Uttam Sugar Mills Ltd Q2FY26 – From Sweet Profits to Sour Margins: The Great Ethanol Hangover of the Sugar King

1. At a Glance

Welcome to the rollercoaster factory ofUttam Sugar Mills Ltd (BSE: 532729 | NSE: UTTAMSUGAR)— where every tonne of sugar crushed seems to also crush investor optimism. The company, currently trading at ₹228 per share (as of 24th Nov 2025), boasts amarket cap of ₹869 crore, aP/E of 7.72x, and aBook Value of ₹208. It’s cheap — like Diwali sweets after Bhai Dooj — but sweetness alone can’t fix profitability.

In Q2FY26, the company reportedrevenue of ₹581.5 crore(down 7.5% QoQ) and aPAT of just ₹0.99 crore(down 93% QoQ, and YoY growth of 107% — only because the base was hilariously low last year). TheOperating Profit Margin collapsed to 3.94%, reminding investors that in sugar, margins can melt faster than ice in Meerut summer.

Still, Uttam Sugar’s numbers are anything but boring. WithROCE at 11.2%,ROE at 11.9%, and aDebt-to-Equity ratio of 0.35, it’s trying to stay lean after a ₹116 crore capex binge and a new distillery acquisition spree. TheDividend yield of 1.09%feels like a consolation sweet from the accountant. But hey — at leastpromoters hold a sugary 74.4% stake, and none of it is pledged. That’s one less cavity to worry about.

2. Introduction

If India’s sugar sector were a Bollywood movie, Uttam Sugar would be the veteran supporting actor — reliable, underrated, and somehow always covered in sticky syrup. Incorporated in 1993, the company now straddles three verticals:Sugar, Distillery (Ethanol), and Power Generation.

Over the last few years, Uttam Sugar has tried to evolve from a traditional sugar roller mill into amulti-product agro-energy enterprise. But the problem with transformation stories in the sugar industry is that they usually end in one of two ways: either ethanol prices get capped by the government, or sugar prices crash due to monsoon drama. Either way, producers end up saying — “Yeh sab system ka fault hai.”

The company has beenon a capex trip— increasing itscrushing capacity to 26,200 TCD,distillery to 300 KLPD, andpower capacity to 122 MW. Meanwhile, it’s also swallowing smaller entities likeUttam Distilleries Ltd, which will soon churn out more grain-based ethanol than some states consume.

In FY25, the company clocked₹2,202 crore in revenueand₹110 crore in PAT, translating into anEPS of ₹29.53. Yet, the last six months have been a bit bitter — the stock fell-26.3% in 6 monthsand-17.5% in 1 year, showing that even in a sugar boom, investor patience can sour.

3. Business Model – WTF Do They Even Do?

At its core, Uttam Sugar is asugar manufacturer— it crushes sugarcane and produces everything fromrefined white sugartoliquid, brown, sulfur-free, icing, and pharma-grade sugars. Basically, if it’s sweet and crystalline, Uttam probably makes it.

The company hasfour major plants— Libberheri, Barkatpur, Shermau, and Khaikheri — spread across Uttar Pradesh, the heartland of sugar politics. Together, these plants crush26,200 tonnes of cane per day. That’s like squeezing an entire district’s sugarcane output before lunch.

But here’s where it gets interesting: Uttam Sugar isn’t just about sweetness anymore. Itsdistillery segment(now 300 KLPD) produces ethanol that’s sold to oil marketing companies (OMCs) under India’s ethanol blending programme. With the government pushing for20% ethanol blending, this vertical has become the darling of the balance sheet — contributing~15% of FY23 revenue.

Thepower segment, though smaller (~3% of revenue), uses bagasse (sugarcane waste) to generate electricity — partly for captive use and partly sold to the grid. It’s like recycling sugarcane twice — once for sweetness and once for sustainability.

In short, Uttam Sugar sells sweetness to your tea, ethanol to your car, and power to your state. The real question is: which one gives the best margin? Spoiler — not sugar.

4. Financials Overview

The story here is textbook sugar volatility: one quarter you’re drowning in cash, the