Revenues of sugar mills in India to rise 8 pc in FY26

An above normal monsoon is expected to lead to increased sugarcane acreage in Maharashtra and Karnataka, which, in conjunction with expectations of better yield in key sugar-producing states, projects a 15 per cent jump in sugar output during this year, according to a report released on Wednesday.
ICRA estimates the revenues of integrated sugar mills to expand by 6-8 per cent in FY2026, supported by an expected increase in sales volumes, along with firm domestic sugar prices and higher distillery volumes. Despite this, the operating profit margin gains for the sugar mills will be modest in FY2026 if ethanol prices remain stagnant. ICRA’s outlook for the sugar sector is ‘Stable’, backed by the anticipated improvement in revenues, stable profitability and comfortable debt coverage metrics, along with the government’s policy support, including the ethanol blending programme (EBP). After the estimated diversion of 4 mn MT towards ethanol production, net sugar production will increase to 30.0 mn MT in 2026 from 26.2 mn MT in 2025. The report expects the closing sugar stock to be around 5.2 mn MT as on September 30, 2025, lower than the sugar stock of 8.0 mn MT as on September 30, 2024.
This would be equivalent to 2 months of consumption. The closing stock is expected to increase to 6.3 mn MT (approximately 2.5 months of consumption) as on September 30, 2026, if the domestic consumption and export quota remains same as SY2025, as per estimates.