%) farmers through seminars and the increased use 57.42 46.82 of technology in cane supply chain. The initiatives have played a large role in improving Crushing Capacity (TCD) Crushing Capacity (TCD) process transparency. 20500 (Sugar) 20500 (Sugar) 5000 (Sugar Beet) 5000 (Sugar Beet) The Company pioneered manufacturing of sugar from sugar beet in India. It has set up Indias only sugar beet processing facility at the Amritsar. Over the years, the Company has been making efforts to increase area under sugar beet by educating farmers and assuring them of offtake of the crop with enhanced revenue over other crops.
The recovery during the year was moderate as compared to PY though. Across U.P., there has been a decrease in sugarcane yields and sugar recovery, largely attributable to climatic factors/ unseasonal high rains, flooding in certain areas, and high ambient temperatures & heat wave, which impacted the recoveries. In some regions, the crop has been infested with red rot (in some units), top and root borers. This resulted in lower sugarcane yields and availability. Despite such challenges, the Company managed to perform well in SS 2024-25, with its reduction in crush and recovery lower than the average for the State. The Company strives to achieve its manufacturing facilities optimally to achieve tandem in Cost & economy which paves the way for better margins. Over the years, Companys focused sugarcane development programme, with almost 100% high-yielding and high-sugared variety sugarcane, has helped the farmers achieve higher returns as a result of enhanced farm productivity. Sugar Beet crushing of 16.44 Lakh Qtls (PY 21.07 Lakh Qtls) with total Sugar Beet and cane crushing of 158.86 Lakhs Qtls (PY 206.50 Lakhs Qtls) in the FY 2024-25.
Challenges and responses
Excessive dependence on single variety. The company and the industry needs to reduce its dependence on CO 0238 variety. In case of failure of the variety for any reason, large scale substitution with another variety will be a challenge. Climate factors, high or rising cane cost, policy driven constraints such as quota allocation leading to challenges in inventory holding and working capital pressure. Your company is trying to propagate other early varieties to mitigate this challenge. Above variety is also prone to attack of red-rot pest. Your company is taking all precautionary measures and educating farmers on dealing with this disease. Your company is also introducing CO 118 variety as a substitute to CO 0238 variety. Recovery of the company is closer to the saturation level. Company is not only enhancing plant efficiencies but also working on incubation & development of other high recovery yielding varieties.
Future Roadmap
Governments positive interventions in propelling the sugar sector bode well for the Company. The company will engage deeper with farmers, operate plants at optimal capacity and strengthen its financial performance. The company will also introduce high sugar yielding varieties released by various sugarcane breeding institutes in the country. With increased focus on ethanol, contribution from sugar segment will moderate in the times to come. This will help the company beat the cyclical nature of business that the sugar industry has traditionally been associated with.
DISTILLERY OVERVIEW
Being a less cyclical segment, distillation has been booster to companys financial strength. Rana Sugars Limited has total distillation capacity of 335 KLPD as at end of FY 24-25. The modifications/modernization carried out by the company during previous year reaped benefits during financial year 2024-25 and company was able to operate with better efficiency though margins remained stressed due to volatility in raw material prices Our pullulating growth in the Ethanol business is powered by our focus on being an active partner in Indias self-reliance journey, and is driven by our passion for premium quality production at all our manufacturing facilities. The distillery plant at Punjab also has the flexibility to also produce Extra Neutral Alcohol (ENA). Our Ethanol plants are capable of being operated on molasses/ sugarcane juice/ syrup and grains.
2023-24 |
2024-25 |
Revenues earned (Rs. crore) |
Revenues earned (Rs. crore) |
593.60 |
839.60 |
EBITDA earned (Rs. crore) |
EBITDA earned (Rs. crore) |
25.50 |
08.18 |
Spirit/ Ethanol sold (lakh |
Spirit/ Ethanol sold (lakh Bulk |
Bulk litres) |
litres) |
704.88 |
902.29 |
Contribution to total revenues |
Contribution to total revenues |
(%) |
(%) |
31.26 |
43.17 |
As an environmentally conscious and responsible corporate, we follow the highest standards in Environment, Health and Safety (EHS), with stringent compliance to environmental and pollution norms. We have set up concentrated spent wash (termed as SLOP) fired incineration boilers as per requirement in line with the Indian Governments directives and guidelines for effluent treatment. While distillation segment has better margin, it is affected by the volatility in the raw material prices especially grains and government policies about supply of FCI rice. RSL countered this with efficient procurement of raw material in alignment with the crop cycle.
POWER SEGMENT OVERVIEW
Companys co-generation business is a part of integrated business model for sugar units. It generates renewal energy by efficiently converting the bagasse in the renewable energy. The company also has captive power plants for its distillery business which consumes biomass to generate green power. Thus power requirement is captively ensured along with generation of revenue.
2023-24 |
2024-25 |
Revenues earned (Rs. crore) |
Revenues earned (Rs. crore) |
214.98 |
194.71 |
EBITDA earned (Rs. crore) |
EBITDA earned (Rs. crore) |
24.43 |
15.56 |
Total production (lakh units) |
Total production (lakh units) |
1557.23 |
1308.97 |
Contribution to total revenues (%) |
Contribution to total revenues (%) |
11.32 |
10.01 |
Challenges & Mitigation
Cogeneration is subject to seasonal operation due to the limited availability of bagasse and varying state-wise regulatory tariffs, which constrain scalability and link revenues to State Utilities. To mitigate these challenges, the Company enhances internal energy efficiency, minimises grid dependency, and strategically maximises power exports during peak seasons. With plants located in Uttar Pradesh and Punjab, Company benefits from geographic diversification, enabling more stable tariff realisations. This ensures that the cogeneration segment consistently delivers cost-efficient and sustainable value across business cycles.
SOURCES OF FUNDS i. Net worth
As of 31st March 2024, the companys net worth stood at Rs. 540.46 crore and increased to Rs. 576.27 crore as of 31st March 2025, reflecting an absolute rise of Rs. 35.81 crore, or 6.63%. This growth was driven by internal accruals, as the equity share capital remained unchanged at Rs. 153.54 crore, comprising 15.35 crore equity shares of Rs. 10 each. ii. Long term debt
The Companys long-term borrowings increased from Rs. 128.39 crore in FY24 to Rs. 129.54 crore as on 31st March 2025, resulting in an increase of Rs. 1.15 crore. The long-term debt-to-equity ratio stood at 0.23 times in FY25 indicating strength of the balance sheet. iii. Finance cost
The Company experienced an increased finance cost during the year and its interest coverage ratio has been increased from 3.55 times in FY24 to 4.22 times in FY25, reflecting continued comfort in debt servicing despite a higher interest outgo.
APPLICATION OF FUNDS i. Fixed assets
Gross fixed assets rose from Rs. 893.62 crore in FY24 to Rs. 908.84 crore in FY25, primarily for achieving efficiencies in the process of both sugar and distillation segments.
WORKING CAPITAL MANAGEMENT i. Current assets
Current assets have increased from Rs. 862.49 crore in FY24 to Rs. 892.32 crore at the end of FY25. The current ratio moved from 1.07 to 1.12, indicates a modest improvement in the companys short-term liquidity position. ii. Inventories
Inventories, which include raw materials, work-in-progress, and finished goods, declined from Rs. 592.15 crore in FY24 to Rs. 570.52 crore in FY25, representing a decline of Rs. 21.63 crore or 3.65%. iii. Cash and bank balances
Cash and Bank Balances stood at Rs. 31.79 crore at the end of FY24 and increased to Rs. 54.03 crore in FY25. This indicates the sound liquidity maintained by the organization.
DETAILS OF CHANGES IN KEY FINANCIAL RATIOS
PARTICULARS |
2025 | 2024 | CHANGE |
Debtors turnover ratio |
11.24 | 11.92 | -5.70% |
Inventory turnover ratio |
2.95 | 2.71 | 8.86% |
Interest coverage ratio |
4.22 | 3.55 | 18.87% |
Current ratio |
1.12 | 1.07 | 4.67% |
Debt equity ratio |
0.23 | 0.24 | -4.17% |
Operating Profit Margin (%) |
6.12 | 6.32 | -3.16% |
Net profit margin (%) |
2.01 | 1.76 | 14.20% |
Return on Net worth (%) |
6.16 | 5.31 | 16.01% |
OUR BUSINESS DIVISIONS AND RISK PROBABILITY
DIVISIONS |
RISK PROBABILITIES | REASONS |
Sugar |
High-moderate | Competitive and Regulated market |
Distillery |
Moderate-low | Government Support and Subsidies |
Power |
High-moderate | Regulated market & Sole buyer addressed |
Our Enterprise Risk Management (ERM) function enables the achievement of the Companys strategic objectives by identifying, analyzing, assessing, mitigating, monitoring and governing any risk or potential threat to these objectives. While this is the key driver, our values, culture and commitment to stakeholders employees, customers, investors, regulatory bodies, partners and the community around us are the foundation for our ERM framework.
TYPE OF RISKS INVOLVED
Regulated Market: Sugarcane pricing, export policy, monthly sales quota, Ethanol Pricing, State Liquor Prices are all regulated by the Government and are outside the control of the Company which makes the Sugar Business vulnerable to external factors. Mitigation: These risks are external to the Company and uncontrollable, hence may impact the profitability. The Government has been taking rational policy decisions balancing the interests of all the stakeholders, which has substantially helped the sugar industry. The government is expected to increase MSP of Sugar as well as prices of Ethanol due to corresponding rise in the prices of the cane to mitigate the impact of increase in Sugarcane prices on Sugar Industry. Further, the Company always stresses on improvement of recoveries as these lead to low cost of production of sugar and enables the sugar mills to beat market variation in sugar prices and make the sugar operation viable. The recoveries of our Company have consistently been improving over the last few years. Climate/ Crop Disease: Monsoon, flood, drought and crop diseases impact the yield and sugar recovery from cane. Mitigation: The impact of climatic factors is moderate in Uttar Pradesh, though during last year due to disease the yield was affected. However, the cane staff of the Company pro-actively monitors the growth of sugarcane and disease infestation, so that timely action could be taken to avoid or minimize the damage. Further, the Company is focusing on better yield variety to overcome this risk. Farmer relationships risk: Disturbed relationships with farmers could affect procurement quantum and quality. Mitigation: The Company remunerates farmers fairly and timely. The Company undertakes proactive measures to educate farmers and provides seeds and insecticides at subsidized rates, laying the foundation for enduring farmer relationships. Demand-supply risk: Rising sugar inventories could threaten sugar prices and affect realizations. Mitigation: Rana sugars focus lies in servicing customers with superior quality lab-tested sugar. Owing to a consistent product quality and superior inventory management, the Company reported consistent demand through the year. Further GOI policy initiative to allow usage of syrup & B-HM for manufacturing of Ethanol and export policy of the Government has helped in stabilizing the surplus inventory levels. Working capital risk: In an industry marked by high inventory, optimal capital availability is necessary. Mitigation: Rana sugar operates in a volatile sugar segment, complemented by ethanol and cogeneration divisions. Quota regulated sales and rising cane prices leads to enhanced WC requirements. Adequate working capital is required to make timely cane price payment and to maintain inventories. Further, it is imperative to keep cost of funds in check to rationalise finance costs. The ethanol and co-generation segments help the Company manage liquidity to certain extent.
Internal control systems and their adequacy
The Company is responsible for the identification of material sustainability topics, establishing and maintaining appropriate performance management and internal control systems, and derivation of performance data reported. The Company possesses a robust internal control system to review performance, track operations and gauge liquidity.
Human Resource Management
The Rana Sugars Limited comprises 1085 full-time permanent employees and their dependents besides seasonal employees. Our professionals are our most important assets. We are committed to hiring and retaining the best talent. For this, we focus on promoting a collaborative, transparent and participative organization culture, and rewarding merit and sustained high performance. Our human resource management focuses on allowing our employees to develop their skills, grow in their career and navigate their next. The Human resource department of the Company focuses on establishing healthy linkages to continuous improvement in productivity, quality, cost competitiveness and efficiency. They also carry out continuous improvements in all areas of work to increase competitiveness and retain customer focus.
Empowering and motivating the employees to do their best through decentralized operations, providing opportunities of employment for all irrespective of caste, religion, region or any other criteria, Rewards and recognition based on meritocracy and achievement of pre-stated targets are a continuous process in the Organization.
CAUTIONARY STATEMENT
The statements in the management discussion and analysis section with regard to projections, estimates and expectations have been made in good faith. The achievement of results is subject to risks, uncertainties and even less than accurate assumptions. Market data and information are gathered from various published and unpublished reports. Their accuracy, reliability and completeness cannot be assured.
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