Avadh Sugar & Energy Limited (BSE: 540649 / NSE: AVADHSUGAR) announced its Q2 FY26 financial results, reporting a total income of ₹670 crore, up from ₹634 crore in the same quarter last year. However, the company's earnings before interest, taxes, depreciation, and amortization (EBITDA) significantly declined to ₹20 crore, compared to ₹36 crore in Q2 FY25. Additionally, the company faced a loss of ₹7 crore in profit after tax (PAT) for the quarter, contrasting with a profit of ₹1 crore in the previous year. For the first half of FY26, total income reached ₹1,387 crore, a slight increase from ₹1,343 crore in H1 FY25, but the EBITDA also fell to ₹49 crore from ₹94 crore during the same period, resulting in a PAT loss of ₹15 crore.

The decline in profitability has raised concerns within the sugar industry, particularly following a ₹30 per quintal increase in the State Advisory Price (SAP) for sugarcane in Uttar Pradesh. C.S. Nopany, Co-Chairperson and Managing Director of Avadh Sugar, commented that this increase may challenge the financial viability of mills due to stagnant sugar and ethanol prices. He highlighted that production costs are already surpassing selling prices, which could further strain operations. In response to these challenges, Avadh Sugar has increased the sugarcane crushing capacity at its Hargaons Unit from 10,000 TCD to 13,000 TCD, aimed at enhancing productivity while implementing energy-saving measures.

Looking ahead, the company is also preparing for a revised power tariff set to take effect on April 1, 2024, which will see an increase of approximately ₹0.90 per unit. This adjustment is part of a broader plan that includes annual increases over the next four years. Avadh Sugar's commitment to sustainable growth is evident in its operational expansions and adaptations to regulatory changes, as it continues to navigate the complexities of the sugar market and strive for profitability amid challenging conditions.