Inconsistent And Declining Net MarginsInconsistent and declining net margins reduce earnings visibility and constrain sustainable cash generation. For an agro-processing firm, margin volatility limits the ability to absorb cane-price swings, invest in capacity, or build reserves, weakening structural profitability over the medium term.
Volatile Operating Cash FlowRecent declines and volatility in operating cash flow heighten working-capital and liquidity risk during off-season periods. This volatility can force short-term financing, restrict capex timing, and increase refinancing needs, undermining stable operations and strategic investments over several months.
High Exposure To Agricultural And Policy RisksEarnings are structurally exposed to cane yields, recovery rates and government policies on pricing/blending. Such regulatory and agricultural variability creates persistent earnings and margin uncertainty, limiting predictability of cash flows and complicating medium-term planning and investment.