01 — At a Glance
The Company That Crushed Dreams Faster Than Sugarcane
- 52-Week High / Low₹29.6 / ₹14.8
- Q3 FY26 Revenue₹1,380 Cr
- Q3 FY26 PAT₹14.8 Cr
- TTM PAT-₹44 Cr
- Book Value / Share₹29.8
- Price to Book0.55x
- Total Debt₹3,313 Cr
- Contingent Liabilities (YTM)₹3,585 Cr
- Promoter Holding25% (100% Pledged)
- Credit RatingCARE D
The Setup: Bajaj Hindusthan is a 95-year-old company that makes sugar, ethanol, and power. Except they don’t make money anymore. Q3 PAT came in at ₹14.8 crore (decent), but TTM shows a loss of ₹44 crore. They defaulted on ₹268 crore of debentures on March 31, 2025. Their credit rating was downgraded to CARE D. Promoters have pledged 100% of their shares—which is Wall Street’s fancy way of saying “we’re betting our house on red.” In March 2026, shareholders approved a debt restructuring that includes ₹570 crore of new equity and ₹2,856 crore of convertible preference shares. The stock has returned -22% in one year. You could have made more money leaving it in a savings account.
02 — Introduction
The Bajaj That Nobody Talks About (And There’s A Very Good Reason)
Jamnalal Bajaj founded this company in 1931 under the name “The Hindustan Sugar Mills Limited.” For the first 50 years, it crushed sugarcane, made sugar, collected profits. For the next 40 years, it crushed even more sugarcane, made even more sugar. But somewhere around 2015, the math stopped working. Today, we have a company that crushes 11.32 million metric tonnes of sugarcane annually (FY25), owns 14 sugar mills, operates 6 distilleries, and runs 14 power generation plants—and still can’t figure out how to make consistent money. The stock trades at ₹16.4, down from a 52-week high of ₹29.6. It’s currently trading at 0.55x book value, which means the market values this company at barely half the value of its assets. That’s what happens when investors realize those assets are pledged as collateral and the company is drowning in convertible debentures with yield-to-maturity clauses that read like a debt-restructuring horror movie.
Here’s the timeline of destruction: The company issued Optionally Convertible Debentures (OCDs) with a ₹2.50% coupon rate back in December 2017. Sounds reasonable. But here’s the catch—the YTM (Yield to Maturity) premium accrues as a contingent liability. By December 31, 2024, this YTM reached ₹3,412 crore. Redemption starts March 31, 2025, in 13 equal annual instalments. The first instalment? ₹268 crore plus YTM premium. The company couldn’t pay it. So they defaulted. And then CARE Ratings downgraded them to “D”—not “BB-“, not “B+”, but “D”. The letter that means “default is imminent or has occurred.”
In February 2026, the board got together and decided: “Let’s convert this debt into equity and preference shares.” In March 2026, shareholders approved it. ₹570 crore new equity. ₹2,856 crore of convertible preference shares. Plus, the promoters committed to infusing ₹1,000 crore. Translation: the company is being rebuilt from the inside out, one shareholder meeting at a time.
Credit Rating Update (March 29, 2025): CARE Ratings downgraded Bajaj Hindusthan’s OCDs to CARE D from CARE B+; Negative. Reason? Expected default on OCD instalment and poor liquidity. The rating agency also noted that the company couldn’t secure lender approval for converting OCDs into equity. The word “default” appears 14 times in CARE’s rationale. Spoiler: they eventually got approval in March 2026.
03 — Business Model: The Good Ol’ Days When Sugar Was Profitable
They Make Sugar. They Make Ethanol. They Generate Power. And They Lose Money Doing It.
Let’s break down what Bajaj Hindusthan actually does. The company operates across three segments:
Sugar (77% of gross contribution in FY24): They crush sugarcane, extract sugar. Simple. In FY25, they crushed 11.32 MMT of sugarcane. Sugar recovery was 10.51%. For every 100 tonnes of sugarcane, they get roughly 10.5 tonnes of sugar. Sounds efficient? It’s actually below industry average. The commodity price of sugar in India is set by government policy—Minimum Support Price (MSP), Fair & Remunerative Price (FRP), State Advised Price (SAP). The government decides what farmers get. Farmers decide how much cane to grow. When prices fall, farmers grow less. When cane is scarce, mills run short. When mills run short, profit margins compress. The sugar business is like a three-body problem in physics—except all three bodies are controlled by politicians.
Distillery (10% of gross contribution in FY24): They convert B-heavy molasses into ethanol. This is actually where some margin hides. In FY25, they produced 107,757 KL of ethanol. Government has mandated 5-10% ethanol blending in petrol. Demand is structural. But margins are still being compressed by competing distilleries and the fact that molasses prices are linked to sugar prices. If sugar prices fall, molasses prices fall, but ethanol prices don’t fall as fast. Actually, they do. Economics is cruel.
Power (11% of gross contribution in FY24): They own 14 co-generation plants with 449 MW capacity. They consume part of the power internally (bagasse cogeneration is efficient), and sell the surplus to the UP state grid. In FY25, they generated 621.99 million units. Revenue per unit is ~₹4-5 (state grid rates vary). Decent margin, but again—no competitive moat. Any sugar mill can set up cogeneration.
Sugar Revenue %77%FY24 mix
Distillery Revenue %10%FY24 mix
Power Revenue %11%FY24 mix
Sugarcane Crushed (FY25)11.32 MMTvs 12.81 MMT in FY24
The real issue: this business is cyclical, regulated, and commodity-driven. When global sugar prices collapse (which they do every 5-7 years), Indian prices follow because of trade dynamics. When ethanol demand drops, utilization falls. The company is like a ship with a good crew, but sailing in an ocean where waves are controlled by government policy, commodity prices, and farmer behavior. No captain can fix that.
04 — Financials Overview: The Numbers Go Splat
Q3 FY26: A Quarterly Profit Amid A Nine-Month Loss Party
