Higher ethanol sales next fiscal an offset to lower sugar exports.
Millers can expect a slightly better sugar season 2024-25. While production is likely to dip because of lower cane acreage in a few key states, surplus sugar from last season will come in handy.
Not only will it ensure adequate availability for domestic consumption but also facilitate ethanol blending, the restriction on which was eased recently. This, even as curbs on sugar exports are expected to continue for the second straight season.
Next fiscal, higher ethanol sales should candy-coat revenue growth for sugar mills after a sluggish run this fiscal because of no exports and modest ethanol sales in the first half.
The effect of lower exports and higher cane prices would be felt on operating profitability next fiscal as well. Yet the bottomline should improve gradually next fiscal as ethanol sales rise.
What will be the impact of these developments on the credit profiles of millers?
For answers, Crisil Ratings will be hosting a webinar on November 28, 2024, where our experts will analyse:
Demand-supply dynamics of the sugar sector
Ethanol-blending trends and expectations
Capital expenditure plans and key financial metrics
Credit outlook for the sector
This will be followed by a panel discussion with sector leaders and a Q&A session. We look forward to having you there.
Disclaimer: This event and its content are intellectual property and confidential information of Crisil. Any use of the same without written permission of Crisil is illegal and hence punishable. Recording the webinar in any form in full or part or copying, altering, distributing or streaming the webinar is strictly prohibited and violation will attract legal action.
