Eastern Sugar Mills crosses Rs 1.5 billion turnover

Kathmandu. Eastern Sugar Mills Limited has made a turnover of Rs 1.49 billion in the last fiscal year. The company’s turnover increased to Rs 1.40 billion compared to Rs 1.40 billion in the previous year.

According to ICRA Nepal’s report, the company had a turnover of Rs 1.12 billion in 2023 and Rs 94.7 crore in 2022. The Company had processed 191,302 metric tonnes of sugarcane last year.

The company had processed 185,504 metric tonnes of sugarcane in 2024. ICRA said that despite the increase in the volume of sugarcane processing, the decrease in the recovery rate of sugar production has affected the company’s profit.

According to the company, the company’s sugar recovery rate has fallen from 8.8 percent in 2024 to 8.3 percent in 2025. The operating profit margin (OPM) has also shrunk from 15.3 percent to 9.3 percent due to the decline in the recovery rate due to quality problems of sugarcane.

The government had fixed the minimum support price of sugarcane at Rs 585 per quintal for the fiscal year 2024/25 compared to Rs 565 per quintal last year. The increase in the price of sugarcane has put additional pressure on the company’s profit due to the increase in the cost of production.

Likewise, the government has increased the minimum support price of sugarcane to Rs 620 per quintal for the current fiscal year. On the other hand, the customs duty on sugar import has been reduced from 30 percent to 15 percent.

There is a risk that this will affect the competitiveness of the domestic sugar industry and further weaken the profit margins. The company said that the reduction in customs duty on sugar imports has added challenges to the domestic industry. However, the recent ban on sugar exports by India is expected to provide some relief to Nepali industries.

However, the company’s financial position is still weak. The company’s capital structure is under pressure due to accumulated losses and debt-based investments. Debt servicing capacity has declined from 1.1 times in 2024 to 1.0 times in 2025, while interest repayment capacity has also weakened significantly.

Similarly, the ratio between total debt to operating profit (TD-OPBITDA) increased from 5.3 times to 9.6 times. The working capital requirement of the company is also increasing. The ratio of working capital to operating income has increased from 33 percent to 41 percent.

The company said that the lack of diversification of revenue sources is also a risk as the company’s income is mainly dependent on the sale of sugar. The sugar industry is naturally cyclical and risky as sugarcane farming is dependent on weather, rainfall, pests and other agro-climatic risks.

Eastern Sugar Mills Limited was established in 1994 and started its commercial operations in 1996.

The company has a daily processing capacity of 2,500 tonnes. Its sugar production industry is located in Amahibela area of Sunsari district. The company is primarily promoted by two business groups – Golchha Group and Vishal Group. Apart from this, various institutional and individual investors have also invested in the company.