Mawana Sugars FY26: Revenue Hits ₹1,571 Cr While Profit Drops 66% — The Cane Crushes Back

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1. At a Glance

Mawana Sugars closed FY26 with revenue of ₹1,570.94 crore — its highest in the data set, up 8.6% from ₹1,446.49 crore in FY25. On paper, that sounds like progress. But net profit collapsed 66%, from ₹109.42 crore in FY25 to ₹37.09 crore in FY26, and the operating margin retreated from 8.4% to 6.7%.

The FY25 profit number deserves an asterisk: it included ₹61.28 crore of exceptional gains from the sale of two real-estate subsidiaries (Siel IE and Siel IED). Strip those out and the FY25 base PAT was closer to ₹48 crore — making the FY26 fall less catastrophic but still real. Operating profit before exceptional items dropped from ₹68.08 crore to ₹55.31 crore.

Three numbers worth flagging: the market pays 11.1x earnings on a ₹413 crore company with ₹420 crore in borrowings and ₹803 crore of inventory. A company whose balance sheet is largely warehouse space for sugar waiting for a government quota release is a specific kind of financial architecture — one where the cash conversion cycle (214 days per the data) does a lot of heavy lifting, often against the company.

On the positive side, cane dues were cleared within the stipulated period for FY26, per the Directors’ Report, and the 62nd AGM on July 4, 2026 has a ₹4-per-share final dividend on the agenda. The board is running tidily enough. Whether the margins can sustain that tidiness is the open question.

2. Introduction

Mawana Sugars Limited (MSL) is a part of the Shriram Group and has been manufacturing and marketing sugar, ethanol, and co-generated power for more than 60 years, per the CARE rating report. The company operates two integrated sugar complexes in Meerut district, Uttar Pradesh — Mawana Sugar Works and Nanglamal Sugar Complex — making it very much a creature of Western UP agriculture, its politics, and its cane prices.

The company’s most significant structural event in recent memory was the divestment of its two real-estate subsidiaries — Siel Industrial Estate Limited and Siel Infrastructure and Estate Developers Private Limited — in October 2024 for ₹117 crore. The proceeds were used to reduce debt. Borrowings fell from ₹568 crore in March 2024 to ₹419 crore by March 2025, and held roughly steady at ₹420 crore in March 2026.

The second meaningful move was the acquisition of the remaining 66.26% stake in Mawana Foods Private Limited (MFPL) in December 2024, turning an associate into a wholly-owned subsidiary. MFPL contributed ₹43.23 crore in revenue during FY26 and ₹0.35 crore in profit — not needle-moving at the group level, but the NCLT amalgamation process, which received shareholder approval in February 2026, will eventually fold it in.

A third item announced in November 2025: the board approved the purchase of a commercial property in Gurugram’s Sector 32 for ₹28 crore from Usha International Limited, a related party, to establish a corporate office. An advance of ₹7 crore has been paid; the HSVP transfer permission is pending.

FY26 also introduced an exceptional charge of ₹5.52 crore related to the implementation of the four Labour Codes (effective November 21, 2025), reflecting revised gratuity and compensated-absence obligations.

3. Business Model: WTF Do They Even Do?

Mawana crushes sugarcane, extracts sugar, ferments the leftovers, and burns the bagasse. Three businesses, one farm.

Sugar contributes roughly 81% of revenue. The company crushed 25.66 lakh tonnes of cane in Sugar Season 2025-26 — down from 28.70 lakh tonnes the prior season, per the Directors’ Report, largely because newer cane varieties replacing CO-238 yielded less. Net sugar recovery improved to 10.20% from 9.71%, so quality was up even as volume dropped. Sugar is sold under a government-managed quota system: the Central Government allocates monthly release quotas to mills, which means MSL cannot simply dump inventory when it wants to. The ₹683 crore of sugar sitting in finished goods on the balance sheet is real inventory waiting for permission slips.

Distillery contributes about 13% of revenue. The Nanglamal distillery produced 33,798 KL of ethanol in FY26 against 29,657 KL in FY25 — a meaningful 14% volume increase. For Ethanol Supply Year 2025-26 (November 2025 to October 2026), the company has an Oil Marketing Company allocation of 38,000 KL from B-Heavy and C-Heavy molasses. The government mandate for E20 blending — 20% ethanol in petrol — became effective April 1, 2026 across all states. The Bureau of Indian Standards has now issued specifications for E22 through E30 blends. For a distillery sitting on a cane complex, this policy direction is structural tailwind.

Co-generation contributes roughly 2% of revenue — ₹28.84 crore in FY26 versus ₹17.40 crore in FY25. The uplift came partly from a new tariff structure notified by the UP Electricity Regulatory Commission in October 2025, which the company applied retrospectively from April 2024 through September 2025, recognising ₹5.05 crore in differential revenue. The installed capacity is 53.5 MW. Bagasse, pressmud, and molasses round out the by-product lines.

The brand “MAWANA” was formally acquired from Usha International Limited for ₹5.75 crore in December 2024 and is treated as an indefinite-life intangible. It had been living in a related party for some time before coming home.

Does the model work? It works in the sense that integrated operations reduce pure commodity exposure. The ethanol and power divisions contributed segment profits of ₹9.69 crore and ₹41.36 crore respectively in FY26 — the power division, in particular, is quietly carrying a lot of the year’s segment profitability. Sugar at the segment level contributed only ₹44.56 crore from ₹1,319 crore of external revenue, per the consolidated segment table. The numbers invite the question: is this a sugar company with ethanol as a hedge, or an ethanol-and-power company that also happens to process cane?

4. Financials Overview

Figures are consolidated, in ₹ crore.

Full Year (Annual) Results — FY26 vs FY25

The FY25 PAT and EPS figures include ₹61.28 crore in exceptional gains (net, from the Siel subsidiary divestments); the underlying FY25 PAT excluding those gains was ₹48.14 crore, per arithmetic from the consolidated P&L. The FY26 exceptional item was a charge of ₹5.52 crore (Labour Code implementation). On a pre-exceptional operating basis, PBT fell from ₹68.08 crore to ₹55.31 crore — a 19% decline on 8.6% higher revenue, meaning the margin compression was real.

CARE Ratings, in its May 2026 report, noted that PBILDT margins in 9MFY26 stood at just 1.38%, owing to major repair and maintenance expenses in the first two quarters and higher sugarcane prices for the current sugar season. The Q4 (March 2026) quarter saw operating profit of ₹87.72 crore on revenue of ₹374.41 crore — the seasonal harvest quarter performing as expected.

Finance costs fell to ₹22.16 crore from ₹29.56 crore, per the Excel data — a direct benefit of the FY25 debt reduction from subsidiary sale proceeds.

5. Market Expectations & Historical Multiples

This section describes how the market is currently pricing the company and how that compares with its own history and peer group. It is descriptive, not predictive.

Peer median P/E drawn from the Screener peer table (Balrampur Chini 29.8x, Triveni 32.4x, Bajaj Hindusthan 30.9x, Bannari Amman 28.6x); ROCE peer median from the same table.

The market currently pays 11.1x earnings here, against a peer group where most comparable mills trade at 29–33x. The gap is notable: Dalmia Bharat Sugar sits at 11.4x and Mawana at 11.1x — both are the outliers at the low