KM Sugar Mills Limited has announced that the Hon'ble National Company Law Tribunal (NCLT), Allahabad Bench, has scheduled a hearing for July 30, 2026, regarding the Scheme of Arrangement for the demerger of its Distillery Division into its wholly owned subsidiary, KM Spirits and Allied Industries Limited. The joint petition was presented on June 11, 2026. The company has published a notice in newspapers, including the Financial Express and Jan Satta, informing shareholders and creditors about the hearing. Any person wishing to support or oppose the petition must submit their intention to the petitioner's advocate at least two days before the hearing date.

The Board of Directors had previously approved the demerger scheme on August 7, 2025, with an appointed date of April 1, 2026. The proposed share swap ratio is 1 equity share of ₹10 each in KM Spirits and Allied Industries Limited for every 5 equity shares of ₹2 each held in KM Sugar Mills Limited. The demerger is subject to final sanction by the Hon'ble NCLT and other requisite regulatory approvals. Upon effectiveness, the equity shares of KM Spirits and Allied Industries Limited are proposed to be listed on the stock exchanges.

For the financial year ended March 31, 2026, KM Sugar Mills reported a profit after tax of ₹5,342.38 lakhs, a significant increase from ₹3,555.09 lakhs in the prior year. EBITDA rose to ₹10,628 lakhs from ₹8,905 lakhs. Revenue from operations stood at ₹65,838.08 lakhs. The company's market capitalisation as of March 31, 2026, was ₹2,430 million on the NSE and ₹2,460 million on the BSE. Finance costs declined to ₹1,170.17 lakhs from ₹1,816.54 lakhs, reflecting the repayment of term loans during the year. The Board did not recommend a dividend for FY2025-26, citing future deployment of funds for business purposes.

Key Financial Performance

The following table summarises the standalone and consolidated financial performance for the year ended 31st March 2026 versus the year ended 31st March 2025 (Rs. in Lakhs):

Segmental Performance

The company operates across two primary business segments — Sugar and Distillery — with manufacturing facilities located in District Ayodhya, Uttar Pradesh.

Sugar Division: The company crushed 111.63 lakh quintals of sugarcane during the year under review, compared to 110.98 lakh quintals in the previous year. Sugar produced stood at 12,15,930 quintals against 12,35,608 quintals, with average recovery at 10.90% versus 11.01%. Sugar sales amounted to ₹51,425 lakhs compared to ₹52,739 lakhs in the previous year. The Sugar Division operates with a crushing capacity of 9,500 tonnes of sugarcane per day.

Distillery Division: The division produced 91.12 lakh BL of Rectified Spirit and 90.58 lakh BL of ethanol during the year. Ethanol sales were recorded at ₹5,294 lakhs, with sales volume of 88.33 lakh BL, compared to ₹4,276 lakhs and 72.39 lakh BL respectively in the previous year. The Distillery Division, established in 1995, currently operates at an ethanol capacity of 50 KLPD.

Power Division: The company operates a 25 MW bagasse-based co-generation power plant at Motinagar, Ayodhya. Power generated is supplied to Uttar Pradesh Power Corporation Limited (UPPCL). Power sales for the year stood at ₹1,693.50 lakhs compared to ₹759.71 lakhs in the previous year.

Key Financial Ratios

The following table presents significant changes in key financial ratios for the year ended 31st March 2026 versus 31st March 2025:

The gearing ratio improved to 46.27% as at 31st March 2026 from 52.33% as at 31st March 2025, reflecting the reduction in net debt. Total equity stood at ₹39,188.18 lakhs as at 31st March 2026 against ₹33,859.08 lakhs in the prior year. The company's credit rating from Infomerics Valuation and Rating Private Limited for Long-term Bank Facilities was reassigned to IVR A during the year under review.

Demerger of Distillery Division

A significant corporate development during FY2025-26 was the Board-approved Scheme of Arrangement for the demerger of the company's Distillery Division into its wholly owned subsidiary, KM Spirits and Allied Industries Limited, on a going concern basis. The Board approved the scheme at its meeting held on 7th August 2025. The draft scheme received no-objection letters from BSE Limited and the National Stock Exchange of India Limited. The Hon'ble National Company Law Tribunal (NCLT), Allahabad Bench, vide its order dated 24th March 2026, approved the first motion application and directed the convening of meetings of equity shareholders and unsecured creditors.

Key parameters of the proposed demerger are summarised below:

The demerger is subject to final sanction by the Hon'ble NCLT and other requisite regulatory approvals. Upon becoming effective, the equity shares of KM Spirits and Allied Industries Limited are proposed to be listed on the stock exchanges.

Balance Sheet Highlights

Total assets as at 31st March 2026 stood at ₹74,974.44 lakhs on a standalone basis, compared to ₹72,988.38 lakhs in the previous year. Inventories were at ₹38,087.05 lakhs, with sugar inventory carrying a value of ₹33,197.98 lakhs. Short-term borrowings declined to ₹24,621.16 lakhs from ₹26,276.63 lakhs. The paid-up equity share capital remained unchanged at ₹18.40 crores, comprising 9,20,00,170 equity shares of ₹2/- each.

Corporate Social Responsibility

During FY2025-26, the company spent ₹35.63 lakhs on CSR activities, against a statutory obligation of ₹81.20 lakhs. The CSR obligation was set off against excess CSR expenditure carried forward from previous financial years. CSR activities included education of underprivileged students, healthcare and sanitation, and preventive health care, primarily in New Delhi and Ayodhya, Uttar Pradesh. Excess CSR expenditure available for carry forward stood at ₹35.50 lakhs.

Board and Governance

During the year, the company's Chairman, Shri L.K. Jhunjhunwala, passed away on 14th March 2026. The Board expressed its appreciation for his contributions to the sugar industry and the organisation. Mrs. Naina Devi Jhunjhunwala was subsequently appointed as an Additional Director with effect from 18th May 2026, and her appointment as Whole Time Director is proposed at the ensuing 53rd Annual General Meeting scheduled for 28th July 2026. The Board met five times during the financial year. The statutory auditors' report for the year ended 31st March 2026 carried no qualifications, reservations, or adverse remarks.

KM Sugar Mills has scheduled its 53rd Annual General Meeting (AGM) for Tuesday, July 28, 2026, at 11:30 AM IST via video conferencing. The meeting will transact ordinary business, including the adoption of audited standalone and consolidated financial statements for the year ended March 31, 2026, and the re-appointment of directors retiring by rotation. Shareholders will also vote on special resolutions regarding the appointment and re-appointment of key managerial personnel, including Mrs. Naina Devi Jhunjunwala as Whole-Time Director and Shri Aditya Jhunjunwala as Managing Director.

The company has fixed Tuesday, July 21, 2026, as the cut-off date for reckoning the voting rights of members. Remote e-voting will commence at 9:00 AM on Saturday, July 25, 2026, and conclude at 5:00 PM on Monday, July 27, 2026. Shareholders whose names appear in the register of members as of the cut-off date are entitled to vote. The facility for remote e-voting is being provided by MUFG Intime India Private Limited.

Key Meeting Details

The notice and annual report for the financial year 2025-26 are being sent electronically to members whose email addresses are registered with the company or its Registrar and Share Transfer Agent. Physical copies of the notice are being dispatched to members without registered email addresses. The AGM is being held in compliance with the Ministry of Corporate Affairs and SEBI circulars permitting meetings through video conferencing.