Credit Rating- Revision

THE UGAR SUGAR WORKS LIMITED. Works * Ugar Khurd - 591 316, Dist.Belgaum, Karnataka Phone • -91 8339 274000 (5 Lines) Fax • -918339 272232 E-mail * helpdesk@ugarsugar.com Website • www.ugarsugar.com Regd. Office * Mahaveernagar, Sangi i - 416 416, Maharashtra. Phone • -912332623717, 2623716 Fax * -912332623617 E-mail * usw.sangli@ugarsugar.com. TIN No. • 2952000700 I, PAN-AAACT7580R GSTIN NO • 29AAACT7580RIZD. ECC No.AAACT7580 RXMOOI. (CIN- Ll5421P 1939PLC006738) Sec/ Date: 13/08/2026 To, To, The Executive Director, Corporate Communications Bombay Stock Exchange Ltd., National Stock Exchange of India Ltd. P J Towers, Dalal Street, Exchange Plaza, Plot no. C / 1, G Block Mumbai. Bandra-Kurla Complex, Bandra (E) TclNo: ~22)22721234 Mumbai - 400 051 Fax No: (022) 22721278/22722039 Tel No: (022) 26598148 Fax No: (022) 26598120 Dear Sir, Sub: Credit rating revision from Care Edge dated August 13, 2026. Please find below the Credit rating received form CareEdge: Facilities/Instruments Amount (:f crore) Rating Ratina Action Upgraded from CARE CARE BBB-; 700.00 BB+; Negative Long-term bank facilities Stable Withdrawn Fixed deposit 80.00 --- We are attacheing herewith the letter received from CareEdge in respect of Credit rating for bank facilities dated August 13, 2026. This is for your Kind information Mumbai : 70 I, Roh, Orion, 16'" Road, Sandra (W), Mumbai 400 050,.Phone:+9 I 22 26043540, Telefax:+91 22 26045848, E-mail : : usw.bby@ugarsugar.com. Bangalore:317, 14'1'Cross, 9'" Main Jaynagar, II Block,Back Side of Kuchalamba Kalyan Mantap,560 011.Ph./Fx:+91 80 26565630, ail:usw.blr@ugarsugar.com. Belgaum :Chinmaya, Plot No.267/B, Sector No.II, Backside of S.B.I. Shivabasav Nagar-591 0 I 0, TelefaxNo.+918312472204,Email:usw.bgm@ugarsugar.eom. Press Release The Ugar Sugar Works Limited August 13, 2026 Name of the Amount (₹ Facilities/Instruments Rating2 Rating Action Regulator1 crore) CARE BBB-; Upgraded from CARE BB+; Long-term bank facilities RBI 700.00 Stable Negative Fixed deposit MCA - - Withdrawn Details of instruments/facilities in Annexure-1. Rationale and key rating drivers Upgrade in rating and revision in outlook from ‘Negative’ to ‘Stable’ assigned to bank facilities of The Ugar Sugar Works Limited (USWL) reflects significant improvement in the company’s profitability supported by growth in sales volume and sugar realisation, and better co-generation power segment performance in FY26 and Q1FY27. Concerns regarding sizeable debt repayments of ~₹50 crore p.a. each in FY26 and FY27 are substantially mitigated by the improved profitability achieved in FY26 and Q1FY27, which is expected to continue in FY27. In FY26, the company’s scale of operations grew by 11% year-over-year (y-o-y), whereas profit before interest, lease rentals, depreciation, and taxation (PBILDT) margin expanded by ~370bps y-o-y. CARE Ratings Limited (CareEdge Ratings) expects sustained performance in the medium term, driven by continuing high sugar prices and its sizeable crushing and distillery capacities and long track record of operations. CareEdge Ratings continues to positively factor in the company’s diversified revenue streams from sugar, ethanol, and co- generation, leading to mitigation of the risk related to the cyclical and seasonal sugar industry to a certain extent. CareEdge Ratings notes that the company plans to operate distillery on maize, which is expected to help sustain profitability for the year. USWL’s ability to sustainably improve its capacity utilisation for ethanol production, while maintaining low inventory levels under the sugar segment will be a key monitorable. Ratings also consider cordial relations with local framers, leading to adequate procurement of cane and presence in a high recovery zone. Ratings also derive strength from experienced promoters over eight decades and their established presence in sugar and related industries. However, rating strengths are partially offset by the company’s leveraged capital structure despite some improvement in FY26, led by accretion of profits to net worth and scheduled debt repayments, presence in a working capital intensive business, and its operations in a seasonal, cyclical, and regulated industry, which is inherent to agro-climactic risk. CareEdge Ratings has withdrawn the rating outstanding on fixed deposit (FD) programme of USWL with immediate effect. This action has been taken at the request of USWL, in accordance with CareEdge Ratings’ policy on withdrawal of ratings. Rating sensitivities: Factors likely to lead to rating actions Positive factors • Improvement in profit before depreciation, interest, and taxes (PBDIT) margins to above 8% while sustaining scale of operations. • Improvement in total debt (TD)/PBDIT below 5x on a sustained basis. Negative factors • Decline in the operating profit margin below 5% on a sustained basis. • Deterioration in the overall gearing above 3.50x. Analytical approach: Standalone 1SEBI: Securities and Exchange Board of India; RBI: Reserve Bank of India; MCA: Ministry of Corporate Affairs; IRDAI: Insurance Regulatory and Development Authority of India; PFRDA: Pension Fund Regulatory and Development Authority. 2Complete definitions of ratings assigned are available at www.careratings.com and in other CARE Ratings Limited’s publications. 1 CARE Ratings Ltd. Press Release Outlook: Stable Revision in outlook from ‘Negative’ to ‘Stable’ reflects CareEdge Ratings’ expectations that the company’s liquidity will improve, and it will generate adequate cash accruals and maintain adequate debt coverage metrics in the medium term, supported by sustained operating performance, established track record, reduction in term debt, and the absence of major debt-funded capital expenditure plans. Detailed description of key rating drivers Key strengths Sustained growth in scale of operations and improvement in profitability in FY26, which is likely to sustain USWL’s scale of operations grew by 11% y-o-y and stood at ₹1490.22 crore in FY26 (PY: ₹1333.50 crore), primarily driven by increase in y-o-y sales volume and growth in revenue share from the industrial alcohol segment. The company’s operating profitability improved significantly in FY26, supported by better sugar recovery and growth in sugar realisations. Despite the increase in cane price, considering Government of Karnataka’s directive requiring sugar mills to pay additional charges over and above fair and remunerative prices (FRP) to farmers, which led to increase in manufacturing expenses by ~₹50 crore, the company managed to generate PBILDT of ₹106 crore in FY26 against ₹44 crore in FY25, reflecting a strong y-o-y recovery in operating performance. Going forward, profitability is expected to remain healthy, aided by higher sugar prices and the company’s expectation of maintaining sugarcane crushing levels comparable to the previous season, although sugar recovery levels will continue to remain a key monitorable. Based on the El Nino effect, availability of sugarcane and sustenance of cane crushing at similar levels will be key monitorable. Extensive experience of promoters in the sugar industry USWL was set up in 1939 in the Ugar Khurd, Karnataka, with an installed capacity of 500 tonne of cane per day (TCD) and has over eight decades of experience in sugar business. Currently, the company operates two sugar units – one in Ugar, Khurd and another in Jewargi, Kalaburgi, Karnataka. The company has a total installed capacity of 24,200 TCD with a 59.50 megawatt (MW) co-generation unit and an 845-kilolitre per day ethanol plant in the sugar season, which can be converted to a 400-KLPD grain- based ethanol plant in the offseason. The company is part of the Shirgaokar Group (SB group) and is actively managed by Neeraj Shirgaokar and Chandan Shirgaokar, as the company’s managing directors, supported by an experienced management team. Integrated business model with diversified revenue streams USWL’s Khurd unit currently operates a 20,00 [Showing first 8,000 characters — download PDF for full document]