Kathmandu.Eastern Sugar Mills Limited has 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 947 million 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.According to ICRA’s report, 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 dropped from 8.8 percent in 2024 to 8.3 percent in 2025. Operating profit margin has also shrunk from (OPM) to 15.3 per cent from 9.3 per cent due to sugarcane quality issues.

The government had fixed the minimum support price of sugarcane at Rs 585 per quintal for the fiscal year 2024/25 ( as against Rs 565 in the previous year. The increase in the price of sugarcane has put additionalpressure 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.

The financial condition of the company is still weak, is rated . 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 of between total loans and operating profits has increased from to 5.3 to 9.6. The company’s working capital requirement is also increasing. The ratio of working capital to operating income 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 revenue is mainly dependent on the sale of sugar.It also states that the business of the sugar industry is cyclical and risky by nature as sugarcane farming is dependent on weather, rainfall, diseases/pests and other agricultural/climate-induced risks.

Stern Sugar Mills Limited was established in 1994 and started 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 promoted by two business groups, Golchha Group and Vishal Group. Apart from this, various institutional and individual investors have also invested in the company.