Hello Sir,

Hope you are doing well.

Recently, I was scanning through some stocks and came across a company in which the promoters have been increasing stake year on year for more than 5 years now.

It is Sukhjit Starch & Chemicals. On reading further, found out that it is one of the oldest and the largest maize processing company specializing in production of starch and its derivatives.

Below, we have shared interesting insights from the Q4 FY 23 con-call of the company. Hope you find the details useful for your own investments or to add the stock to your watch list.


Before that, sometime back we released our new stock recommendation for our Alpha and Alpha + Members

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The latest one fits our framework as it’s a sub 3,000 crore market cap stock, largest player in India in some of the Specialty chemicals it manufactures, introducing new import substitute products, expanded aggressively over the last 4-5 years, has good operating performance track record, started reducing debt and available at only 12.5 times last 5 years average net profit

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Sukhjit Starch & Chemicals – Insights from Q4 FY 23 con-call of the company

– About Business

  • We are an agro-processing company that specializes in production of starch and its derivatives
  • Our operations started in 1943; Since then we have been expanding and currently we operate at four locations within India
  • We initially started with 1,800 tons per annum of corn grind capacity, which at present is around 600,000 tons per annum
  • Our product range includes native starches, modified starches, dextrines, liquid glucose, high maltose syrup, maltodextrins, monohydrate dextrose, sorbitol, dextrose anhydrous, etc.
  • These compounds serve as a purpose in manufacturing a variety of products like candies, toothpastes, protein powders, flavoring agents, medicines, cosmetics and many more.
  • The efficient operation and resource management of our four plants have resulted in all facilities operating at approximately 80% capacity

– Future Plans

  • Expanding our presence across different geographies has been a key objective for our company
  • To address evolving customer demands, we have focused on optimizing our product mix with a particular emphasis on high value offerings
  • To fuel our growth trajectory, we have allocated capital expenditure to enhance the capacity of our existing plants. This strategic investment will increase our daily production capacity installed from 1,600 tons to 2,000 tons over the next 24 months
  • We are targeting around INR 40 crores (CAPEX) for this financial year
  • Our industry grows at more than the rate of GDP. That has been the general trend and has been a consistent trend over the last many years. So we hope to continue with that. That’s the bare minimum
  • The intent is there to keep growing and our capex is targeted at ensuring that our future growth keeps happening

– Starch Industry

  • At Sukhjit, we are at approximately between 9% to 11% of market share depending on many estimates
  • There is a fair degree of consolidation amongst the top four or five players and the rest is fragmented
  • There are only a few listed players and amongst those listed players, I would expect that between 50% to 60% of the market share could be covered
  • As far as the future outlook of our industry is concerned, starch consumption per capita in India is one-tenth of that of US and one-fifth of that of China
  • Indian total output, Maize crop output is not more than 30 million tons. Some say 35 million tons. So exact data is not there
  • As a thumb rule, I would say the poultry and the feed industry consumes roughly between 60% to 70%
  • As far as exports are concerned, yes, that also fluctuates. It’s not a consistent 10% every year
  • Between the 20% left, some of maize goes into direct foods and some maize goes into the starch industry
  • High fructose corn syrup – Our parallel is with Brazil, not with US. US uses high fructose corn syrup because it does not have sugar plantations. India has adequate sugar so it will always be at the forefront



Disclaimer: This is not a recommendation to buy/sell Sukhjit Starch & Chemicals. The securities quoted are for illustration only and are not recommendatory.


Best Regards,

Ekansh Mittal
Research Analyst
Web: https://www.katalystwealth.com/


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