Ugar Sugar's Revenue Gains Mask a Sharp Profit Decline
The sugar maker posted a 32% YoY revenue jump, but profit fell sharply, leaving net margins at just 0.3%.
Ugar Sugar's Q1 FY27 shows a strong top-line performance with revenue up over 32% year-on-year. However, profit fell dramatically, highlighting a severe margin squeeze.
The Ugar Sugar Works delivered a quarter of stark contrasts for Q1 FY27. While revenue surged impressively, profit nearly vanished, pointing to significant pressure on the bottom line.
The company's revenue rose 32.2% year-on-year to ₹480.94 crore, continuing a multi-quarter growth trend. Sequentially, sales were also up 21.1% from the March quarter. However, profit tells a different story. It fell sharply to just ₹1.49 crore, a decline of 110.9% compared to the same quarter last year and a 96.7% drop from the previous quarter. This has pulled the net profit margin down to a wafer-thin 0.3%.
A look at the last five quarters shows the volatility in the company's performance:
Revenue (₹ Cr)
Profit (₹ Cr)
Net Profit Margin (%)
| Metric | CurrentQ1 FY27 | PreviousQ4 FY26 | Same quarter LYQ1 FY26 |
|---|---|---|---|
| Revenue (₹ Cr) | 480.94YoY +32% | 397.02 | 363.88 |
| Profit (₹ Cr) | 1.49YoY +111% | 45.76 | -13.73 |
| Net Profit Margin (%) | 0.3YoY +108% | 11.5 | -3.8 |
The table reveals a pattern of fluctuating profitability against a generally rising revenue base. The trailing twelve-month (TTM) net profit margin stands at 1.8%, suggesting the latest quarter's performance is a notable dip below the recent average.
Key Points
- The stock has delivered a 10% return over the past year, trading at a P/E of 10.1, which is a significant discount to the industry average of 30.3.
- Despite the profit squeeze, the company maintains strong return ratios, with an ROE of 60.16% and an ROCE of 29.62%.
- Leverage remains elevated with a debt-to-equity ratio of 1.57, though interest coverage at 4.07 times is manageable.
The challenge for Ugar Sugar is now clear: translating its robust revenue growth back into sustainable profitability.
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· UGARSUGAR
(BSE)
ISIN: INE071E01023
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