1) The outlook for the sugar sector in India was revised to stable from negative, as south India-based sugar mills were expected to improve their credit profiles in FY15, while UP-based mills would continue to struggle with high leverage. 2) South India-based mills were forecast to have positive sugar segment profitability in the range of INR0.5-1/kg in FY15, compared to losses for UP-based mills of INR1-1.5/kg. 3) The global sugar surplus was expected to persist in the 2014-15 season (SS15) but at a reduced level from the estimated 5 million tons in the 2013-14 season (SS14), keeping international

1. Corporates
www.indiaratings.co.in 1 April 2014
Food, Beverage & Tobacco
2014 Outlook: Sugar Sector
North South Divergence More Distinct
Outlook Report
Outlook Revision: India Ratings & Research (Ind-Ra) revised its FY15 outlook to negative to
stable from negative for the sector and the companies within the sector. The outlook revision
reflects the improvement in the credit profiles of millers based in south India from FY14 levels.
However, the Uttar Pradesh (UP) based mills will likely continue to struggle with higher
leverage though Ind-Ra anticipates limited deterioration.
In spite of the pricing pressure due to the global sugar surplus for the season October 2013 to
September 2014 (SS14) and the expected surplus in SS15, south India-based mills’ estimated
sugar segment profitability (excluding by-products) is expected to turn positive (in the range of
INR0.5/kg-INR1/kg) for FY15. While UP based peers are expected to continue registering
losses in the segment (INR1/kg-INR1.5/kg). Further, factoring in by-product realisations
(especially ethanol), companies are expected to continue to exhibit a similar regional
divergence.
Limited Downside to Global Price: Ind-Ra expects the global surplus situation to extend to
SS14 and SS15. The Food and Agriculture Organisation (FAO) of the United Nations has
pegged the global sugar surplus for SS14 at 5mmt. However, so far the depreciation in the
currencies of the major sugar producing countries (especially Brazil) has cushioned their
domestic sugar producers against the fall in global sugar prices. In addition, respective
government support (such as minimum support prices, incentives) has prevented any
correction in sugar supply adjustment as warranted by the fall in prices.
Ind-Ra expects the global sugar surplus to prevail in SS15 but contract substantially from the
current 5mmt level. The agency believes that assuming no further depreciation in currencies of
sugar producing/exporting countries, the prevailing low prices may persuade producers to
reduce acreage thereby impacting global surplus significantly as compared to SS14.
The global stock to use ratio for SS15 is unlikely to rise beyond the 41.5% estimated for SS14
and thus the agency estimates international sugar realisations to rein between 15-16 cents per
pound in 2014.
Cane Price Distortion Props Volumes: The Commission for Agriculture Costs and Prices
(CACP) has recommended a support price of INR220/qtl for SS15 (SS14: INR210/qtl). The
State of Uttar Pradesh follows a state advised price (SAP) which was at a premium of around
33% to the fair and remunerative price (FRP) (SS14: INR280/qtl). Given that 2014 is an
election year, millers would be forced to pay a premium to the announced support prices
making the crop more lucrative as compared to other cash crops. ISMA estimates domestic
sugar production of 23.8mmt for SS14 and 25mmt for SS15 (similar to SS13 levels) to translate
into a domestic stock-to-use ratio of 34.5% for SS14 and 33.9% SS15 (SS13: 38.3%).
Factoring in Ind-Ra’s base case assumption for international sugar prices, domestic sugar
prices for FY15 should remain largely stable as compared to FY13 prices.
Exports Unviable Despite Subsidy: Ind-Ra believes that in spite of the INR3,333/mt export
subsidy on raw sugar, Indian raw sugar would still continue to be more expensive as compared
to its international counterpart.
Sector Outlook
NEGATIVE TO STABLE
(2013 MID-year:
NEGATIVE)
(2013: Negative)
 South-based millers to stay afloat
North-based millers to slide
 Higher By-product realisations pull
up operating profitability
 Export of raw sugar unviable
Related Research
2013 Outlook: Sugar (January 2013)
Other Outlooks
Outlook 2014
Analysts
Janhavi Prabhu
+91 22 4000 1754
janhavi.prabhu@indiaratings.co.in
Ankit Bhembre
+91 22 40001 774
Deep Mukherjee
+91 22 4000 1724
deep.mukherjee@indiaratings.co.in

2. Corporates
2014 Outlook: Sugar Sector
April 2014
2
The export may be viable only if global sugar prices range from 18-19 cents per pound, which
is unlikely in 2014.
North India-Based Mills Slide: For SS15, the cost of sugar produced is expected to be 3%-
4% higher after declining by 2%-3% in FY14. Factoring a premium of INR2/kg-INR3/kg on the
export parity price of INR29/kg-INR31/kg, UP-based mills would still continue to register sugar
segment losses of negative INR1/kg-INR1.5/kg (similar to FY14 estimated levels). In spite of
negligible capex millers might have to draw down additional loans to fund operations,
consequently impacting their credit metrics.
South India-Based Mills Stay Afloat: South India-based millers are expected to perform
better as compared to FY14 with sugar segment profitability improving in the range of
INR0.5/kg-INR1/kg due to the lower cost of opening inventory (crushed in SS14) and better by-
product realisations. Their improved profitability and negligible capex would help them improve
their credit profiles as compared to FY14 levels and service debt rather comfortably as
compared to their UP-based peers.
Liquidity Pressures: However, the agency notes that both UP and south India-based mills
would continue to be exposed to liquidity pressures to clear farmer dues at the earliest
providing limited inventory holding power. Liquidity woes for the UP based millers would be
more pronounced.
Delay in achieving Ethanol Blending Targets: Though ethanol sales are expected to provide
diversification, the benefit is limited only to a few integrated players. This is because of the
considerable time taken to fix ethanol prices, the limited orders placed (250m litres as against
offered volumes of 620m litres) in spite of ethanol being cheaper than fossil fuel and the delay
in achieving the blending target of 5% (presently only 2%) by oil marketing companies.
What Could Change the Outlook
Rangarajan Committee Recommendations: Implementation of the committees’
recommendations would benefit the UP-based mills more than their southern counterparts and
on a whole would be positive for the sector. The linking of raw material cost (cane prices) to the
realisation of sugar and by-products would help millers improve their overall profitability even
during a down-cycle. However, the implementation of the committees’ recommendations
seems unlikely in the short- to medium-term.
Sugar up cycle: A sharp decline in sugar production compared to estimated end-SS15 levels
may rapidly change the current surplus scenario to one of deficit. In such an event, sugar
prices could surge resulting in higher margins and improved credit profiles of sugar companies.
International prices diving to new lows: Any further deterioration in prices to below 15-16
cents per pound based on a higher-than-expected global surplus could further dent profitability
and impact credit profiles.

3. Corporates
2014 Outlook: Sugar Sector
April 2014
3
Key Issues
Global Scenario
Figure 1
Global surplus for SS14 and SS15
Global Production Levels
Ind-Ra also expects the global surplus situation to stretch in SS14 and to SS15 but the level of
surplus may shrink considerably in SS15. Assuming no further depreciation in currencies of
sugar producing/exporting countries, prices in the range of 15-16 cents per pound could
persuade producers to reduce acreage or divert more sugar towards ethanol production
thereby impacting the global surplus significantly as compared to SS14.
FAO reports suggest a global surplus for SS14 with supply out-pacing demand by 5mmt.
For SS14, FAO report indicates marginally higher global sugar production of 180.2mmt (SS13:
179.5mmt). This would be due to higher acreage, and favourable climatic conditions
contributing to higher sugar production in Thailand (+11% yoy), South Africa (+15% yoy) as
well as stable production levels in India and Brazil. The result of this would be to off-set the
expected decline in sugar production in the Russian Federation (-21.1% yoy) where the planted
area shrunk 20% due to the shift in acreage to other grains over beet. Consumption on the
other hand is expected to remain at 175.4mmt in SS14.
Regional Play
Brazil, which accounts for 45% of the overall global sugar trade is expected to produce an
output similar to that of last season for SS14. Unfavourable weather developments in the
region reduced the yield, restricting any scope of a bumper harvest. Higher sugar production
was further constrained by diversion towards ethanol production (particularly anhydrous
ethanol) due to the government’s mandatory requirement to blend 25% anhydrous ethanol with
gasoline (implemented from May 2013). During April 2013 to January 2014 the ethanol to sugar
ratio was 54.7:45.3 as against 50.4:49.6 in April 2012-January 2013.
All these factors put together may still result in stock-to-use ratio being maintained at levels
close to or marginally higher than those in SS13 (41.0%) for both SS14 (41.5%) and SS15
(41.6%).
In SS14, Brazil, Thailand and India are expected to dominate global sugar exports with
25.7mmt (25.6mmt), 7.9mmt (7.5mmt) and 2.0mmt (0.8mmt) of sugar exports, respectively. On
the other hand, China and Indonesia are expected to remain large importers on account of
decline in their local production levels.
Currency Movement Impact
The agency notes that though global surpluses are expected to throng the market, the demand
from importing countries would largely be dependent on the currency strength of the importing
country relative to the US dollar. Adverse currency movements with respect to the US dollar
could result in costlier imports and restrained demand.
0
10
20
30
40
50
-40
-20
0
20
40
SS 07 SS 08 SS 09 SS 10 SS 11 SS 12 SS 13 SS 14E
Price change yoy (LHS) Stock to use (RHS)(In %)
Global Raw Sugar Prices Witnessed a Downward Trend Post SS11
on Stock Build-up
Source: FAO Estimate, Ind-Ra
(In %)
Figure 2
Figure 3
World Sugar Production
(Million tons) 2012/13 2013/14
Asia 66.5 67.4
Africa 11.4 12.2
Central America 14.3 14.5
South America 39.6 39.7
North America 8.5 8.3
Europe 26.6 25
Oceania 4.7 4.8
World 179.6 180.2
Developing Countries 137.2 139.2
Developed Countries 42.4 41
Source: FAO Reports

4. Corporates
2014 Outlook: Sugar Sector
April 2014
4
Sugar Prices Unlikely to Fall Further
Price Range
Given the global demand-supply dynamics and stock levels, Ind-Ra expects the average
international raw sugar prices for 2014 to remain between 15 cents/pound-16 cents/pound.
Higher stock to use ratio in SS13 resulted in a 21.6% yoy decline in average raw sugar prices
to 18 cents/pound. In 1QSS14, average raw sugar inched up marginally by 5.3% qoq to 17.6
cents/pound after hitting a low of 16.7 cents a pound (lowest in 13 quarters) but till remained
closer to the lower levels witnessed in the prior quarter.
Anticipating higher global surplus for SS14, Brazilian exporters are currently liquidating raw
sugar inventory at a discount to New York Future prices. This is expected to exert pressure on
international raw sugar prices till the end of 9M2014.
This move has helped raw sugar refiners, who are currently taking delivery from the physical
market and selling white sugar at a premium in markets such as Africa and Middle East where
sugar prices are more lucrative, improve profitability.
Brazilian Sugar-Ethanol Mix
Raw sugar prices to an extent are influenced by Brazil’s mix of sugar and ethanol for the
season of 2014/2015 which would determine the exportable surplus in the global market.
Based on April-December 2013, ethanol realisations per ton of cane crushed in Brazil have
been more lucrative as compared to sugar realisations in the export market. This has prompted
producers to divert more cane towards ethanol production.
According to industry reports, Brazil could lose 1.5mmt-2mmt of sugar production if the
mandated share of ethanol into gasoline were to be raised to 27.5% from 25% at present. This
would align the global sugar supply closer to demand levels and provide support at or above 17
cents/pound; close to or higher than the cost of production for most exporting countries.
Figure 4
Average sugar realisations in local currencies of exporting countries such as Brazil in SS13
were still lucrative given that significant currency depreciation from SS12 and SS11 off-set
decline in international raw prices during the similar period. Hence, the agency expects Brazil
to continue to export sugar at levels similar to those of last year.
Domestic Scenario
Cane Price Distortions Prop Cane Production
For SS14, an FRP of INR210/quintal was announced by the government while the state
government of UP announced an SAP of INR280/quintal. For SS15, the CACP has
recommended a price of INR220/quintal (4.7% higher than the prior year’s). Industry sources
indicate that undeterred by piling cane arrears from sugar mills, farmers continue with existing
sugarcane ratoons, since the current governmental support prices makes it more lucrative than
other competing cash crops.
0
5
10
15
20
25
30
35
0.0
0.5
1.0
1.5
2.0
2.5
Jan 09 Aug 09 Mar 10 Sep 10 Apr 11 Oct 11 May 12 Dec 12 Jun 13 Jan 14
Anhydrous Alcohol (BRL/litre) (LHS) Sugar realisations (BRL/Kg) (LHS)
International raw sugar (RHS)(BRL)
Weakening in Currencies of Exporting Countries Have Off-set Decline in Prices
Last four months average (New SS14) BRL raw sugar realisations were 3.2%YoY higher led by currency
depreciation
Source: Unica, Bloomberg
(Cents/Pound)
Figure 5
Cane Acreage
(In million hectares)
India UP Maharashtra Karnataka
SS10 4.18 1.97 0.76 0.34
SS11 4.89 2.13 0.97 0.42
SS12 5.04 2.16 1.02 0.43
SS13 5.23 2.42 0.94 0.43
SS14 5.15 2.51 0.94 0.38

5. Corporates
2014 Outlook: Sugar Sector
April 2014
5
Higher Cane Acreage in UP
In states, particularly UP, higher cane acreage (3.6% yoy to 2.5 million hectares) is expected to
translate into higher cane availability and consequently production albeit marginally lower yields
due to excess rains. As such, UP governments kept the state advised price (SAP) unchanged
at INR280/quintal (same as in SS12-SS13) .Production for SS14 will be largely supported by
the state (2.9% higher than from a year ago) albeit decline in production levels in Maharashtra
(negative 2.5% yoy) and Karnataka (negative 7.7% yoy).
Non-UP Cane Acreage Lower
Maharashtra’s sugar production is attributed to cane acreage remaining flat (negative 0.1%
yoy) and yield levels closer to those of SS13 with higher acreage under ratoon crop. Karnataka
on the other hand (which accounts for 13.8% of India’s sugar production) is expected to
witness a drastic decline of 10% yoy to 0.4m hectares due to continuous drought in key
growing regions (within the state) for the past two years.
Figure 6
Inventory Levels to Remain High
Ind-Ra expects domestic sugar supply to outpace demand resulting in higher closing inventory
levels for both SS14 and SS15. Based on projected demand growth of 2.1% over SS13 to
SS15, the country is expected to close with stock-to use of 34.5% and 33.9% for SS14 and
SS15 respectively (SS13: 38.3%) still higher than the deficit years of SS09 and SS10.
According to ISMA’s revised estimates, India is expected to close SS14 with 23.8mmt (SS13:
25.1mmt) of sugar production. This coupled with 8.8mmt of opening stock levels is expected to
outpace the estimated domestic consumption requirement of 23mmt to result in closing stock of
8.1mmt (after factoring in 1.5mmt of exports). The agency expects Indian production of 25mmt
for SS15.
Figure 7
0
1
2
3
4
5
6
SS01 SS02 SS03 SS04 SS05 SS06 SS07 SS08 SS09 SS10 SS11 SS12 SS13 SS14
India UP Maharashtra Karnataka
(USD/mt)
UP Cane Acreage to Witness Increase Whilst Karnataka Witnesses Decline
Source: ISMA estimates
-40
-20
0
20
40
60
0
10
20
30
SS07 SS08 SS09 SS10 SS11 SS12 SS13 SS14E SS15E
Sugar production (LHS) Sugar consumption (LHS)
Stock to use (RHS) Price change yoy (RHS)
Domestic Stock-To-Use Ratio to Remain High
(m tons)
Source: ISMA estimates, Ind-Ra estimates
(%)
Figure 8
Contribution to all India
Sugar Production
(%) UP Maharashtra Karnataka
SS10 27.4 37.4 13.5
SS11 24.1 37.1 15.1
SS12 26.5 34.1 14.7
SS13 29.8 31.9 13.8
SS14 30.8 31.2 12.8

6. Corporates
2014 Outlook: Sugar Sector
April 2014
6
Domestic Sugar Prices Linked to International Prices to Be under Pressure
During 1QSS14, domestic sugar prices declined to INR31.1/kg from INR34.4/kg in 4QSS13.
The decline was driven by higher opening stocks and 23.8mmt of production during the year.
Ind-Ra believes that the floor for domestic prices (assuming continuation of current relevant
regulations and tariff) will be INR29/kg-INR31/kg in 2014. This being the total cost of imported
sugar (includes 15% import, freight and other processing costs).
Figure 9
Import Parity Table
Price parity
Raw sugar Price (Cents per pound) 15.5
Currency exchange rate 61.0
Convert Pound to Kg 2.20
Raw sugar INR/Kg 20.8
Landed cost of Raw Sugar (INR/ton) 20,844.7
Freight cost (INR/ton) 2,135.0
Import Duty (INR/ton) 3,447.0
Total cost at Port 26,426.6
Transportation cost (INR/ton) 750.0
Conversion Raw to White (INR/ton) 2,500.0
Floor Price for Imported Raw Sugar 29,676.6
Cost per Kg 29.7
The agency notes that sugar production will halt in March 2014 - the end of the crushing
season. Since domestic sugar prices during the off season are generally higher than those
seen during the season, the prices are likely to move up marginally after March 2014.
Profitability Impact
North Dives:
For SS14, the UP government kept state advised prices (SAP) unchanged as compared to last
year’s INR280/quintal. However, it provided various incentives such as the waiver of purchase
tax, society commission etc. Total benefit amounted to INR11/quintal. Factoring in the benefit,
per kg sugar cost would be in the range of INR33/kg-INR34/kg for SS14. For SS15, this would
be in the range of INR34kg-INR35/kg.
Considering sugar realisations of INR31/kg-INR33/kg (INR2/ premium/kg -INR3 premium/kg),
the overall sugar profitability for FY15 is expected to be a negative INR1/kg-INR1.5/kg (FY14:
negative INR1/kg-INR1.5/kg). Though contribution from by-products such as co-generation and
molasses/distillery are expected to provide some cushion, the support may not to be enough to
fully compensate decline in operating profitability. This is in spite of better capacity utilisation
due to increased cane availability on account of higher acreage.
For FY13, the median revenues (for eight UP-based sugar companies aggregating FY13 and
SS13) increased by 20% yoy. The abolishing of levy sugar sale in October 2012 has helped
companies garner higher realisations for the six months ended March 2013 compared to the
same period in the prior year However, post the release mechanism decontrol in April 2013,
many sugar players flooded the market with their produce which squeezed realisations post
March 2013. Average sugar prices post March between April-September 2013 were 4.1%
lower yoy as compared to a year ago. This impacted revenue growth for most players.
Sugar segment profitability was impacted by losses and inventory write-offs in the segment in
spite of improved profitability in the distillery and co-gen segment. The median operating
profitability grew by 142.7% yoy and overall median margins expanded by 180bps yoy.
For calculating the import parity price,
the agency has factored in the
incidental costs (e.g. import duty,
transportation and processing charges)
into the assumed international raw
sugar prices to arrive at the price in the
domestic market
Figure 10

7. Corporates
2014 Outlook: Sugar Sector
April 2014
7
South stays afloat
Similarly for SS14, the FRP was revised upward to INR210/quintal (at recovery of 9.5%) from
INR170/quintal in SS13. For SS15, CACP has recommended a price of INR220/quintal.
In Maharashtra and Karnataka where the recoveries are marginally higher in the range of
10.5%-11.5%, the cost of sugar is expected to be in the range of INR28/kg-INR29/kg in FY14
and INR29/kg-INR30/kg in FY15. This is expected to improve sugar margins by INR0.5/kg-
INR1/Kg due to lower cost of opening inventory (crushed in SS14) and better by-product
realisations. However, the sugar segment’s profitability for FY15 would still continue to remain
below FY13 levels.
South India-based companies registered median revenue growth (eight South India-based
companies with financial year end in March) of 13.3% yoy for FY13 led by improved domestic
realisations. Median margins remained largely stable (50 bps lower). Operating profitability was
driven by higher contribution from the by-product segment. Median by-product contribution to
overall operating profitability remained at 60% (58.5% last year), while the sugar segment’s
profitability remained constrained by higher input costs.
Exports Unviable for India
Based on the assumption of 15.5 cents per pound, the domestic raw sugar prices fare 19%-
20% higher than international raw sugar prices. This is in spite of factoring in the subsidy of
INR3,333/mt (under the government initiated scheme to make raw sugar exports lucrative to
clear domestic inventory of 4mmt) and by-product sales. While on the other hand, the
white/refined sugar prices are trading 4%-5% below the international white sugar prices post
factoring the USD25/mt premium enjoyed by Indian white sugar on account of proximity to
certain regions.
The agency believes that if the sugar price moves upwards of 19 cents per pound of raw sugar
it would make export of raw sugar viable. On the other hand, 23%-24% depreciation in the
domestic currency would be required to make the export of domestic raw sugar viable.
Alternatively, currency appreciation would be a strong negative for the industry. If this were to
happen, the agency expects the government to step-in to implement measures to correct the
situation.
Export Parity Table
Figure 11
50
150
250
350
450
550
650
750
850
950
Jan 09 Aug 09 Feb 10 Sep 10 Apr 11 Nov 11 May 12 Dec 12 Jul 13 Feb 14
LIFFEE white sugar prices Raw sugar prices Indian white sugar(USD/mt)
Decline in Sugar Prices Amid Global Surplus for SS14 & SS15
Surplus in India and Brazil
Source: ICE, Bloomberg

8. Corporates
2014 Outlook: Sugar Sector
April 2014
8
Figure 12
Export Parity Table
Based Non SS14 Exported Raw Sugar Exported White Sugar
Cost of production* (INR/mt) (a) 27,774.8 29,000.0
Transportation cost (INR/mt) (b) 750.0 750.0
Handling cost (~2%) (c) 555.5 580.0
Total FOB to Port (INR/mt) (a+b+c) 29,080.3 30,330.0
Total FOB to Port (USD/mt) # (d) 476.7 497
Factoring in by-product realisations (USD/mt) (e) 13.5 13
Subsidy ('f) 54.6
Net FOB (d-e-f) 408.6 483.7
Assumed Price @ 341.7 466.7
Difference 19.6% 3.6%
* Based on domestic cost of production for SS14
# converted @ USD = INR 61
'--@ Includes premium for Asian sugar. Also assumed international sugar price is 15.5 cents/pound
The difference above, explains the extent by which the cost of domestically produced sugar is compared to the
international sugar realisation.
Capex Spends Subdued
According to the Centre for Monitoring Indian Economy Pvt Ltd, the sector expects to see cane
crushing capacity additions to the tune of 63,300 TCD with peak capacity additions in 2014-
2015. However, given the poor cash flows and tight liquidity position of most players in SS14,
the capex plans are likely to be deferred. Capex spends by large sugar players are likely to be
negligible.
Pressure on Liquidity and Credit Profile
South India-based mills to outperform: The agency expects the credit profiles of South
India-based millers for FY15 to improve marginally as compared to estimated FY14 levels but
to remain lower as compared to FY13 levels. Improvement in operating profitability is expected
to off-set interest expenses and working capital requirements (especially inventory related) to
translate into improvement in operating cash flows. This would entail lower debt drawls or
repayment thereby resulting in an improvement in credit profile of companies from FY14 levels.
North continues to Suffer: While on the other hand the UP-based millers’ lower profitability
and poorer cash flow position would result in players resorting to additional debt drawdowns.
This in turn could result in deterioration in credit profiles as compared to FY14.
In FY13, the overall median net debt of UP-based sugar companies remained more or less at
same levels. However, players with September financial year end witnessed a deterioration on
the back of decline in operating profitability for reasons discussed above while March ended
companies witnessed an improvement in their credit profiles led by an improvement in
operating profitability.
Companies which have higher upcoming repayments could face refinancing risk. However, the
companies rated by Ind-Ra would be in a better position to service their debt obligations.
Ethanol Blending Programme Implementation Faces Hurdles
Ind-Ra believes that sugar manufacturers can minimise the impact of the rising cost pressures
and supply glut through selling ethanol. The move from ethanol’s fixed price of INR27/litre to
free tender based pricing where OMCs have fixed the price at INR 44/litre is also expected to
help integrated sugar companies (especially in UP) wipe-out sugar segment losses as well as
support operating profitability of south India-based mills. However, in spite of being cheaper
than petrol, OMCs have placed order for only 250m litres of ethanol against offered volumes of
620m indicating that not all fully integrated sugar companies would be able to benefit from the
blending programme.
India has only achieved 2% of its blending target at the beginning of the current fiscal after a
decade of the 5% blending programme first getting approved and endorsed at different stages.
Thus, in spite of the government set target of achieving 20% mandatory ethanol blending with
fossil fuels in 2017, implementation may be an issue. Also, the considerable time taken to fix
prices has delayed ethanol off-take by OMCs adding to the liquidity woes of millers.
The company has compared the
domestically produced raw sugar cost
net of by-product realizations in a non-
integrated set-up with that of assumed
international raw sugar realizations

9. Corporates
2014 Outlook: Sugar Sector
April 2014
9
Appendix
Figure 13
130
140
150
160
170
180
190
SS 07 SS 08 SS 09 SS 10 SS 11 SS 12 SS 13 SS 14E
Global production Global consumption
Global Production and Consumption Trends Since SS07
(m tons)
Source: FAO Estimate, Ind-Ra

10. Corporates
2014 Outlook: Sugar Sector
April 2014
10
Appendix
Figure 14
Issuer Ratings
Issuer Rating/Outlook (current)
Shree Renuka Sugars Limited IND A+/Negative
Tirupati Sugar Limited IND BB-/Stable/IND A4+
Piccadily Agro Industries Limited IND BB+/Stable/IND A4+
Cosmos Industries Ltd IND B+/Stable/IND A4
Yadu Sugar Limited IND B/Stable/IND A4
The Seksaria Biswan Sugar Factory Limited IND A-/Stable/IND A2+
Novel Sugar Limited IND BB/Stable/IND A4+
Source: Ind Ra

11. Corporates
2014 Outlook: Sugar Sector
April 2014
11
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nature of relevant public information, access to the management of the issuer and its advisers, the availability of pre-existing third-party
verifications such as audit reports, agreed-upon procedures letters, appraisals, actuarial reports, engineering reports, legal opinions and other
reports provided by third parties, the availability of independent and competent third-party verification sources with respect to the particular
security or in the particular jurisdiction of the issuer, and a variety of other factors. Users of India Ratings’ ratings should understand that
neither an enhanced factual investigation nor any third-party verification can ensure that all of the information India Ratings relies on in
connection with a rating will be accurate and complete. Ultimately, the issuer and its advisers are responsible for the accuracy of the
information they provide to India Ratings and to the market in offering documents and other reports. In issuing its ratings India Ratings must
rely on the work of experts, including independent auditors with respect to financial statements and attorneys with respect to legal and tax
matters. Further, ratings are inherently forward-looking and embody assumptions and predictions about future events that by their nature
cannot be verified as facts. As a result, despite any verification of current facts, ratings can be affected by future events or conditions that were
not anticipated at the time a rating was issued or affirmed.
The information in this report is provided "as is" without any representation or warranty of any kind. A rating provided by India Ratings is an
opinion as to the creditworthiness of a security. This opinion is based on established criteria and methodologies that India Ratings is
continuously evaluating and updating. Therefore, ratings are the collective work product of India Ratings and no individual, or group of
individuals, is solely responsible for a rating. The rating does not address the risk of loss due to risks other than credit risk, unless such risk is
specifically mentioned. India Ratings is not engaged in the offer or sale of any security. All India Ratings reports have shared authorship.
Individuals identified in a India ratings report were involved in, but are not solely responsible for, the opinions stated therein. The individuals
are named for contact purposes only. A report providing a rating by India Ratings is neither a prospectus nor a substitute for the information
assembled, verified and presented to investors by the issuer and its agents in connection with the sale of the securities. Ratings may be
changed or withdrawn at any time for any reason in the sole discretion of India Ratings. India Ratings does not provide investment advice of
any sort. Ratings are not a recommendation to buy, sell, or hold any security. Ratings do not comment on the adequacy of market price, the
suitability of any security for a particular investor, or the tax-exempt nature or taxability of payments made in respect to any security. India
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dissemination of a rating by India Ratings shall not constitute a consent by India Ratings to use its name as an expert in connection with any
registration statement filed under the United States securities laws, the Financial Services and Markets Act of 2000 of the United Kingdom, or
the securities laws of any particular jurisdiction including India. Due to the relative efficiency of electronic publishing and distribution, India
Ratings research may be available to electronic subscribers up to three days earlier than to print subscribers.
The ratings above were solicited by, or on behalf of, the issuer, and therefore, India
Ratings has been compensated for the provision of the ratings.