Latest news with #Crisil
Hans India
5 hours ago
- Business
- Hans India
India's sugar output to rise 15% at 35 mn tonnes
New Delhi: India's gross sugar production is likely to rise 15 per cent in sugar season 2026 to about 35 million tonnes, aided by above average monsoon, boosting cane acreage and yields in key sugar producing states such as Maharashtra and Karnataka, a Crisil report showed on Friday. The growth is expected to ease tightness in domestic supply and has the potential to boost ethanol diversion and revive exports with appropriate policy support. In fiscal 2026, with improved supplies and potentially higher diversion of sugar for blending ethanol with gasoline, the operating margin of sugar mills is likely to recover to about 9-9.5 per cent. This should support credit profiles of sugar players, which saw some pressure last fiscal. Over the past two seasons, while the fair and remunerative (FRP) price of sugarcane has risen 11 per cent, ethanol prices have largely remained unchanged. In sugar season 2026, diversion for ethanol is expected to rise to 4 million tonnes (from 3.5 million tonnes in sugar season 2025), supported by high sugar output and the government's 20 per cent blending target (19 per cent average achieved so far), as it offers faster cash-flow churn, the report mentioned. Meanwhile, domestic sugar prices have held steady at Rs35-38 per kg this season. With output expected to rise, sugar prices are likely to remain range-bound. Exports, at 1 million tonnes in sugar season 2025, can comfortably continue at similar levels in 2026 with high sugar output and opening inventory of 2 months of consumption.
India Gazette
a day ago
- Business
- India Gazette
Favourable monsoon to boost India's sugar output, prices will remain range-bound: CRISIL
ANI 27 Jun 2025, 12:40 GMT+10 New Delhi [India], June 27 (ANI): India's gross sugar production is expected to rise in the sugar season (SS) 2026, helped by above-average monsoon, boosting cane acreage and yields in key sugar-producing states such as Maharashtra and Karnataka, according to a report by Crisil. The Crisil report estimates that sugar production is expected to rise by about 15 -35 per cent to 35 million tonnes. This surge is expected to boost sugar mills and give some relief from the trifecta of challenges, such as high cane costs, subdued ethanol prices and muted exports that compressed their operating profitability by about 200 basis points (bps) to 8.7-9 per cent in improved supplies and potentially higher diversion of sugar for ethanol blending with gasoline, the operating margin of sugar mills is likely to recover to about 9-9.5 per cent in FY 2026. This is likely to support the credit profiles of sugar players, which saw some pressure last diversion for ethanol is expected to rise to nearly 4 million tonnes, supported by high sugar output and the government's 20 per cent blending target, as it offers faster cash-flow churn.'The strategic diversification to ethanol was intended to de-risk the earnings and cash flow of sugar mills. But rising cane costs (cane FRP has been hiked by 4.5 per cent to Rs 355 per quintal for SS 2026) and stagnant ethanol procurement prices have limited improvement in profitability,' said Anuj Sethi, Senior Director, Crisil report adds that despite this 15 per cent rise in sugar production, margins of integrated millers will improve only marginally 'As a result, the operating margin of integrated millers is likely to improve only marginally by 40-60 bps to 9-9.5 per cent despite a 15 per cent jump in sugar output. That said, standalone millers, lacking distillery or cogeneration power sales, may continue facing margin pressure,' noted the reportOn the domestic price side, sugar prices have held steady at Rs 35-38 per kg this season. With output expected to rise, sugar prices are likely to remain range-bound, limiting any significant upside in the profitability of sugar millers. (ANI)
Times of Oman
a day ago
- Business
- Times of Oman
Favourable monsoon to boost India's sugar output, prices will remain range-bound: CRISIL
New Delhi: India's gross sugar production is expected to rise in the sugar season (SS) 2026, helped by above-average monsoon, boosting cane acreage and yields in key sugar-producing states such as Maharashtra and Karnataka, according to a report by Crisil. The Crisil report estimates that sugar production is expected to rise by about 15 -35 per cent to 35 million tonnes. This surge is expected to boost sugar mills and give some relief from the trifecta of challenges, such as high cane costs, subdued ethanol prices and muted exports that compressed their operating profitability by about 200 basis points (bps) to 8.7-9 per cent in FY2025. With improved supplies and potentially higher diversion of sugar for ethanol blending with gasoline, the operating margin of sugar mills is likely to recover to about 9-9.5 per cent in FY 2026. This is likely to support the credit profiles of sugar players, which saw some pressure last fiscal. Additionally, diversion for ethanol is expected to rise to nearly 4 million tonnes, supported by high sugar output and the government's 20 per cent blending target, as it offers faster cash-flow churn. "The strategic diversification to ethanol was intended to de-risk the earnings and cash flow of sugar mills. But rising cane costs (cane FRP has been hiked by 4.5 per cent to Rs 355 per quintal for SS 2026) and stagnant ethanol procurement prices have limited improvement in profitability," said Anuj Sethi, Senior Director, Crisil Ratings. The report adds that despite this 15 per cent rise in sugar production, margins of integrated millers will improve only marginally. "As a result, the operating margin of integrated millers is likely to improve only marginally by 40-60 bps to 9-9.5 per cent despite a 15 per cent jump in sugar output. That said, standalone millers, lacking distillery or cogeneration power sales, may continue facing margin pressure," noted the report. On the domestic price side, sugar prices have held steady at Rs 35-38 per kg this season. With output expected to rise, sugar prices are likely to remain range-bound, limiting any significant upside in the profitability of sugar millers.
Hans India
a day ago
- Business
- Hans India
India's sugar output to rise 15 pc at 35 million tonnes on favourable monsoon: Crisil
India's gross sugar production is likely to rise 15 per cent in sugar season 2026 to about 35 million tonnes, aided by above average monsoon, boosting cane acreage and yields in key sugar producing states such as Maharashtra and Karnataka, a Crisil report showed on Friday. The growth is expected to ease tightness in domestic supply and has the potential to boost ethanol diversion and revive exports with appropriate policy support. In fiscal 2026, with improved supplies and potentially higher diversion of sugar for blending ethanol with gasoline, the operating margin of sugar mills is likely to recover to about 9-9.5 per cent. This should support credit profiles of sugar players, which saw some pressure last fiscal. Over the past two seasons, while the fair and remunerative (FRP) price of sugarcane has risen 11 per cent, ethanol prices have largely remained unchanged. In sugar season 2026, diversion for ethanol is expected to rise to 4 million tonnes (from 3.5 million tonnes in sugar season 2025), supported by high sugar output and the government's 20 per cent blending target (19 per cent average achieved so far), as it offers faster cash-flow churn, the report mentioned. Meanwhile, domestic sugar prices have held steady at Rs 35-38 per kg this season. With output expected to rise, sugar prices are likely to remain range-bound. Exports, at 1 million tonnes in sugar season 2025, can comfortably continue at similar levels in 2026 with high sugar output and opening inventory of 2 months of consumption. 'Sugar inventory levels at the end of fiscal 2026 are expected to remain at levels similar to last year, limiting the rise in working capital debt despite higher distillery operations,' said Poonam Upadhyay, Director, Crisil Ratings. For the upcoming season, key watchpoints for the sector include temporal and spatial distribution of monsoon, its impact on cane yield, timely ethanol price revisions and clarity on export policy amid global sugar price movements, according to the report.
&w=3840&q=100)
Business Standard
2 days ago
- Business
- Business Standard
States to spend ₹1 trn on pre-poll sops to women in FY26: Crisil report
Top 18 states will spend Rs 1 trillion on pre-poll sops to women this fiscal, Crisil Ratings said on Thursday. States' spending on social sector schemes will be at an elevated 2 per cent of GSDP (Gross State Domestic Product) in FY26 and is likely to impact capital expenditure, it added. The social sector spends used to be in the range of 1.4-1.6 per cent of GSDP between fiscals 2019 and 2024, and climbed up to 2 per cent last fiscal, the rating agency said. "This fiscal (FY26), the elevated spending will result in high revenue deficit, thereby limiting the flexibility of the states to undertake higher capital outlays," the agency said. The analysis includes 18 top states accounting for over 90 per cent of aggregate GSDP of all states, and added that social sector spends includes revenue expenditure for welfare of backward classes, women, children and labour, as well as assistance to certain demographics in the form of social security pensions. Its senior director Anuj Sethi said the overall expenditure across states will come at Rs 2.3 trillion, and of this, Rs 1 trillion is towards direct benefit transfers (DBT) to women primarily as "election commitments". It may be recalled that concerns were raised about the impact of the pre-poll sops to women, and with the electoral success of such schemes, a larger number of governments were feared to announce similar measures. Crisil said such tendencies will make this a key monitorable factor going ahead. "Over the past few years, several key states that have gone to the polls have introduced or increased allocations to DBT schemes. With upcoming elections in...(some) states, a rise in DBT, as part of election commitments, is possible and remains a key monitorable," it said. The agency said the increase in social welfare expenses over FY25 and FY26 is not estimated to be uniform across the states, with half of the analysed states expected to see a significant surge in these expenses, while the remaining are likely to see these spending at relatively stable levels or see a modest increase. While the social welfare expenses are inching up significantly, there is a wide gap between the rise in revenue expenditure and revenue receipts for the states over the two fiscal, it added. The overall revenue expenditure is budgeted to log a compound annual growth rate (CAGR) of 13-14 per cent between fiscals 2025 and 2026, while revenue receipts grew a slower 6.6 per cent year-on-year (YoY) last fiscal and are expected to increase 6-8 per cent YoY this fiscal. Its director Aditya Jhaver explained that a rise in revenue deficit normally results in state governments reducing capital outlay to maintain their fiscal stability. Last fiscal, capital outlay grew a meagre 6 per cent on-year (as against a CAGR of 11 per cent over 5 years ended fiscal 2024) as revenue deficit ballooned almost 90 per cent on-year, he said. "If this trend continues this fiscal, it could constrain states' capital outlay, which has a higher multiplier effect and can stimulate increased investment in the economy," Jhaver said.
