Sukhjit Starch & Chemicals Ltd Reports Mixed Quarterly Results Amid Margin Pressures

Quarterly Financial Performance: Revenue and Profitability Under Pressure

The December 2025 quarter saw Sukhjit Starch & Chemicals Ltd grapple with deteriorating profitability. Profit Before Tax excluding other income (PBT less OI) stood at ₹2.46 crores, marking a steep decline of 42.1% relative to the average of the preceding four quarters. Similarly, Profit After Tax (PAT) contracted by 45.3% to ₹3.13 crores over the same comparative period. This sharp fall in earnings highlights the challenges the company faces in sustaining margin expansion amid a competitive agricultural products sector.

While the company’s financial trend score improved slightly from -20 to -17 over the last three months, it remains firmly in negative territory, reflecting ongoing operational headwinds. The return on capital employed (ROCE) for the half-year period hit a low of 6.21%, underscoring the limited efficiency in deploying capital to generate profits.

Cash Position and Interest Costs: A Tale of Contrasts

On a positive note, Sukhjit Starch’s cash and cash equivalents reached a record ₹16.09 crores at the half-year mark, providing a liquidity cushion amid challenging market conditions. However, this strength is offset by rising interest expenses, which surged by 27.73% to ₹16.86 crores over the latest six months. The elevated interest burden is a significant drag on profitability and raises concerns about the company’s debt servicing capacity going forward.

Non-operating income accounted for 41.15% of the company’s PBT in the quarter, indicating that a substantial portion of earnings is derived from sources outside core operations. This reliance on non-operating income may not be sustainable and could mask underlying operational weaknesses.

Stock Price Movement and Market Comparison

Sukhjit Starch’s share price closed at ₹168.00 on 13 Feb 2026, down 6.67% from the previous close of ₹180.00. The stock’s 52-week high and low stand at ₹238.00 and ₹143.80 respectively, indicating significant volatility over the past year. Intraday trading on the day ranged between ₹166.40 and ₹189.00, reflecting investor uncertainty amid mixed financial signals.

Comparing the stock’s returns with the Sensex reveals underperformance across multiple time horizons. Over the past week, the stock declined 6.01% while the Sensex gained 0.43%. Year-to-date, Sukhjit Starch has fallen 9.48% against a 1.81% rise in the Sensex. The one-year return is particularly stark, with the stock down 18.09% compared to the Sensex’s 9.85% gain. Even over three and five years, the stock lags the benchmark, delivering -14.96% and +80.06% respectively, versus Sensex returns of +37.89% and +62.34%. Over a decade, however, the stock has outperformed the Sensex with a 194.61% gain compared to 264.02% for the index, highlighting a longer-term growth trajectory tempered by recent setbacks.

Mojo Score and Analyst Ratings

MarketsMOJO assigns Sukhjit Starch a Mojo Score of 37.0, categorising it as a Sell with a recent upgrade from a Strong Sell rating on 23 Dec 2025. The market capitalisation grade stands at 4, reflecting a mid-tier valuation within its sector. The upgrade in rating suggests some improvement in financial metrics, but the overall outlook remains cautious given the negative financial trend and margin pressures.

Investors should note that the company operates within the Other Agricultural Products sector, which is subject to commodity price fluctuations, regulatory changes, and seasonal demand variations. These factors contribute to the volatility in earnings and stock performance.

Outlook and Investor Considerations

Despite the slight improvement in the financial trend score, Sukhjit Starch & Chemicals Ltd faces considerable challenges in reversing its earnings decline and margin contraction. The company’s elevated interest expenses and low ROCE highlight operational inefficiencies and financial strain. While the strong cash position offers some respite, it may not be sufficient to offset the pressures from rising costs and subdued profitability.

Investors should weigh the company’s historical performance against recent trends. The stock’s long-term returns have been respectable, but the recent underperformance relative to the Sensex and sector peers warrants caution. The reliance on non-operating income to bolster profits further complicates the earnings quality assessment.

Going forward, monitoring quarterly results for signs of margin stabilisation, revenue growth, and debt reduction will be critical. Any meaningful improvement in operational efficiency or cost control could help restore investor confidence and support a re-rating of the stock.

Sector Context and Competitive Landscape

The Other Agricultural Products sector remains competitive, with companies facing input cost volatility and fluctuating demand patterns. Sukhjit Starch’s performance should be analysed in the context of sector-wide trends, including commodity price movements and regulatory developments. Peer comparison tools can provide valuable insights into relative valuation and growth prospects within this space.

Conclusion

Sukhjit Starch & Chemicals Ltd’s December 2025 quarter reflects a company in transition, grappling with profitability pressures and rising costs despite a solid cash position. The downgrade in financial trend from very negative to negative, coupled with a modest Mojo Score upgrade, signals cautious optimism but underscores the need for operational improvements. Investors should remain vigilant and consider alternative opportunities within the sector while tracking the company’s progress in upcoming quarters.

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