Synopsis: After years of mounting losses driven by collapsing white sugar premiums and an unworkable import-refine-export model, E.I.D. Parry’s Board approved the permanent closure of its wholly owned subsidiary PSRIPL’s Kakinada refinery on March 31, 2026.
A Murugappa Group sugar major is taking a large, deliberate write-down rather than continue funding a structurally broken business. The Board of E.I.D. Parry (India) Limited, at its meeting held on March 31, 2026, simultaneously approved the permanent closure of Parry Sugars Refinery India Private Limited’s (PSRIPL) Kakinada facility and a financial support package totalling Rs 740 crore: a decision that will reshape the company’s consolidated P&L across two financial years.
With a market capitalization of Rs. 14,478.84 crore, the shares of E.I.D. Parry (India) Limited was trading at Rs. 813.20 per share, up 4.86 percent from its previous closing price of Rs. 775.5 per share. It is trading at a P/E of 13.7. Its ROE stands at 9.54 percent and its ROCE at 16.6 percent
Closure Update
PSRIPL’s sugar refinery unit at Kakinada, Andhra Pradesh, has ceased operations effective from the close of business on March 31, 2026. The unit’s business model which is importing raw cane sugar, refining it, and exporting white sugar has been financially unworkable for some time. White sugar premiums over raw sugar have compressed sharply, and the absence of natural gas supply at Kakinada forced PSRIPL to run coal boilers, adding structural cost disadvantages that the refining margin could never absorb.
By March 31, 2025, the subsidiary had accumulated losses of approximately Rs 1,406 crore. Its total estimated liabilities stand at Rs 998 crore, of which R 877 crore are bank borrowings backed by a parent company guarantee meaning E.I.D. Parry’s contingent exposure had already crystallised in practice, even before this board decision.
Financial Support Plan
The Board approved a two-part infusion to settle PSRIPL’s outstanding obligations: an equity investment of up to Rs 610 crore through subscription of shares at face value (Rs10 per share) on a rights basis, expected to be completed by May 31, 2026; and an inter-corporate unsecured loan of up to Rs 130 crore to address residual commitments. The combined outflow is Rs740 crore.
On the P&L, the parent will recognise a financial provision of Rs 655 crore spread across FY 2025-26 and FY 2026-27, along with an impairment charge of Rs 46 crore on the current carrying value of its investment in PSRIPL. Despite its chronic losses, the refinery was not a trivial contributor. PSRIPL accounted for 13.48 percent (Rs 4,262.45 crore) of E.I.D. Parry’s consolidated turnover in FY2024-25.
What the Numbers Signal
The decision to fund closure rather than pursue a sale or distress restructuring suggests the parent assessed residual asset value as insufficient to attract a buyer at a price that would cover liabilities. The Rs 740 crore infusion essentially converts PSRIPL’s bank debt into equity and inter-corporate loans, allowing lenders to exit cleanly while the parent absorbs the loss.
The Rs 877 crore in guaranteed bank borrowings were already a contingent liability on E.I.D. Parry’s balance sheet; this announcement converts contingency into certainty and puts a defined ceiling on the damage. Investors who had been discounting an open-ended liability can now price a closed one.
Business & Financials Overview
E.I.D. Parry (India) Limited, incorporated in 1788 and part of the Murugappa Group, is primarily engaged in sugar manufacturing, nutraceuticals, ethanol, and co-generation, with six sugar plants and one independent distillery across South India. Its most significant strategic holding is a majority stake in Coromandel International Limited, whose farm inputs division contributes the bulk of consolidated profitability. For Q3 FY2026, consolidated sales rose 18.29 percent year-on-year to Rs. 10,316 crore, with net profit up 5 percent at Rs. 437 crore.
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