Shakarganj Limited (PSX: SML) was incorporated in Pakistan as a public listed company in 1967. The company is in the business of transforming renewable crops such as cotton and sugarcane into value-added products such as textiles, refined sugar, bio fuel, building materials etc.
SML also supplies bio-power generated from bio-gas to the national grid.
The company has its head office located in Lahore with its two production facilities in the Jhang District.
SML is also a holding company of Shakarganj Food Products Limited (SFPL), one of the leading producers of fruit and dairy products.
Pattern of Shareholding
As of December 2025, SML has a total of 125 million shares outstanding which are held by 1301 shareholders. Other local companies have the majority stake of 36.56 percent in the company followed by local general public holding 33.16 percent shares.
Associated companies, undertakings and related parties account for 29.93 percent shares of SML. The remaining shares are held by other categories of shareholders.
Historical Performance (2019-2024)
SML’s topline which expanded until 2022 posted constant decline in the subsequent years. The company never posted a positive bottomline over the period under consideration.
The company started making losses in 2018 due to significant operational losses in its sugar segment because of enormous disparity between sugarcane support price and the overall sugar price set by the government.
The sugar division operated on a lower capacity and hence fixed overhead cost per unit magnified.
Biofuel segment boasted good performance due to attractive margins and twofold increase in the exports, but it couldn’t sustain the bottomline. SML posted gross profit only in 2022. The detailed performance review of the period under consideration is given below.
In 2020, SML’s topline ticked up by 2.44 percent to clock in at Rs.6409.38 million.
While local sales ticked up, export sales drastically fell during the year owing to COVID-19 related protocols observed by many destination countries. During the year, the company started its crushing earlier and crushed 884,724 MT of sugarcane, up 82.51 percent year-on-year.
However, biofuel production decreased by 35 percent to clock in at 9.82 million liters in 2020 due to high prices of molasses. This coupled with higher sugarcane prices resulted in price wars among the mills.
Cost of sales hiked by 12.70 percent in 2020, resulting in gross loss of Rs.671.68 million, up 2424 percent year-on-year. Distribution expense slid by 51.58 percent in 2020 as freight & forwarding charges shrank on the back of reduced sales volume.
Administrative expense inched up by 2.95 percent in 2020 due to higher payroll expense on account of inflationary pressure. SML squeezed its workforce from 1435 employees in 2019 to 1253 employees in 2020. Other expense stayed intact as higher exchange loss and allowance for ECL was almost offset by lower waste water drainage charges incurred during the year.
Conversely, other income mounted by 1127.82 percent in 2020 due to adjustment on account of excise duty on manufacturing of ethanol. SML recorded 34.65 percent lower operating loss to the tune of Rs.293.22 million in 2020. Finance cost ticked up by 2.35 percent in 2020 due to higher discount rate for the first half of the year.
During the year, the company also recorded share of loss worth Rs.538.64 million in equity accounted investee (Shakarganj Food Products Limited) versus share of profit of Rs.5.28 million recorded in 2019.
SML’s net loss stood at Rs.997.58 million, up 36.95 percent year-on-year. This translated into loss per share of Rs.7.98 in 2020 versus loss per share of Rs.5.83 registered in 2019.
In 2021, SML posted a staggering 42.94 percent year-on-year growth in the topline which clocked in at Rs.9161.76 million. Export sales which remained depressed in 2020 owing to COVID-19, rebounded in 2021. As the cane availability was low, the company had to pay the value higher than the notified support price to procure sugarcane and ensure uninterrupted operations.
During the year, SML crushed 1006.075 MT of sugarcane, up 13.79 percent year-on-year. The distillery division couldn’t operate on its optimum capacity due to high raw material prices. The prices of the final product also increased, however, not with the same magnitude as its cost.
This resulted in gross loss of Rs.590.17 million in 2021, down 12.14 percent year-on-year.
Higher sales volume and uninterrupted export sales drove up freight & forwarding charges. This resulted in 79.15 percent escalation in distribution expense in 2021. Administrative expense also surged by 14.22 percent in 2021 due to higher payroll expense. This was the result of inflationary pressure as well as increase in the number of employees to 1300 in 2021.
Other expense mounted by 117.77 percent in 2021 due to loss incurred on the sale of property, plant & equipment particularly its bio gas power plant.
Other income slid by 74.51 percent in 2021 due to high-base effect as the company recorded adjustment on account of excise duty on manufacturing of bio fuel. This overshadowed massive gain recorded on the sale of non-current assets, robust scrap sales and amortization of government grant recorded by the company in 2021.
SML recorded operating loss of Rs.954.37 million in 2021, up 225.48 percent year-on-year. Finance cost dropped by 18.82 percent in 2021 on the back of monetary easing and also because of settlement of a huge portion of outstanding borrowings.
The company also recorded share of gain worth Rs.65.13 million from equity accounted investee. SML registered net loss of Rs.1387.91 million in 2021, up 39.13 percent year-on-year. This culminated into loss per share of Rs.11.10 in 2021.
In 2022, SML posted year-on-year topline growth of 34.53 percent. This resulted in net sales of Rs.12,325.57 million in 2022.
The company’s crushing further increased to 1347.651 MT, up 33.95 percent year-on-year. While high support price of sugarcane remained the source of concern for the company, improved prices resulted in gross profit of Rs.370.71 million and GP margin of 3 percent recorded in 2022. This was the only year over the period under consideration where the company posted gross profit.
Besides, improved selling prices, another reason for posting gross profit was improved distillery operations due to availability of its own molasses which increased the production by 41 percent in 2022.
Distribution expense multiplied by 54.20 percent in 2022 due to higher freight & forwarding charges mainly on account of improved export sales. Administrative expense ticked up by 3.30 percent in 2022 on account of inflationary pressure.
SML significantly streamlined its workforce to 896 employees in 2022 which resulted in lower payroll expense. 76.34 percent lesser other expense recorded in 2022 was due to lower loss incurred on the sale of property, plant & equipment.
Other income also slumped by 29.11 percent in 2022 predominantly due to lower gain recorded on the sale of non-current assets. Operating loss dwindled by 93 percent to clock in at Rs.66.04 million in 2022. Finance cost enlarged by 22.28 percent in 2022 due to monetary tightening.
Share of profit from equity accounted investee slid by 1.43 percent in 2022. SML recorded the lowest net loss of Rs.225.30 million in 2022, down 83.77 percent year-on-year. This translated into loss per share of Rs.1.80 in 2022.
In 2023, SML’s topline contracted by 22.42 percent year-on-year to clock in at Rs. 9561.82 million. This was due to lesser sales volume.
During the year, the company’s crushing slid by 24.37 percent to clock in at 1019.181 MT. This was due to high competition among the millers for the procurement of cane and exorbitantly high support price set by the government. Molasses procurement also suffered due to smaller crushing season.
Textile business remained lackluster due to lesser demand of yarn.
Cost of sales dipped by 17.32 percent in 2023, resulting in gross loss of Rs.322.72 million. Distribution expense tumbled by 42.59 percent in 2023 due to thinner sales volume.
Administrative expense ticked up by 5.91 percent in 2023 due to higher payroll expense despite workforce retrenchment to 868 employees. 438.94 percent spike in other expense in 2023 was the consequence of net exchange loss incurred during the year.
However, other expense was offset by 139.44 percent higher other income recognized during the year on the back of sale of bio fertilizer during the year. SML recorded operating loss of Rs.587.77 million in 2023, up 790 percent year-on-year.
Finance cost posted a marginal 7.87 percent year-on-year uptick in 2023 despite monetary tightening. This was because the company had lesser outstanding borrowings during the year. Share of profit from equity accounted investee increased by 36 percent in 2023.
SML registered net loss of Rs.546.22 million in 2024, up 142.44 percent year-on-year. This translated into loss per share of Rs.4.37 in 2023.
In 2024, SML’s net sales further shrank by 7.63 percent to clock in at Rs.8831.78 million. Sugarcane support price set by the government at the start of the season was Rs.400 per 40 kg; however, the unofficial price went above Rs.500 per 40 kg. Due to non-availability of sugarcane at reasonable prices, the company closed its crushing operations for 91 days and crushed only 778.454 MT of cane, down 23.62 percent year-on-year.
Bio fuel and textile business also underperformed during the year due to weak demand in the international market. Nonetheless, cost of sales spiked by 9.48 percent in 2024, resulting in the highest ever gross loss of Rs.1990.17 million, up 516.70 percent year-on-year.
Thinner sales volume drove down distribution expense by 35.82 percent in 2024. Conversely, administrative expense succumbed to inflationary pressure and surged by 4.27 percent in 2024 despite workforce rationalization to 761 employees. Provision booked against doubtful advances and doubtful export rebate receivable resulted in 38.70 percent higher other expense in 2024.
Other income also dropped by 66.25 percent in 2024 due to massive decline in the sale of bio fertilizer. Operating loss multiplied by 326.40 percent to clock in at Rs.2506.22 million in 2024.
Finance cost ticked up by only 3.80 percent in 2024 despite monetary tightening as the company settled a huge portion of its outstanding borrowings during the year. During the year, SML recorded share of loss of Rs.38.19 million in equity accounted investee.
The company recorded net loss of Rs.2937.78 million in 2024, up 437.84 percent year-on-year. Loss per share was recorded at Rs.23.50 in 2024.
Recent Performance (Year Ended September 2025)
In 2025, SML recorded a decline of 37.55 percent in its topline which clocked in at Rs.5515.54 million. This was due to crushing of only 498.014 MT of sugarcane, down 36 percent year-on-year.
In 2025, SML crushing period lasted for only 86 days which was the shortest crushing period ever recorded by the company. This was due to adverse weather conditions which squeezed the sugar recovery of companies across the sector. SML recorded sugar recovery of only 7.97 percent in 2025 versus 9.29 percent recorded in the previous year.
Gross loss ticked down by 12.38 percent to clock in at Rs.1743.71 million in 2025.
Distribution expense mounted by 19.33 percent in 2025 due to higher freight and forwarding charges incurred during the year. This was due to higher export sales recorded during the year. Administrative expense tumbled by 12.32 percent in 2025 due to lower payroll expense as the company streamlined its workforce from 761 employees in 2024 to 550 employees in 2025.
Other expense shrank by 61.23 percent in 2025 due to lesser provision booked against doubtful receivables, doubtful advances and doubtful export rebate receivable. Other expense was conveniently offset by 51.18 percent stronger other income recorded in 2025 due to higher gain recorded on the sale of property, plant and equipment.
Operating loss contracted by 17.38 percent to clock in at Rs.2070.67 million in 2025. Finance cost nosedived by 20.23 percent in 2025 due to monetary easing and considerably lesser outstanding borrowings which resulted in a gearing ratio of 4.22 percent versus 9.47 percent recorded in 2024.
Share of los from equity accounted investee (Shakarganj Food Products Limited) soared by 1245.47 percent in 2025. SML posted net loss of Rs.2592.804 million in 2025, down 11.74 percent year-on-year. This translated into loss per share of Rs.20.74 in 2025.
Future Outlook
Due to better weather conditions, sugarcane production is anticipated to increase in the next curshing season. As per IMF directives, the provincial governments are taking steps to deregulate the sugar industry. As a part of it, the government will not set the minimum support price of sugarcane and let it be determined by the market forces. This will bode well for the sugar industry and allow them to address rising production cost.
Besides, monetary easing as well as improvement in macroeconomic fundamentals in the local market will also be beneficial for the industry. SML is also considering entering into some local partnerships to attain a higher capacity utilization of its sugar business.
As of September 30, 2025, the company’s current liabilities exceed its current assets by Rs.7005 million with accumulated loss clocking in at Rs.6865.449 million. The company is facing liquidity crunch which raises significant doubts over the ability of the company to continue as a going concern.
However, SML is considering selling its agricultural land worth Rs.1069.908 million which will be used to meet its working capital requirements and up gradation of plant and machinery.
Besides, the company also plans to dispose its Bhone unit worth Rs.7.888 billion which include sugar and biofuel divisions. If materialized, the deal will make the business debt free.
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