ANALYSIS OF SUGAR

INDUSTRIES

Aryan Gujaran
  (Shree hanuman Sugar, Rana sugar, kcp sugar,dwarikesh sugar )
Sugar Sector
Sugar industry is an important Agro-based industry that impacts rural livelihood of about 50
million sugarcane farmers and around 5 lakh workers directly employed in sugar mills.
Sugar industries in India are located in Uttar Pradesh, Bihar, Maharashtra, Karnataka, Tamil
Nadu, Andhra Pradesh, Gujarat, Punjab, Haryana and Madhya Pradesh. 60% of mills are in Uttar
Pradesh and Bihar. This industry is seasonal in nature so, it is ideally suited to the cooperative
sector.
Meerut, Bareilly, Saharanpur, and Bulandshahr are the major districts producing sugarcane in
UP. Maharashtra ranks second in the list of largest sugarcane producing state in India.

Global overview: Sugar refers to a sweet crystalline substance which is prepared from sugar cane
and sugar beet. It is used across the globe for innumerable food and non-food applications. In
addition to offering a sweet taste, sugar performs a variety of other functions in the food
industry. It is used as a preservative and prevents the development of microorganisms. It is also
used for preventing formation of large ice crystals in frozen products like ice cream. Apart from
this, sugar encourages fermentation in products which contain yeast. Moreover, it is used in
baked goods for retaining moisture and preventing staleness.
1)Shree hanuman sugar
 Shree Hanuman Sugar & Industries Ltd., (SHSIL) was incorporated in the year 1932 with the
main object of manufacturing sugar. The first unit was set up in the year 1936 at Motihari,
Bihar, with an initial capacity of 250 TCD. The location is strategic, as it is well connected
by national highway No.28 and main rail line connecting Patna.
 Presently SHSIL is engaged mainly in Sugar Business. The sugar factory of the company is
located at Motihari, one of the sugar cane rich areas of Bihar. The factory is a seasonal one
and is operational from November to March. The capacity of the factory is 2500 TCD. The
company proposes to undertake an upgradation programme to achieve a capacity of 4000
TCD in the 1st phase and 6000 TCD in the 2nd phase in the next two years, to further
improve its viabilities.
2)Rana Sugar
 Rana Group of Companies made a humble beginning in mid 80’s when Rana Gurjeet Singh,
group’s Managing Director , set-up Agro Boards Limited a Kraft Paper unit in Punjab
Success of this maiden venture was duly recognised by apex state owned industrial
promotion corporations and this led venturs of Rana Group with different state owned
corporations.
 Rana Sugars Ltd. was founded in 1992 by collaboration with Punjab AgroCorporation. In
year 2002 RSL has setup a Demonstration Co-generation Project to produce extra power
from the Bagasse (by-product of sugar) and export it to Punjab State Electricity Board.
3)Kcp sugar
 K.C.P Sugar and Industries Corporation Ltd is one among the leading sugar manufacturing
companies in India. Its allied business consists of manufacturing and marketing of
Rectified Spirit, Extra Neutral Alcohol, Ethanol, Incidental Cogeneration of Power,
Organic Manure, Mycorrhiza Vam, Calcium Lactate and CO2. Company has two sugar
factories located in Krishna District Andra Pradesh having an aggregate crushing capacity
of 11,500 tons per day.

4)Dwarkish sugar
 The group, which made a humble beginning with the commissioning of its first plant of
2500 TCD in Bijnor district of Uttar Pradesh, stands tall today across the sweet landscape
of sugar manufacturing, along with ethanol and industrial alcohol production.
 Headquartered in Mumbai and steered by a legacy of excellence, the group is led by the
philosophy to either find a way or make one to achieve excellence across its business value
chain.
Abstract: This abstract discusses various financial ratios that can be used to evaluate the
performance of a company. The profitability ratio measures a company's ability to generate
profits from its operations. The working capital ratio measures a company's ability to meet its
short-term obligations. Other valuation ratios, such as the earning yield, dividend yield, and P/E
ratio, provide insight into a company's financial health and future prospects. Capital structure,
leverage ratio, and interest coverage ratio (ICR) are also important factors to consider when
analyzing a company's financial health. Capital structure refers to the mix of debt and equity
used to finance a company's operations. A high leverage ratio indicates that a company is heavily
reliant on debt, which may increase its financial risk. The ICR measures a company's ability to
meet its interest payments on its outstanding debt. By analyzing these financial ratios, investors
can gain a better understanding of a company's profitability, liquidity, and financial health. This
information can help them make informed investment decisions and manage their portfolios
effectively.
Key words – Liquidity ratio , working capital ratio, Revenue, Sales, Capital structure ratio,
Profitability ratio
Liquidity
Shree Hanuman Sugar had a current ratio of 0.4271 in 2021, which decreased significantly to
0.09697 in 2022. The decline in the current ratio is a cause for concern and indicates that the
company may have difficulty meeting its short-term obligations. The decrease in the current ratio
may be due to factors such as an increase in short-term liabilities or a decrease in current assets,
such as cash or accounts receivable. Rana Sugar had a current ratio of 1.04173 in 2021, which
decreased slightly to 1.040 in 2022. Due to decrease in inventory or an increase in short-term
debt. Dwarikesh Sugar had a current ratio of 1.0402276 in 2021, which increased significantly to
1.588 in 2022. The significant increase in the current ratio suggests that the company has
improved its liquidity position. KCP Sugar had a current ratio of 1.80 in 2021, which increased
to 1.973 in 2022. The increase in the current ratio indicates that the company has improved its
liquidity position. This may be due to an increase in cash, it appears that Dwarikesh Sugar and
KCP Sugar have improved their liquidity position in 2022 compared to the previous year. On the
other hand, Shree Hanuman Sugar's current ratio has declined, indicating a bad liquidity position.
The companies must check their financial Health.
Working capital ratio
Working capital is an essential metric that indicates a company's ability to meet its short-term
obligations, Shree Hanuman sugar has a working capital ratio of 0 and no credit turnover ratio,
debtor’s turnover ratio, or inventory turnover ratio in both 2021 and 2022. Rana sugar has shown
improvement in its working capital ratio, which increased from 0.125 in 2021 to 0.186 in 2022.
the company did not have any credit turnover ratio in either of the years. Debtors turnover ratio
decreased from 0.558 in 2021 to 0.727 in 2022, while the inventory turnover ratio decreased
from 0.7841 in 2021 to 0.5487 in 2022. KCP sugar had a higher working capital ratio in 2021,
which decreased from 0.20778 to 0.1654 in 2022. Similar to the other companies, KCP sugar did
not have any credit turnover ratio in both years. The debtor’s turnover ratio increased
significantly from 0.9096 in 2021 to 1.64 in 2022. The inventory turnover ratio also increased
from 0.879 in 2021 to 3.24 in 2022. Dwarikesh sugar had a working capital ratio of 0.17469 in
2021, which increased to 0.20391 in 2022. The company did not have any credit turnover ratio in
both years. The debtors turnover ratio increased significantly from 0.9926 in 2021 to 3.544 in
2022. However, the inventory turnover ratio decreased from 0.789 in 2021 to 1.247 in 2022.
Dwarikesh sugar has shown improvement in its working capital ratio and debtors turnover ratio.
However, KCP sugar had a better debtors and inventory turnover ratio in 2022. Rana sugar has
shown improvement in its working capital ratio
(sales of shree hanuman sugars is 0)

Capital structure
The leverage ratio represents the amount of debt a company has relative to its equity, while the
interest coverage ratio (ICR) shows a company's ability to pay interest expenses on its debt using
its earnings before interest and taxes (EBIT). KCP Sugar has the lowest leverage ratio, which
suggests that the company has a lower level of debt, The company's ICR ratio has also increased
from 1.32 to 2.14 it shows kcp sugar in better position to pay debt not only that Dwarikesh Sugar
has a higher leverage ratio, indicating that the company has a higher level of debt , While the
company's ICR ratio has increased slightly from 1.25 to 1.81, it may suggest that the company's
earnings may not be sufficient to cover its Debt ,Shree Hanuman Sugar and Rana Sugar both
have higher leverage ratios than KCP Sugar these companies have a higher level of debt
Profitability
KCP Sugar appears to be the best performing firm as it has shown consistent improvement in its
profitability ratios across all the parameters in 2022 compared to 2021. Its Gross Profit ratio
increased from 17.96% to 25.98%, while the Net Profit margin ratio improved from 12.148% to
14.896% in 2022. The Return on capital employed ratio also increased significantly from 0.0098
to 0.0939 in 2022. The Earnings per Share ratio also showed a significant increase from 11.31 to
15.81 in 2022, indicating better profitability per share. The dividend per share also increased
from 0.3 to 0.78 in 2022, showing an increase in the company's distribution of profits to
shareholders. Shree Hanuman Sugar, on the other hand, showed a significant decline in all the
profitability ratios in 2022 compared to 2021, indicating fall in the company's profitability. The
company's Gross Profit ratio and Net Profit margin ratio declined from 2350% to 0%, and the
Return on capital employed ratio decreased from 1.007 to 0.0069 in 2022. The Return on Equity
ratio also decreased from 2.58 to 2.26 in 2022. However, the Earnings per Share ratio showed a
significant improvement from 0.26 to 0.58 in 2022. Rana Sugar and Dwarikesh Sugar also
showed different performance in their profitability ratios in 2022 compared to 2021. Rana Sugar
showed an improvement in Gross Profit ratio and Earnings per Share ratio in 2022 but a decline
in Net Profit margin ratio, return on capital employed ratio, and Return on Equity ratio.
Dwarikesh Sugar showed an improvement in Gross Profit ratio, Net Profit margin ratio, and
Earnings per Share ratio but a decline in Return on capital employed ratio and dividend per
share. KCP Sugar appears to be the best performing firm in terms of profitability ratios.
Valuation ratio
Valuation is the financial process of determining what a company is worth. Valuation ratios put
that insight into the context of a company's share price, where they serve as useful tools for
evaluating investment potential. Dwarikesh sugar has shown improvement in its working capital
ratio and debtors’ turnover ratio. However, KCP sugar had a better debtors and inventory
turnover ratio in 2022. Rana sugar has shown improvement in its working capital ratio, Rana
Sugar has experienced a significant increase in its earning yield and a decrease in its P/E ratio
from 2021 to 2022. However, the company's dividend yield has decreased to zero not only that
kcp sugar company's dividend yield has increased significantly from 2021 to 2022, Dwarikesh
Sugar has seen a significant decline in its earning yield and a slight increase in its P/E ratio from
2021 to 2022. Sugar market is not looking good.