Sukhjit Starch & Chemicals Ltd (BSE: 524542) Q1 2026 Earnings Call dated Aug. 13, 2025
Corporate Participants:
Unidentified Speaker
Aman Setia — Senior Vice President, Finance & Company Secretary
Rakesh Chawla — Senior Vice President & Chief Financial Officer
Dhiraj Sardana — Senior Vice President & Chief Executive Officer
Bhavdeep Sardana — Senior Vice President & Chief Executive Officer
Analysts:
Unidentified Participant
Shivkumar Prajapati — Analyst
Naitik Mutha — Analyst
Darshil Jain — Analyst
Aditya Khandelwal — Analyst
Presentation:
operator
SA Sam sa. Ladies and gentlemen, please stay connected. The call will begin shortly. Thank you. Ladies and gentlemen. Good day and welcome to the Sukjeet Starch and Chemicals Limited Q1FY26 earnings conference call. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star and then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Aman Setia. Thank you.
And over to you, sir.
Aman Setia — Senior Vice President, Finance & Company Secretary
Thank you, ma’. Am. Good evening ladies and gentlemen. Hi. Aman Setia, Senior VP, Finance and Company Secretary of Mr. Jeep Sarj. Extend a very warm welcome to all of you joining us for today’s call to discuss our Q1 FY26 results. Dear investors, we truly value your ongoing support and commitment. I trust you have reviewed our Q1 FY26 financial results which are available on the stock exchange as well as on our website today. Joining us from the management team are Mr. Dheera Sarwana, Senior VPN CEO Mr. Bhagdeep Sardana, Senior VPN CEO and Mr. Akesh Jawla, Senior VPN, CFO. For an overview of our financial performance I will now hand over to Mr.
Akesh Chawla.
Rakesh Chawla — Senior Vice President & Chief Financial Officer
Good evening everyone. Thank you, Amanji. I am delighted to welcome all of our stakeholders to today’s call. I would like to provide summary of our financial results for the quarter year ended June 25. In this quarter the revenue from operations reached 367 crore. Our beta recorded at rupees 19.89 crores with an increase of 14.11%. Q over Q and A beta margin stood at 5.42%. In terms of bottom line performance, our net profit for the quarter was rupees 4.75 crores. Up 94.67% from the previous quarter. For a more in depth analysis of our operational performance. I will now turn the call over to Mr.
Dheera Sardana. Thank you. Good afternoon everyone. I’m pleased to share some thoughts on. The broader industry environment as we begin FY26. The year has commenced on a promising note and we are encouraged by early signs of recovery across key sectors. The starch industry in particular is showing initial signs of stabilization in raw material pricing. This is being supported by the government’s proactive initiatives to boost maize cultivation aimed at meeting rising demand from industrial and poultry segments. These efforts are expected to ease supply side pressures and contribute to a more balanced and predictable input cost environment in the coming quarters. We’ve also seen stable finished good pricing and a notable uptick in offtake which signals strengthening demand across end user industries such as food processing, textile, paper and pharmaceuticals.
With improving maize availability and supportive pricing dynamics, we remain cautiously optimistic about the outlook for the second half of FY26. The macro environment continues to evolve and while challenges remain, we believe our industry is well positioned to benefit from structural tailwinds and policy support. Now I would like to hand over to Mr. Bhavdeep Sardana to share some more details with you. Thank you.
Bhavdeep Sardana — Senior Vice President & Chief Executive Officer
Thank you. We are pleased to present our operational and financial performance for the first quarter of FY26. We recorded a mute start to the year. However, with encouraging momentum across our core business segments during the quarter we saw stable pricing and increasing offtake. These trends, combined with rising consumption in the country and better raw material availability reinforce our confidence for the second half of the fiscal year. Looking ahead, our focus remains on deepening customer engagement, driving innovation and embedding sustainability across our operations. These pillars are centered reflect our commitment to delivering an enduring value to all stakeholders.
In conclusion, we are confident in the tread, the geopolitical and the tariff for our business and we are confident that the opportunities that lie ahead will add value. Our strategic initiatives coupled with disciplined execution position us well to navigate the evolving landscape and deliver consistent performance. Thank you and I now welcome any questions you may have.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press STAR and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press STAR and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. The first question is from the line of Shivkumar Prajapati from Ambit Investment Advisors. Please go ahead.
Shivkumar Prajapati
Hi, thanks for one more question. My first question is on the industry front. So I just want to understand at what phase is the industry growing? And it would be helpful if you could, you know, put the volume figures for the industry versus what volume growth did we register for the quarter? Those are exact volume numbers. But yes, we are growing. The industry is typically grows minimum at the rate of gdp. So that answers both your questions. As far as to give you a global perspective is at 50% of that.
operator
But your audio is breaking.
Shivkumar Prajapati
Hello. Am I audible?
operator
Yes.
Bhavdeep Sardana
Yes. Okay, so I’ve answered your question A that our industry Grows at the minimum at the rate of GDP it can go grow faster also depending on which sector is growing, etc. I cannot share with you the volume figures of our company. That is secretive and confidential. However, we have grown in volume. Thirdly, I would like to give you a perspective that the Indian starch industry, Indian starch per capita consumption is lower than that of China and China is. So we have relatively a very big opportunity to increase our consumption over time.
Shivkumar Prajapati
Understood, sir. Next question is did the early monsoon had any impact on our business? And sequentially we have done better. So is it attributable to, you know, raw material correction or is it from the realizations front.
Bhavdeep Sardana
A healthy monsoon will affect the incoming curry crop. We are hopeful that the curry crop will be very good. The as far as price correction you are referring to, are you referring to the maize price in which for Ravi crop or you are referring to the prospective curry crop?
Shivkumar Prajapati
So Ravi crops.
Bhavdeep Sardana
Ravi crop is already harvested. The price which we saw was a result of good availability and timely intervention of government of India for supplying rise to the ethanol player.
Shivkumar Prajapati
So that means we did not book any kind of inventory loss. Is it, is my understanding correct?
Bhavdeep Sardana
We have not booked any inventory loss.
Shivkumar Prajapati
Okay. Okay, sir. And so my next question is there’s a ratio.
operator
Yeah, you are. Excuse me, you know, you’ve asked, you said two questions. You are on question number four. If there are other, can you come back?
Shivkumar Prajapati
Yes.
Shivkumar Prajapati
Thanks.
operator
Thank you. A reminder to the participant, anyone who wishes to ask a question, press star and one on their touchstone telephone. The next question is from the line of NATIC from NV Alpha Fund. Please go ahead.
Naitik Mutha
Hi sir, thanks for taking a question. So my first question is, you know, in. In the last call you had mentioned there’s some pricing pressure in terms of starch international starch prices. So just wanted to know. Now you mentioned that the prices are settled but if you could share, you know, QQ has have the price increased or they are there where they were. And how is the, you know, the China exports affecting the same.
Bhavdeep Sardana
Yeah, so thank you. And I recall having the conversation, yes, there has been a price stabilization and a minor price increase. What’s helped the industry is the rationalization in raw material pricing during this period. And we are hopeful that bottom has been tested. The next couple of months will give us an idea of the resilience in pricing as well as government of India’s negotiations with us will lead to some inputs on maize pricing as well. Whether government of India agrees to ethanol import or it agrees to GM maize import for ethanol production. All that will have a bearing on raw material pricing and that will have an impact on our finished good prices as far as exports is concerned.
I believe some manufacturing exports out of India have not started in a very big way. But there has been a positive change over the last two months. So I am hopeful that with price stability and Indian maize pricing being competitive in the local area where there the export opportunity will be there for certain units.
Naitik Mutha
If you could get some sense on what sort of utilization we were working on and given that there was some sort of over capacity across industry, are we still going ahead with the 400 tpd and if. Yes, I mean any progress on that?
Bhavdeep Sardana
So. Most of the. We handled our expansion in a very different way. We chose to look at the different products which we were targeting, the value added products. We have commissioned both. One product is left that we will commission by the end of this financial year. It will probably spill over. There’s a lot of background noise in your. At your end. Sorry. Yeah. So I was. What I was saying was that we have chosen not to finish all expansions. We have chosen to prioritize finish good products expansions which are of value addition in nature and which will add to our bottom line.
So we have fast tracked those. Only one product is left which I think in the next financial first quarter we should have that complete. But we also added in the meantime 200 tons and we are hopeful that as and when the supply and demand improves we’ll be able to test that capacity and then it will take us another maybe two quarters after we decide to finish the balance 200 tons capacity grinding expansion. We are at say 1800 degree and. Could be the utilization. So we are targeting 85% by the end of this year. We’ve been running at 85% when we are hoping that we’ll continue with this 85% for by the end of the year. We fluctuate between 78 to 85% depending upon seasonality, certain product mix etc. Etc. But we are hoping to target about 8085 between between 80 and 85% for this this fiscal.
Naitik Mutha
Got it sir. That’s it from my side. Thank you.
Bhavdeep Sardana
Thank you.
operator
Thank you. The next question is from the line of Darshul Jain from RJ Securities. Please go ahead.
Darshil Jain
Hello. Am I audible?
operator
Yes sir.
Bhavdeep Sardana
Yeah.
Darshil Jain
Thank you for taking my question. I have a couple of questions. So firstly, could you provide more details on how maize procurement costs have trended this quarter compared to previous periods and what impact this has had on Your gross margin.
Bhavdeep Sardana
You were totally blanked out in between. Can you repeat that please? I missed the second part of your question.
Darshil Jain
So how has, how has the mace procurement cost have impacted your margins? So that was the second part.
Bhavdeep Sardana
Okay, so we, if you can see our margins have improved and there’s been a positive effect. And with the fall in finished good prices and raw material which in the previous quarter did not correct as much, it corrected in in the last quarter whose results we are discussing with you. So that factor and the stabilization in prices and renewed demand have started to help our industry and our company. And we are hopeful that this journey will continue in the next couple of quarters.
Darshil Jain
Understood, sir. Secondly, with the ethanol producers competing for maize, how do you assess the risk of future price volatility and what procurement strategies are in place to mitigate this?
Bhavdeep Sardana
See, since we are a well hedged company in terms of locations, supplying supply of maize is not an issue. The question is now with government of India coming in and releasing surplus rice to ethanol players gives us an opportunity to take maize at softer prices and not have another stakeholder of industrial maize in the market. So we tend to benefit from that strategy. And we are also working with government agencies, including the planning of various state governments where we are on maize development and with government of India’s plans of increasing maize production to 70 million tons in the short term there could be certain gaps but I think in the medium term this will play out.
And with government capping its for now, its ethanol mixing, we will get some kind of, you know, a better mix of supply and demand for industrial meat.
Darshil Jain
Understood? Understood. And lastly, could you share more details on the scale of the expansion or expected commissioning timelines and additional capacity being added? And furthermore, what would be the total capex plan for this expansion and how are you going to fund that? Is it through internal accruals or are we going to take on debt or is it a mix of it.
Bhavdeep Sardana
The internal debt? For this expansion we have completed 200 tons of expansion. 200 tons of expansion. We are going slow because we are prioritizing on finishing the end product rather than the grinding capacity. So our focus has been on that we completed most of the products. Only one product is pending at one location. So we will complete that first and then take on the balance 200.
Darshil Jain
All right, sir. All right. Thank you for answering my question. That’s all from my side. All the best. Thank you.
operator
Thank you. Before we take the next question, a reminder to the participants. Anyone who wishes to ask a question, we press star and one on Their touchstone telephone. The next question is from the line of Aditya from Securities Investment Management. Please go ahead.
Aditya Khandelwal
Yeah, hi sir. Thanks for the opportunity. So I just wanted to understand one thing. Since I look at the last couple of quarters we have been seeing that the finished goods pricing is on the lower trend. So just wanted to understand what is leading to lower goods prices.
Bhavdeep Sardana
See as was discussed alluded to by one of the a lot of starch industry was also exporting due to certain geopolitical changes. Taj industry exports had halted in the previous couple of quarters causing a disruption and oversupply in the low. So product of one or two. Sorry, prices of one or two products corrected in India and that led to a kind of softening in prices across the country. However, that has started to change. Pull that this trend. The stability in price change is going to see margins going up from here on.
Aditya Khandelwal
So you know, just wanted to understand now is the higher maize price the major reason for the drop in margins or the lower finished goods prices means which of these two are the major factor behind the profit margin?
Bhavdeep Sardana
Both. It was a combination. It was a combination higher maize price made Indian Indian starch manufacturers uncompetitive in the export market. And you know that that caused a lot of problems.
Aditya Khandelwal
Which I heard was that China has also allowed started allowing exports of their maize products. So how would that then affect the Indian cop the Indian exports?
Bhavdeep Sardana
I mentioned this to you that. Due. To when I said due to geopolitical changes. So China entered the ASEAN after having stayed away for 10, 15 years. But saying that Indian starch manufacturers have restarted to export as a company we are not doing it but our colleagues in industry are and they have restarted exporting because Indian maize is competitive.
Aditya Khandelwal
And so just wanted to understand now out of the total Indian starch production how much of would it be catering to export markets and how much is it for domestic consumption?
Bhavdeep Sardana
I can’t say. I can’t. I don’t have that figure. I will not be able to give you because a lot of manufacturers are not listed and that I don’t have data access to unlisted players data. I will not be able to tell you that.
Aditya Khandelwal
Understood. So thanks for answering my questions. Thank you. Thank you.
operator
Thank you. The next question is from the line of Shivkur from Ambit Investment Advisors. Please go ahead.
Shivkumar Prajapati
Yeah, hi. Thanks for having a question again. So I have first is like I’ve seen stocks to use ratio, a global ratio that people track. So it is at around 26, 22% for 25 whereas four years back it was around 26%. So this ratio is lower which shows that there is, you know, a shortage of coins. So if I say the stock of corn is around 275 metric ton whereas the consumption is over 1200 metric ton. This is one thing and I just relate it with another. A company with, with the name of Regal is coming with an ipo.
So just want to understand about your view. Like is this an indication that the good times are ahead for this industry as a whole?
Bhavdeep Sardana
See, I. I don’t know what your question is. I am trying to make sense of. So you, you. Sorry, you have mentioned that some ratio your voice broke in between. So 22% and 26%. You were alluding to shortage versus demand. Can you just expand on that?
Shivkumar Prajapati
Yeah, sure. So basically there’s a ratio. So if I say maize ratio. So stocks to use ratio for maze globally is at 22% whereas four years back it was around 26%. This is first thing. So right now what is happening If I look at the stock globally, so it is around 275 metric ton whereas the consumption that is the demand is over 1200 metric ton. So this.
Bhavdeep Sardana
So you are. What you are referring to is not 27, 275 metric ton. It’s million metric ton. Number one. Number one. And that is only for one season at one point in time. India, India has seasonal maize. You can google and check. You know there’s Rabi and Karib crops and Indian, Indian and manufacturing. Indian industrial maize requirement alongside poultry feed requirement. Majority of the growth and there has been adequate maize available. Price of maize has been an issue in about 2/4 ago. Price of maize has corrected in India. It is still higher in India as compared to global pricing.
But it is on at a softer level now. And there is no shortage of maize. Your second question, you were not audible at all. Can you please ask your second question again?
Shivkumar Prajapati
Sure. So second question is a company, Regal is coming with an ipo. So just want to you know, hear your view. Like how does the company differs because they are also, you know start into starch making and this means processing.
Bhavdeep Sardana
So I have no idea about them.
Shivkumar Prajapati
Okay. Just wanted to. Okay, no worries. No worries. That’s it. Thank you so much. And best of all.
operator
Thank you. The next question is from the line of Ruthie Vora from SAS Capital. Please go ahead.
Unidentified Speaker
Yeah, thank you for the opportunity. Sir, I have a question that could you share your plans regarding the product portfolio diversification and are you exploring any opportunities to introduce new starch Based products or derivatives.
Bhavdeep Sardana
Yeah. So thank you for a very valid question. Very pertinent product mix. I will not give you the exact breakup but I’ll give you a good sense of it. Where we are heading. We are seeing complexity of manufacturing in the FMCG space. We are seeing complexity and a higher quality assured supply, you know, as personal care. As FMCG transcends into personal care as you know, lifestyle and changes in food habits for a more healthier lifestyle happen. So we are catering and changing our production capacities to align with our customers. Making that shift now, whether it is highly assured pharmaceutical grade products or qualifying existing products and increasing the quality assurance around the existing infrastructure.
Also working with customers in reducing and making say a low moisture product or making a product with a certain attribute but being the same product but changing the specification to suit our customers overall product mix, our customers overall recipe. So we have started partnering our customers in a much more, you know, micro, at a micro level to work with their recipes to create specifications especially for them. So when there is a downturn there is a certain USP for us to, you know, always be associated with a customer and have certain assured business. But that’s where we are planning.
That’s, that’s what we have been doing. And it will take us another, I think two to three quarters more to add one or two attributes to our product portfolio such as this.
Unidentified Speaker
Okay, okay. And additionally, how are you approaching the development of new customer segments or entry into untapped domestic or international markets to broaden your revenue base?
Bhavdeep Sardana
Yes. So our plan for the global markets is the same. So if you are working with an MNC in India, partnering them with them on R D that affords us an automatic qualification to supply to them at a global level. So that mitigates the cost of any logistics, you know, that automatic supply. So then you are put in the same on the same platform as a global manufacturer in Europe or US and you could be supplying to MNCs you know, based in Africa or in Middle east or in somewhere in asean. So we have started working with these companies, our existing customers in working with them on R D projects.
And we are hopeful that it will enable us an opportunity to work with them globally.
Unidentified Speaker
Okay, okay. And further I have like how do you assess the demand environment for me Starch and its derivatives across key end users industries for the remainder of FY26?
Bhavdeep Sardana
I feel that going forward the demand for the starch industry is going to remain robust. The paper industry packaging sector is growing. You see the number of, if you see the results of the paper companies, the listed ones, the ones who are making quality paper writing and printing grades and who are waiting for the NEP to play out. I think paper as a sector, food as a sector, fmcg, personal care, all these sectors with our India as a consumption story is going to do well. Are MNC companies barring this confusion over tariffs, our SMCG companies are looking to manufacture in India for brands in India for a global market.
So excess capacity out of from their plants will go abroad. So that you know, I’m sure government of India will do what it takes to protect the interests of the Indian manufacturing. And I think in the next few weeks we’ll have clarity on tariffs. And once that is done, I think India will be exporting again in a very big way. Starts and starts products. By large internal demand remains robust.
Unidentified Speaker
Okay. Okay. Additionally, what is your outlook on finished goods pricing? Do you expect stability or any upward movement?
Bhavdeep Sardana
For now we are stable. But prices have to go up as we end towards a closing season and shortage of maize in between the new arrival crop coming in, I think prices will go up and government has announced a new MSP which should kick in at the time of the Kharib crop. So that will also have a place. So if raw material price goes up, finished goods prices should also rise. So we are hopeful that the supply demand matrix would be favorable for price rise going forward as we go into later in the year.
Unidentified Speaker
Okay. Okay. Thank you so much and all the best sir.
Bhavdeep Sardana
Thank you.
operator
Thank you. The next question is from the line of Isha Murthy from MNA Ventures. Please go ahead.
Unidentified Speaker
Hello sir. So my question is like could you share who are your top five customers and like how significant are they to your overall business?
Bhavdeep Sardana
I am sorry I can’t share that.
Unidentified Speaker
It’s confidential in nature.
Bhavdeep Sardana
All up. I will not be able to share that. But we are well diversified in terms of customer mix, product mix. We work with various sectors. Like I said, textile is there, paper is there, fmcg both in the personal care space, food sector, pharma sectors. And we are trying to grow in all our sectors on the value added side.
Unidentified Speaker
Okay. Also like how does your company manage the raw material pricing pressure while dealing with the customers?
Bhavdeep Sardana
See, we get into various. We have to be buy mail at what price it is available. We know when to buy and we try to keep our cost low when we’re talking to customers on finished good pricing. Whatever we sell as spot is sold on spot pricing. But larger organized players get us get into Quarterly contracts, annual contracts, sometimes, but mostly quarterly contracts with us. So you win some, you lose some, but then eventually the prices tend to stable out.
Unidentified Speaker
Also. Could you share the type of contracts you have in place right now.
Bhavdeep Sardana
To talk about that? It’s confidential in nature, but we have a fair mix of all types of contract.
Unidentified Speaker
Okay. So thank you.
Bhavdeep Sardana
You’re welcome.
operator
Thank you, ladies and gentlemen. We’ll take this a lot as the last question for today. I would now like to hand the conference over to the management for closing comments.
Aman Setia
Thank you, ma’. Am. I, on behalf of the deal Group, would like to express my gratitude to all of you for joining us today and sparing your precious time for us. We look forward to your continued support in future and hope to see you back. If you have any further query, you may kindly reach out to our investor relations partner, Orient Capital. Thank you so much, ladies and gentlemen. Have a good day.
operator
Thank you. On behalf of Sukhjeet starch and Chemicals Ltd. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.