Indian Credit Rating Agency sees sugar mills rebounding thanks to ethanol

In India, the Indian Credit Rating Agency (ICRA) expects the credit profile of integrated sugar mills to witness material improvement in FY2023 aided by improving inventory position and higher profits from higher ethanol supplies post commissioning of enhanced distillery capacities. While higher ethanol sales, especially from B-heavy molasses, would drive the revenues and operating profits expansion, reduced inventory levels would curtail industry’s dependence on borrowings thereby strengthening the coverage metrics of the integrated sugar mills.