EID Parry — Q4 FY25 earnings call

Call held 28 May 2025

Management summary

EID Parry faced a challenging Q4 FY25, primarily due to a massive impairment in its refinery business and stagnant domestic sugar pricing despite rising input costs (FRP). While the distillery and consumer products segments showed growth, the core sugar business was hampered by lower release quotas and a lack of ethanol price hikes. Management is focusing on a portfolio shift toward refined sugar and branded consumer goods to mitigate regulatory and commodity price pressures.

Highlights

  • Consolidated EBITDA for Q4 turned to a loss of ₹38.12 crores vs a profit of ₹56.21 crores YoY.

  • Refinery business reported a significant loss of ₹99 crores for the quarter on revenue of ₹1,019 crores.

  • Distillery segment revenue grew 19.6% YoY to ₹268 crores, driven by higher volumes and better realizations.

  • Consumer Products Group (CPG) achieved revenue of ₹195 crores, with non-sweetener staples contributing ₹65 crores.

  • Sugar operations revenue declined 2% YoY to ₹408 crores due to reduced release quotas.

  • Exceptional item: Recognized an impairment of ₹427 crores in the refinery subsidiary (Parry Sugar Refinery India).

  • Cane crushing volume dropped to 17.4 lakh MT from 19.79 lakh MT YoY, though recoveries improved to 10.8%.

Concerns

  • Ethanol Pricing Stagnation

  • Refinery White Premium Volatility

Key financials

  1. EBITDA ₹-38.12 Cr -167.8%YoY
  2. PBIT (Before Exception) ₹49.3 Cr +8.3%YoY
  3. PBT ₹-99 Cr -1,000%YoY
  4. Sugar Average Selling Price ₹39.37 +4.9%YoY

What they filed

Q1 FY27: revenue down 3.6%, net profit down 217.9% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue755 848 814 760 754 −0%770 −9%846 +4%733 −4%
EBITDA-41 -34 88 -31 -50 −22%-41 −21%72 −18%-48 −55%
Net profit28 -146 -232 -28 -286 −1121%-54 +63%-340 −47%-89 −218%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of Revenue
₹1,890 Cr Total
  • Refinery Business ₹1,019 Cr 53.9%
  • Sugar Operations ₹408 Cr 21.6%
  • Distillery ₹268 Cr 14.2%
  • Consumer Products Group ₹195 Cr 10.3%

Guidance & targets

Capacity

  • Distillery Capacity Utilization Capacity · FY26 · High confidence 90% to 95%

    From 90% today

    So 90% to 95% is the kind of capacity utilization we are looking at.

    — Abdul Hakeem Ashiq, COO - Sugar & Bio Fuel

  • Grain Ethanol Production (AP Facility) Capacity · FY26 · Medium confidence 3.5 to 4 crore liters
    we have only 1 facility in AP, where about 3.5 to 4 crores liters we can produce.

    — Y. Venkateshwarlu, CFO

Volume

  • Branded Packaged Food Growth Volume · Annual · Medium confidence >12%
    Branded packaged food business in India is growing at about 12% annually. We will be trying to beat that estimate in terms of our growth rates.

    — Balaji Prakash, COO & Business Head - CPG

Profitability

  • Minimum Selling Price (MSP) Requirement Profitability · FY26 · Low confidence early 40s

    From 37-38 today

    I would say something into the early 40s would only be near meaningful.

    — Muthiah Murugappan, Whole Time Director

Risks & concerns

  • Ethanol Pricing Stagnation

    high

    Molasses-based ethanol prices haven't increased in nearly 3 years despite consistent FRP hikes (8% last year).

    Management acknowledged

  • Refinery White Premium Volatility

    high

    Drastic fall in white sugar premiums due to increased supply from EU, Ukraine, and Pakistan led to a ₹99 crore loss in the refinery segment.

    Management acknowledged

  • US Ethanol Imports

    medium

    Potential lifting of curbs on US ethanol imports could negatively impact domestic industry economics as US prices are significantly lower.

    Both acknowledged

  • Sugar Price Deflation

    medium

    Higher expected production in the upcoming season could further depress sugar prices if export programs are not initiated.

    Both acknowledged

Areas of evasion (2)

  • Specific crushing numbers for FY26
  • Specific new product pipeline for CPG

Q&A highlights

2 direct
Refinery Impairment vs. Capital Infusion Direct
The impairment has been done on account of poor financial performance... In terms of the infusion, it is to strengthen the net worth of the company and also bring about some debt reduction.

Clarifies why the company is writing off ₹427 crores while simultaneously injecting ₹350 crores into the same struggling subsidiary.

Asked by Yash Visharia, Mavira Asset Management

Sugar Business Viability and MSP Direct
Sugar, unfortunately, has remained very range bound and the sort of window shortens between the FRP increase and the price... I would say something into the early 40s would only be near meaningful.

Highlights the critical disconnect between government-mandated input costs (FRP) and capped output prices (MSP), which is squeezing margins.

Asked by Manoj Shah, Lax Gov Investments

CPG Distribution vs. Revenue Growth Discrepancy Partial
The outlet increase is always higher than the revenue increase because the incremental new outlets don't contribute to revenue in the same proportion as the existing outlets.

Analyst challenged why distribution grew 10x but revenue only 3x; management's response suggests diminishing marginal returns on new outlet reach.

Asked by Rushabh, RBSA Investment Managers

2 min read 5 chapters

Detailed narrative

Refinery Segment Crisis and Impairment

The refinery business, operated through Parry Sugar Refinery India Private Limited, faced a severe downturn in Q4 FY25. Revenue grew to ₹1,019 crores, but the segment reported a loss of ₹99 crores compared to a ₹9 crore loss in the previous year. This was driven by a collapse in white sugar premiums due to global oversupply from the EU and Ukraine. Consequently, management recognized a massive impairment of ₹427 crores based on lower projected future cash flows. To stabilize the subsidiary, EID Parry is infusing ₹350 crores for debt reduction and net worth strengthening.

Distillery Growth Amidst Pricing Headwinds

The distillery segment remains a bright spot, with revenue increasing to ₹268 crores from ₹224 crores YoY. Sales volumes rose to 3.89 crore liters, with ethanol realizations improving slightly to ₹66.98/liter. However, management expressed deep concern over the three-year stagnation in molasses-based ethanol prices while Fair and Remunerative Price (FRP) for cane rose by 8% last year. The company is operating at 90% plus capacity utilization and expects to maintain 90-95% in FY26, leveraging its multi-feed facility in Andhra Pradesh for grain-based ethanol.

Consumer Products Group (CPG) Expansion

The CPG division achieved ₹195 crores in revenue, with a strategic focus on diversifying beyond sugar into conventional staples (non-sweeteners), which contributed ₹65 crores. While distribution reach has expanded 10x over four years, revenue has only tripled, indicating a focus on deepening penetration in existing outlets. Management aims to beat the 12% industry growth rate for branded packaged foods and is currently focused on the South Indian market before considering pan-India expansion.

Sugar Operations and Regulatory Squeeze

Sugar operations saw a 2% revenue decline to ₹408 crores, primarily due to lower government release quotas. Although average selling prices improved to ₹39.37/kg, cane costs rose to ₹3,768 per MT (up from ₹3,504). Management emphasized that the Minimum Selling Price (MSP) needs to reach the 'early 40s' to make the business truly viable. Crushing volumes were lower at 17.4 lakh MT, but gross recoveries improved to 10.8%, providing some operational efficiency offset.

Global and Domestic Sugar Outlook

The global sugar market is expected to remain tight with a projected deficit of 3.9 million tons in '24-'25. Domestically, India's production is estimated at 30.3 million metric tons. Management anticipates a 'positive delta' in crush for the upcoming season due to good monsoons and planting numbers in key states. However, they warned that higher production without an export program or ethanol price hikes could lead to a downward slide in domestic sugar prices, impacting future profitability.

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