Decontrol expected to strengthen sugar companies' profits by 50%: CRISIL

SME News, Friday, Oct 26, 2012 14:08:30 PM IST

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MUMBAI: The profitability of sugar companies rated by CRISIL is expected to rise by 50% if proposals of Dr C Rangarajan Committee relating to complete decontrol of the sector witnesses implementation, said a report by the rating agency.

The profitability of sugar firms rated by CRISIL will rise by Rs 600 crore during FY13, if the proposals made by the committee on the net decontrol of the sector are implemented.

This represents about 50% jump in profits for the 47 rated firms over their projected profits under the present regulated scenario, apart from strengthening their credit risk profiles. Sugarcane farmers will be benefiting from decontrol via the reduction in cane arrears.

An expert panel headed by Dr C Rangarajan proposed abolishing state-advised cane prices (SAP) and removal of regulatory control on the sale of sugar in the local market.

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