OIDA International Journal of Sustainable Development
Open-access peer-reviewed journal
https://doi.org/10.64211/oidaijsd190213
Impact of Leverages on Profitability of Select High and Low-Performing Sugar Companies in India
Savitha B. 1*, R. Sathya 2
1 Department of Commerce, Sri Krishna Adithya College of Arts and Science, Coimbatore, India.
2 PSG College of Arts & Science, Coimbatore, India.
* Corresponding authour: vsavithabalan@gmail.com
Volume 19, Issue 02, Pg. 151-166, 2026
Abstract: The sugar industry in India has been immensely beneficial in promoting the economy of some of the nearby countryside, agricultural-industrial jobs, and regional infrastructure development, mainly in sugar-growing states such as Maharashtra, Uttar Pradesh, and Tamil Nadu. Nevertheless, the increasing financial disparity between well-performing and underperforming sugar companies is exacerbating uneven regional growth, poor infrastructure utilization, and economic stagnation in rural areas. The ineffective use of financial and operating leverage, which influences the profitability and, therefore, the ability of the firms to reinvest in the local communities and economic planning, is one of the major underlying causes of such imbalance. These issues have direct tensions on the goal of SDG 8 (Decent Work and Economic Growth), SDG 9 (Industry, Innovation and Infrastructure), and SDG 11 (Sustainable Cities and Communities), particularly within economically fragile regions. This paper presents an organised financial analysis of some of the top and low-performing sugar firms in India between the years 2019 and 2024. It is a financial ratio analysis and the regression model-based analysis that assesses the impact that leverage decisions, as quantified by Return on Assets (ROA), Net Profit Margin (NPM), and Earnings Per Share (EPS) data have on profitability and consequently regional contributions. The results indicate that firms with an effectively balanced leverage structure are not only more profitable but also tend to foster local community development, drive infrastructural growth, and exhibit greater resilience in employment creation. On the contrary, those companies with poorly balanced leverage do not contribute to the regional economic development, worsening the spatial inequality. The research findings indicate that the exploitation of industrial sectors such as sugar should be incorporated in regional development plans, which ought to be sustainable and fair in development over time. This contributes to the achievement of SDGs 8, 9, and 11 of regional sustainable planning.
Keywords: sugar industry, Return on Assets (ROA), Net Profit Margin (NPM), and Earnings Per Share (EPS).
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