Murugappa Group’s EID Parry is targeting a quarterly breakeven for its Consumer Products Group (CPG) segment in the next four to five quarters. The company aims to achieve this milestone through new product lines, distribution expansion, and ongoing margin improvements.
The strategic outlook follows a sharp fall in CPG segment revenue during Q1FY27. According to Muthaiah Murugappan, whole-time director and CEO of EID Parry, the revenue contraction was intentional rather than a result of weakening market demand. During the Q1 earnings call, Murugappan explained to analysts that the drop was on account of a recalibration of the CPG business model, which focused on a more margin-accretive product mix to grow the absolute margin pool.
Financial figures for the quarter reflected this restructuring, with the CPG turnover recording approximately ₹94 crores compared to ₹188 crores in the corresponding quarter of the previous financial year.
Addressing questions regarding the expansion of newer product categories, Murugappan stated that both organic launches and acquisitions remain under exploration. As part of its near-term expansion, a new jaggery plant in Karnataka is scheduled to come online within six months. This facility is expected to more than double the company’s jaggery capacity. Once both jaggery plants are fully operational, EID Parry anticipates a turnover of close to ₹100 crores from the jaggery product line alone.
Outlining the broader three-to-four-year roadmap for the company, Murugappan noted a general climate of restructuring. The primary corporate aspiration is to secure consistent EBITDA generation from the core sugar and biofuels business lines. Management intends to enforce cost-efficiency measures to stabilize and restructure these operations.
On the regulatory and ethanol front, the CEO addressed the ethanol mix, stating that sugar diversion to ethanol stands at approximately 2.9 million metric tonnes (MMT), supporting the government’s E20 program. Despite public discussions surrounding the initiative, the company expects blend levels to remain at 20 percent for the foreseeable future.
Operational data for the quarter showed that the company crushed 1.47 lakh metric tonnes of cane in Tamil Nadu, compared to 2.12 lakh metric tonnes in the previous year. The manufacturing units operated for 54 days during the quarter, up from 37 days previously.
Additionally, company management noted that El Niño-linked weather concerns and tight inventories pushed domestic sugar prices above ₹45-46 per kilogram. However, leadership indicated that a price correction remains possible once the new crushing season commences.
"EID Parry’s strategic decision to recalibrate its CPG business model demonstrates how established enterprises prioritize margin expansion over pure top-line volume. By deliberately restructuring operations and scaling high-potential product lines like jaggery and biofuels, the company is laying the groundwork for sustainable long-term profitability. This disciplined approach to cost efficiency and core stabilization offers a strong operational lesson for businesses navigating volatile commodity markets." — Dr. Shishir Gupta, Founder & CEO, StartupLanes
