Sukhjit Starch Q4 FY25 results: Profit falls 78% as maize costs hit margins

Why Did Sukhjit Starch & Chemicals Stock Fall Sharply After FY25 Earnings?

Sukhjit Starch & Chemicals Limited (NSE: SUKHJITS, BSE: 524542), one of India‘s oldest starch and agro-processing companies, faced a significant sell-off on May 30, 2025, closing at ₹193.17, down by ₹15.44 or 7.40%. This drop came in reaction to its Q4 FY25 and full-year financial results, which revealed persistent pressure on operating margins and profitability despite registering an 8.41% year-on-year growth in revenue from operations.

The stock, which touched a 52-week high of ₹323 on December 10, 2024, remains down over 40% from its peak, though it is still above its 52-week low of ₹172.41 recorded on April 7, 2025. With a traded volume of just 0.49 lakh shares and delivery percentage over 61%, the sharp fall suggests a cautious stance among long-term investors rather than panic selling by institutions.

How Did Sukhjit Starch Perform in Q4 FY25 vs. Prior Quarters?

For the quarter ended March 31, 2025, the company reported revenue from operations of ₹359.14 crore, down from ₹373.35 crore in Q3 FY25 and ₹367.79 crore in Q4 FY24. This sequential and year-over-year decline in the final quarter reflects seasonal weakness and sectoral headwinds.

Earnings before interest, tax, depreciation, and amortization (EBITDA) stood at ₹17.43 crore in Q4, sharply lower than ₹28.21 crore in Q3 FY25 and ₹33.12 crore in the same quarter last year. EBITDA margins plunged to 4.85%, compared to 7.53% in the previous quarter and 9.00% in Q4 FY24. This is one of the steepest quarterly margin declines recorded by the company in recent years.

Profit before tax (PBT) for Q4 FY25 dropped to ₹3.49 crore, while profit after tax (PAT) came in at ₹2.44 crore. In contrast, the previous quarter had posted a PAT of ₹10.80 crore, and Q4 FY24 reported ₹11.46 crore. This 78% decline in bottom-line performance quarter-over-quarter spooked investors despite the absence of any major one-off expense.

What Is Driving the Margin Pressure at Sukhjit Starch?

The company attributed the drop in margins to volatility in maize prices, a key raw material. Maize procurement costs fluctuated due to inconsistent demand from the ethanol sector and weak global trade dynamics, which impacted the overall input cost structure across India’s starch manufacturing ecosystem.

Sukhjit Starch also highlighted that export opportunities were limited during FY25 due to shifting global tariff structures, further tightening revenue realization. In addition, subdued domestic demand from select consumer industries such as paper, FMCG, and personal care compounded the challenge.

K.K. Sardana, Managing Director, noted that although the company delivered resilient topline performance, margin erosion was a direct result of these broader structural inefficiencies and commodity pricing shocks. He added that the situation is expected to stabilize in H2 FY26 due to better crop availability and government interventions.

How Did Sukhjit Perform Over the Full Fiscal Year FY25?

For the full financial year ending March 31, 2025, Sukhjit Starch & Chemicals reported revenue from operations of ₹1,486.19 crore, compared to ₹1,370.86 crore in FY24. This 8.41% increase marked a continuation of its multi-year topline expansion, albeit at the cost of profitability.

EBITDA for the year declined to ₹109.79 crore, from ₹134.39 crore in FY24, translating to an EBITDA margin of 7.39% versus 9.80% a year ago. Profit before tax came in at ₹52.88 crore, down from ₹77.12 crore, while PAT declined to ₹39.48 crore from ₹55.62 crore.

The company also completed a stock split during FY25, sub-dividing each ₹10 face value equity share into two ₹5 shares, enhancing liquidity and retail participation.

What Are Analysts and Investors Saying About the Stock?

While Sukhjit Starch is not actively tracked by large institutional brokers, investor sentiment as observed in market forums and delivery-based trading patterns suggests cautious optimism. The 61.93% delivery ratio on the trading day post-results implies that buyers were primarily long-term investors waiting for value-based entry.

Valuation-wise, the stock is trading at a P/E ratio of 15.15, which remains attractive compared to larger peers in the agri-inputs or specialty ingredients space. However, the lack of near-term earnings visibility, especially on EBITDA front, continues to be a drag on re-rating potential.

Market watchers note that the agro-processing sector has been under broad pressure due to inflationary commodity trends and erratic government policy signals on ethanol blending. As a result, investor flows into the broader “starch chemicals” basket have remained subdued in FY25.

What’s the Growth Outlook for Sukhjit Starch in FY26?

Despite the near-term financial challenges, the company remains optimistic about future prospects. Management stated that expansion of its manufacturing facilities is progressing as scheduled, which will support capacity growth in upcoming quarters. Additionally, improved maize availability from the Rabi and spring harvests—especially in key states like Bihar, Punjab, and Madhya Pradesh—is expected to moderate input cost volatility.

A recent policy move by the Central Government to allocate more rice to ethanol manufacturers may ease pressure on maize prices by reducing competition for feedstock. If realized, this could result in margin normalization by Q3 or Q4 FY26, allowing a rebound in profitability.

Sukhjit’s product portfolio—including starch derivatives like dextrines, sorbitol, maltodextrin, and dextrose monohydrate—serves a wide industrial spectrum. Demand recovery from pharma, processed food, and personal care sectors could further support top-line growth.

Is Sukhjit Starch a Long-Term Value Play or a Value Trap?

The long-term fundamentals of Sukhjit Starch & Chemicals remain grounded in strong execution, backward integration, and a diversified B2B customer base. However, in FY25, the company’s dependency on maize—and the resultant cost inflation—exposed operational vulnerabilities.

While the top-line resilience indicates product demand is intact, profitability recovery will require favorable commodity dynamics and improved price realization. For investors with a multi-quarter horizon, the current price correction offers an opportunity to accumulate selectively, but earnings visibility must improve in the first half of FY26.

Investors looking for higher beta plays or faster earnings turnaround may opt to stay on the sidelines until margin recovery trends are confirmed through future quarterly results.

Final Sentiment Analysis: Neutral-to-Cautious. The FY25 performance highlights strong revenue growth but sharply weaker margins. Investor sentiment remains guarded, awaiting signs of cost stabilization and profitability revival. Institutional flows remain limited, and retail investor interest is likely driven by valuation comfort rather than growth enthusiasm.