CHRZ's Six-Month Sugar Sales More Than Doubled, but the Share Closed Lower Five Sessions Running; Sahmino's Buy Call Is Invalidated Below 5,670 Rials (Friday, October 16, 2026)

Chaharmahal Food & Sugar (CHRZ), listed on Farabourse's second market, sold 19.9 trillion rials of beet sugar in the six months to September 22, 2026, 111.8% more than the 9.4 trillion rials in the comparable period. Yet its share fell on five consecutive closes, from 6,300 rials on October 7 to 5,730 rials on October 14, the last trading session, a decline of about 9%. The filed reports show higher selling prices drove revenue, while retail investors were net sellers during the slide. Sahmino's desk still has a buy reading, but its invalidation level sits only about 1% below the close.

Background

CHRZ processes sugar beet into sugar and also sells molasses and dried pulp. A 35% capital increase funded from retained earnings, approved at the June 13, 2026 extraordinary meeting, lifted registered capital from 7 trillion to 9.45 trillion rials. It added shares without diluting existing holders' proportionate stakes. In the audited standalone accounts for the year ended March 20, 2026, revenue was 33.304 trillion rials, up 50% year on year, and net profit was 6.192 trillion rials, up 22%. On September 8, 2026 the annual meeting approved 311 rials of cash dividend per share, 35.1% of that year's 885-rial earnings per share, struck on the former 7-trillion-rial capital (the assembly report). Earlier coverage of CHRZ asked what nominal growth meant after inflation. Now the question is what produced this year's growth and why the share has not followed it.

The numbers

• Beet-sugar sales in the six months to September 22, 2026: 19,915,322 million rials (19.9 trillion rials) versus 9,403,041 million rials a year earlier, up 111.8%. The source is the corrected September-period standalone monthly report, Codal tracing number 1607213, filed October 3. The sugar numbers match the initial report, tracing number 1600655, filed September 29; the amendment changed only the molasses quantity and rate.
• Quantity and unit selling price: 23,722 units versus 20,331 a year earlier, up 16.7%, and 839.5 million rials versus 462.5 million rials a unit, up 81.5%. The extracted table does not carry the physical unit; dividing the amounts by the rates points to tonnes. Multiplying the two growth factors, 1.167 by 1.815, gives 2.118 times the sales value: selling prices explain most of the increase.
• The latest month alone (August 23 to September 22): 5,879 units at 807.7 million rials each, for 4.749 trillion rials. The five months from March 21 to August 22 averaged 3,569 units and 3.033 trillion rials per month (the five-month totals, 17,843 and 15,166,592 million rials, divided by five). The latest month's quantity was 1.65 times and its sales value 1.57 times those averages, although its unit rate was 5.0% below the earlier five-month average of 850 million rials.
• Spring quarter to June 21, 2026: unaudited standalone revenue of 9.782 trillion rials against 3.792 trillion rials in the restated 2025 comparison, up 158%; net profit of 1.619 trillion versus 570 billion rials, up 184%. Earnings per share were 171 against 60 rials (Codal tracing number 1564554). Gross margin fell from 25.2% to 21.1% and operating margin from 22.2% to 19.6%, while net margin rose from 15.0% to 16.5%.
• Valuation based on the October 14 close of 5,730 rials: the exchange P/E was 8.75 on reported earnings per share of 655 rials, against a sugar-sector P/E of 10.27 as of October 14. Sahmino's own trailing-twelve-month P/E, incorporating spring filings and earnings of 779 rials per share, was 7.35. CHRZ had the fifth-lowest positive trailing P/E among 17 sugar names in Sahmino's overnight screen of October 16. Its interest-bearing debt-to-equity ratio was 0.11 and current ratio 2.41.
• Operating cash: audited standalone operating cash flow of 8.369 trillion rials for the year to March 20, 2026, or 1.35 times that year's 6.192 trillion rial net profit. In the spring 2026 quarter it was only 1.041 trillion rials, or 64% of 1.619 trillion rials in quarterly profit, following 853 billion rials of tax paid.

Drivers

Selling prices did the heavy lifting. If the revenue per unit rises while quantities change relatively little, the same sugar-beet operation produces a higher sales value. But costs rose too: the spring 2026 cost of sales was 7.723 trillion rials versus 2.836 trillion rials in spring 2025, a 172% increase. Gross margin narrowed by roughly four percentage points. The larger profit therefore came from a higher revenue base, not an expanding gross margin. That matters for persistence: it leaves much riding on the beet-sugar selling rate.

The latest monthly report did not weaken the sales story. Quantity and revenue ran above the preceding five-month monthly averages even though the unit selling rate slipped. The next monthly report, covering the period to October 22, is the test: without a firmer rate, first-half sales growth may slow.

Valuation has not converged with the sector. The exchange P/E of 8.75 was about 15% under its sector's 10.27 on the October 14 price basis. But CHRZ's decline was not unique among sugar stocks: nine of the 12 sugar names with the lowest positive P/E in the October 16 screen had a negative one-month return, whereas CHRZ was one of three with a positive one-month return, at 0.88%. A five-session setback is not, by itself, evidence of a deteriorating company-specific filing.

The cash question remains. During the fiscal year to March 20, 2026, the standalone cash-flow statement (Codal tracing number 1581688) reports 4.960 trillion rials paid to acquire long-term investments and 3.162 trillion rials of loans advanced to others, against 502 billion rials of dividends paid. Spring operating cash was weaker than spring profit; a buyer needs the next filing to show how promptly accounting income is collected in cash.

Outlook

Trading has not endorsed the filing. Retail investors net sold 394 billion rials in the five trading sessions from October 10 to 14 and 482 billion rials over the trailing 20 sessions; retail traders accounted for 85.8% of trading value in that 20-session window. On October 12, when 102 million shares traded, institutions bought 45.5 million shares, while retail net sold 44.0 million shares, or about 259 billion rials. These simultaneous movements do not establish why the price fell. At the last board snapshot on October 14, the final trade was 5,680 rials at the day's lower band, with about 8.7 million shares offered there; the closing price was 5,730 rials, not 5,680.

Sahmino's desk dated its CHRZ buy stance to October 14, 2026: reference close 5,730 rials, target approximately 6,830 rials (about 19.2% above the reference), invalidation approximately 5,670 rials (about 1.0% below it), and a 60-session horizon. The particular historical setup reached its target in 176 of 191 measured cases. Across all the desk's 1,334 settled stances, 680 reached target, 590 were invalidated and 64 expired, about 51% reaching target, so reaching the target is not a given. Two earlier CHRZ calls on September 19 and 20 reached their targets with net returns of 7.8% and 9.9%. An intermediate-momentum signal opened on October 10 at a reference of 6,250 rials also has invalidation around 5,670 rials; it is a tracked claim rather than a fresh entry.

The last trade stood just 10 rials above the rounded invalidation line. If the share starts the next session, Saturday October 17, under sell pressure, the call may be invalidated that morning. While the close stays above 5,670 rials the call stands; that is the operative condition, not a guarantee that the target will be reached.

Bottom line

CHRZ's beet-sugar sales more than doubled because its unit selling rate rose 81.5%, while the five-session share decline coincided with retail net selling, not a weaker monthly filing. Sahmino desk reading: CHRZ's closing price stays above 5,670 rials and reaches 6,830 rials. Condition: the closing price does not breach invalidation and monthly sales do not decline. Horizon: 60 trading sessions. Invalidation: a close below 5,670 rials. Reading as of October 14, 2026.

What to follow

• The October 17 closing price against 5,670 rials, and whether the October 14 sell interest at 5,680 rials clears.
• The monthly activity filing for the period to October 22, 2026; the previous one appeared on September 29 and was corrected on October 3. Watch the unit sugar rate against 807.7 million rials.
• Track the desk's target and invalidation alongside each close on Sahmino's CHRZ page.