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    Sukhjit Starch

    SUKHJITS
    Fast Moving Consumer Goods·13 Nov 2025
    Management Summary

    Sukhjit Starch reported a challenging Q2 FY26 with revenue and net profit declines, primarily due to softening starch prices and a temporary demand pause post-GST rationalization. However, EBITDA showed a slight sequential improvement. Management highlighted softening maize prices, stable raw material availability, and anticipated a restart in Indian starch exports, expressing optimism for sequential improvement in operating performance in H2 FY26.

    Highlights

    5

    • EBITDA for Q2 FY26 showed a slight sequential improvement, reaching ₹20.05 crores compared to ₹19.89 crores in the previous quarter.

    • Maize prices, a key input cost, have started softening gradually, moving from ₹22-23 in Q1 to ₹19-20 currently, supported by better Kharif crop arrivals and government policies.

    • Management maintained healthy capacity utilization across all plants and managed inventory prudently.

    • The company expects sequential improvement in operating performance for H2 FY26, driven by stabilizing raw material environment and firm demand.

    • Indian starch exports are anticipated to restart and pick up in the medium term, with maize costs becoming competitive globally.

    Concerns

    4

    • Revenue from operations for Q2 FY26 declined by 14.84% QoQ to ₹312.68 crores from ₹367.20 crores in the previous quarter.

    • Net profit for Q2 FY26 decreased by 14.32% QoQ to ₹4.07 crores from ₹4.75 crores in the previous quarter.

    • H1 FY26 revenue from operations also saw a decline of 9.79% to ₹679.88 crores compared to ₹753.7 crores in the previous quarter.

    • Margins remained subdued in Q2, partly due to a pause in demand from trade during September following GST rationalization.

    Key financials

    Metrics

    6

    Periods

    2

    Q2 FY26

    3
    • Revenue from Operations
      ₹312.68 Cr
      QoQ-14.8%
    • EBITDA
      ₹20.05 Cr
      QoQ+0.8%
    • Net Profit
      ₹4.07 Cr
      QoQ-14.3%

    H1 FY26

    3
    • Revenue from Operations
      ₹679.88 Cr
      QoQ-9.8%
    • EBITDA
      ₹39.9 Cr
    • Net Profit
      ₹8.82 Cr

    Guidance & targets

    4
    CategoryTargetPriority
    Operating Performance
    Sequential Improvement
    Improvement
    		Medium
    Input Costs
    Maize Price Alignment
    In line with global pricing
    		Medium
    Exports
    Export Activity
    Start to pick up
    		Medium
    Profitability
    Margin Improvement
    Improvement
    		Medium

    Maize procurement price trend

    next quarter
    Current₹19-20 (down from ₹22-23 in Q1)
    TargetContinued softening or stability, aligning with global prices

    Why it matters

    Maize is a key input cost, and its price trend directly impacts the company's gross margins.

    Maize prices have started softening gradually through September end due to better arrivals from the Kharif crop and supportive government policies encouraging higher maize cultivation. This has helped in moderating our input costs.

    How to verify

    key_financials.metrics[label='Maize Procurement Price']

    Risks & concerns

    2
    RiskSeverity

    Weak market scenario and demand uncertainty due to GST rationalization

    A weak market scenario and uncertainty due to GST rationalization in September led to a pause in demand and strategic scaling down of production. — Management acknowledged

    medium

    Subdued margins despite lower raw material costs

    Margins remained subdued as maize price softening was recent, and demand was impacted by GST rationalization, leading to defensive sales to protect profitability. — Analyst acknowledged

    medium

    Q&A highlights

    8

    “The industry is at a pivot point and I think the competitiveness of Indian starch manufacturers exporting, I think it's restarted again. Maize cost in India is at a level which is equal to or equivalent to what our competitors in other countries would be getting at. So, I think that's a very good sign. And I think for the short term, we will start seeing export activity and it will build up in the medium term.”

    Highlights a potential positive shift in the industry dynamics and export opportunities for the company.

    asked by Saurav

    2 min read5 chapters

    Detailed Narrative

    01

    Q2 & H1 FY26 Financial Performance Overview

    Sukhjit Starch reported a revenue from operations of ₹312.68 crores for Q2 FY26, a decline from ₹367.20 crores in the previous quarter. EBITDA for the quarter stood at ₹20.05 crores, showing a slight increase from ₹19.89 crores QoQ. Net profit for Q2 FY26 was ₹4.07 crores, down from ₹4.75 crores. For the first half of FY26, revenue was ₹679.88 crores, with EBITDA at ₹39.9 crores and net profit at ₹8.82 crores.

    02

    Raw Material Environment and Input Costs

    Maize prices, a critical raw material, have started softening gradually since September end, moving from ₹22-23 per unit in Q1 to ₹19-20 currently. This softening is attributed to better arrivals from the Kharif crop and supportive government policies encouraging higher maize cultivation, with a crop size now touching 40 million tonnes. Freight costs are also reducing, contributing to moderated input costs. Management is hopeful that India's maize price trend will align with global pricing in the next couple of quarters.

    03

    Market Demand and Sector Trends

    The second quarter saw steady improvement in demand from sectors like food processing, paper, and textiles, while pharmaceutical and packaging segments continued to show resilience. However, a pause in demand from trade occurred during September due to uncertainty surrounding GST rationalization. Post-GST rationalization, FMCG demand is noted to be returning to a bullish cycle, indicating a broader market recovery.

    04

    Operational Strategy and Profitability

    Despite the revenue decline, the company maintained healthy capacity utilization across its plants and managed inventory prudently. Management stated they 'wilfully chose to scale down rather than produce' in a weak market scenario to protect profitability, avoiding a price war. Operational cost control is an ongoing process, with continuous efforts to improve yields and energy efficiency. The company is also actively onboarding new customers for higher-margin derivatives, though the approval cycle can range from 2 months to a year depending on client complexity.

    05

    Outlook and Strategic Initiatives

    Management expressed a constructive tone for H2 FY26, anticipating sequential improvement in operating performance as the raw material environment stabilizes and demand remains firm. They believe Indian starch exports are restarting and expect export activity to pick up in the medium term, driven by competitive maize costs. Increased capacity utilization across the industry, fueled by exports and demand, is expected to further contribute to margin improvement for Sukhjit Starch.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.