Mumbai, March 13 Integrated sugar mills are likely to see moderate revenue growth of 5-8 per cent in FY26, driven by improved sugarcane availability and stable sugar prices, a report said on Friday.
However, margins are likely to remain broadly stable as cane prices have increased, while ethanol prices have remained largely stagnant, rating agency Icra said in the report.
For SY2026, the Fair and Remunerative Price (FRP) for sugarcane has been increased by Rs 15 to Rs 355 per quintal for a basic recovery rate of 10.25 per cent.
Icra expects the operating margins of integrated sugar mills to remain range-bound at around 10-10.5 per cent in FY26 compared to 9.6 per cent in the previous year.
The revenue growth for integrated sugar mills is projected to remain moderate at 5-8 per cent in FY26, supported by higher cane availability and stable sugar prices, the rating agency said.
Icra also noted that borrowings of its sample set are likely to moderate in FY26, supported by profit accretion and repayment of distillery loans, which is expected to keep the capital structure comfortable and improve coverage metrics.
The international sugar prices in Sugar Year (SY) 2026 (October to September) have remained lower than the current cost of production and prevailing domestic prices, mainly due to surplus supply from Brazil, it added.
Global sugar production for SY205-SY2026 is estimated at 189.3 million metric tonnes, 5 per cent higher than the previous year, while consumption is expected at 178.1 million metric tonnes, around 1 per cent higher year-on-year.
However, the domestic demand-supply scenario remains comfortable, said the rating agency.
As per the third advance estimates of the Indian Sugar Mills Association, gross sugar production in SY2026 is projected to increase by 9.4 per cent to 32.41 million metric tonnes compared to 29.6 million metric tonnes in the previous year.
Meanwhile, Icra said that after an estimated diversion of 3.1 million metric tonnes towards ethanol production, net sugar production is likely to remain at 29.3 million metric tonnes.
India continues to progress on ethanol blending, achieving a blending ratio of 19.98 per cent during the first three months of ESY2026, with 239 crore litres blended, including 59.2 crore litres in January 2026.
Considering domestic consumption of 28.3 million metric tonnes and exports of 0.7 million metric tonnes, the closing sugar stock is expected to reach 5.6 million metric tonnes, equivalent to about two months of consumption, the report said.