Andhra Sugars Dividend 2026 – ₹1.20 Final + Special | Record Date 18 Sep

The Andhra Sugars Limited (NSE: ANDHRSUGAR, BSE: 590062) is a diversified manufacturer incorporated in 1947, operating across sugar, industrial alcohol, chlor-alkali (caustic soda and caustic potash), sulphuric acid, aspirin, salicylic acid, and liquid & solid propellants. It also generates captive power. Chlor-alkali is its largest segment at roughly 37% of revenue, giving the company a chemical-heavy profile rather than a pure sugar play.

With a market capitalisation near ₹1,296 crore and classified as a small-cap by SEBI, The Andhra Sugars Limited combines a long operating history with a near debt-free balance sheet. This overview frames the company's latest dividend, announced on 30 May 2026 for FY2025-26, which forms the basis of the analysis below.

The ₹1.20 payout tells two stories. On a per-share basis it is a 50% increase over last year's ₹0.80, signalling management confidence after a sharp earnings recovery. Yet the payout ratio fell to ~20% from 42% the prior year — meaning the higher rupee dividend is a function of profits tripling, not of a more generous distribution policy.

The ₹0.20 special dividend is the notable signal. With coverage of 5.12x earnings and investments of ₹529 crore against a ₹16.26 crore outflow, this is a comfortably funded, low-strain payout — conservative rather than aggressive capital return.

The Andhra Sugars Limited enters FY2026-27 with momentum: Q1 FY27 (June 2026) revenue was ₹627 crore with net profit of ₹47 crore, already matching a large share of full-year FY26 profit. New capacity — a 500 TPD sulphuric acid plant, a solar power plant, and a salicylic acid line — supports the chemical segment.

The swing factor remains chlor-alkali realisations, which are cyclical and drove the FY24-25 slump. A near debt-free balance sheet and ₹1,644 crore reserves give the company room to sustain dividends through cycles, but earnings — and therefore future rupee dividends — will track commodity pricing closely.

At its board meeting on 30 May 2026, the Board of The Andhra Sugars Limited recommended a final dividend of ₹1.00 per share (50%) and a special dividend of ₹0.20 per share (10%) on the face value of ₹2, for the financial year ended 31 March 2026. The combined payout is ₹1.20 per share (60%).

The dividend is subject to shareholder approval at the 79th Annual General Meeting scheduled for 24 September 2026. The register of members will remain closed from 19 to 24 September 2026, with dividend warrants to be dispatched from 29 September 2026. Eligibility is determined as of end of business on 18 September 2026.

At the current market price of ₹95.35, the ₹1.20 dividend gives a yield of 1.26%. Measured against the approximate announcement-date price of ~₹82, the yield was ~1.46%. Both are modest and sit below the yield on many established dividend stocks.

Importantly, the yield is low because the share price has risen — the stock is up roughly 26-30% over one year — not because the dividend is weak. The ₹0.20 special component is one-time in nature, so investors should not annualise the full ₹1.20 as a recurring base. On a normal-dividend basis (₹1.00), the recurring yield is closer to ~1.05%.

Over the post-split period, dividends have been volatile: ₹2.00 (FY22) → ₹2.00 (FY23) → ₹1.00 (FY24) → ₹0.80 (FY25) → ₹1.20 (FY26). The 2024 and 2025 cuts tracked a collapse in chlor-alkali margins, and the FY26 rebound tracks the profit recovery.

The company has a long, uninterrupted dividend record stretching back decades, but the rupee amount fluctuates with the commodity cycle. This makes The Andhra Sugars Limited a cyclical dividend payer — reliable in continuity, unreliable in amount. Investors seeking predictable, growing income should note the past dividend cuts of FY24 and FY25.

FY26 was a strong operating-leverage year. Revenue grew 22.1% to ₹2,466 crore, but operating profit grew 104% (₹100cr → ₹204cr) and PAT grew 222% (₹27cr → ₹87cr). Profits rose far faster than sales because margins expanded as chlor-alkali realisations recovered from a weak base.

The five-year revenue CAGR is a moderate 10.3%, but profit has been erratic (5-year profit CAGR is negative), underlining cyclicality. The Q1 FY27 print — ₹47 crore net profit — suggests the recovery is continuing, though a single strong quarter does not remove commodity-price risk from the outlook.

Cash quality is a clear strength. FY26 operating cash flow was ₹278 crore against net profit of ₹87 crore — a CFO/PAT ratio well above 100%, driven partly by a sharp reduction in inventory days (161 → 76). Free cash flow was ₹226 crore.

The ₹16.26 crore dividend is therefore funded entirely from current cash generation, not from reserves, asset sales, or borrowings. FCF covers the dividend 13.9x and the payout consumes only 7.2% of free cash flow. On a cash basis, this is one of the more comfortably funded dividends in the small-cap chemical space.

On every funding test, the current dividend is safe. Earnings coverage is 5.12x, FCF coverage 13.9x, cash coverage 32.5x, debt is negligible, and earnings are rising. The payout ratio of ~20% leaves ample retained profit.

The caveat is the amount, not the continuity. Because profits are cyclical, a downturn in chlor-alkali or sugar realisations could shrink the rupee dividend again — as happened in FY24 and FY25 — even though the company would almost certainly keep paying something. Verdict: Sustainable in continuity; moderately variable in amount.

Within diversified chemical and sugar-chemical peers, The Andhra Sugars Limited screens as a low-yield, low-leverage, deep-value name. Its ~1.26% yield and ~20% payout are conservative versus higher-payout chemical majors, while its P/B of 0.77x (trading below book value) is at the value end of the sector.

Its ROE of 6.14% and ROCE of 8.44% are below larger, more efficient peers, reflecting the recent cyclical trough. The differentiator is its near debt-free balance sheet, which few commodity-chemical peers match. Specific peer yield and return figures are not independently verified in this report and should be checked against current data before comparison.

Promoters hold 50.49% of The Andhra Sugars Limited (as of June 2026), up from ~47% two years ago. Of the ₹16.26 crore total dividend, promoters receive an estimated ₹8.21 crore, with the remaining ₹8.05 crore flowing to public shareholders (46.64%) and FIIs (2.86%).

Rising promoter holding alongside a dividend and a special payout is generally a positive alignment signal — promoters are increasing skin in the game and are paid pro-rata alongside minorities, not preferentially. Note that a small portion of promoter holding (~2.09%) was pledged as of June 2026, which is worth monitoring.

Since April 2020, dividends in India are taxable in the hands of shareholders at their applicable income-tax slab rate. The company deducts TDS at 10% if total dividend paid to a resident exceeds ₹5,000 in a financial year (₹10,000 threshold under some provisions; 10% is the standard rate for PAN holders).

Worked Example (1,000 shares, 30% slab)

• Gross dividend: 1,000 × ₹1.20 = ₹1,200
• TDS @10%: ₹0 (below ₹5,000 threshold)
• Tax @30% slab: ₹360
• Net in hand: ₹840
• Effective post-tax yield (on ₹95.35): ~0.88%

• Commodity cyclicality: Chlor-alkali (caustic soda) realisations are volatile and drove the FY24-25 profit collapse; a downturn directly shrinks future dividends.
• Sugar regulation: Cane pricing, sugar MSP, and export policy are government-controlled and can compress margins.
• Special-dividend illusion: The ₹0.20 special is one-time; annualising the full ₹1.20 overstates recurring yield.
• Low ROE/ROCE: Returns of ~6-8% trail the broader market and reflect capital-heavy operations.
• Promoter pledge: ~2.09% of promoter holding was pledged (June 2026) — small but worth tracking.

• Chlor-alkali realisations & ECU: The single biggest driver of quarterly profit and dividend capacity.
• Quarterly OPM trend: Whether the FY26 margin recovery (OPM ~12% in Q1 FY27) holds or reverts.
• New capacity ramp-up: Sulphuric acid (500 TPD), solar power, and salicylic acid contribution to revenue.
• Payout policy: Whether management raises the recurring (non-special) dividend as profits normalise.
• Promoter holding & pledge: Continued accumulation is positive; any pledge increase is a caution flag.

The Andhra Sugars Limited's ₹1.20 dividend (₹1.00 final + ₹0.20 special) is a well-funded, low-strain payout backed by a near debt-free balance sheet, strong ₹278 crore operating cash flow, and 5.12x earnings coverage. The higher rupee amount reflects a genuine 222% profit recovery in FY26, and rising promoter holding adds an alignment positive.

The trade-offs are a modest 1.26% yield, a cyclical earnings base that has forced dividend cuts before, and a special component that inflates the headline. This is continuity-reliable, amount-variable income. Positives, negatives, risks, and monitoring points are laid out above for readers to weigh for themselves.

This article is for informational and educational purposes only and does not constitute investment, financial, or tax advice, nor a recommendation to buy, sell, or hold any security. Figures are compiled from company filings and public sources (Screener.in, NSE/BSE, TipRanks) believed reliable but not independently guaranteed; market data is as of 22 September 2026 and may change. Dividend approval is subject to the AGM. Investors should verify all figures and consult a SEBI-registered adviser before making decisions. ShareBazaar Online and the author accept no liability for actions taken based on this content.