Ghachar Under the Lens: Chaharmahal Sugar's Sales Rose 50% and Profit 43% in FY1404; But Through the Inflation Lens, Real Growth Is Near Zero (Saturday, 18 July 2026)

Chaharmahal Food & Sugar, ticker Ghachar on the second market of Iran's Farabourse (the OTC exchange), has published its latest annual results for the fiscal year ended 29 Esfand 1404 (20 March 2026): revenue up about 50% and net profit up 43%. In the tradition of Sahmino's fundamental notes, this piece goes behind the big numbers to see how much of the growth is real and how much reflects inflation, exactly where the profit engine sits, and how the market is pricing the ticker today. This analysis is not a buy or sell recommendation.

The company at a glance

The company was founded in 1362 (1983) as a private joint-stock company, converted to a public company in 1371 (1992), and has been listed on Iran's capital market since 1390 (2011). Its plant and head office are near Shahrekord in Chaharmahal and Bakhtiari province. The core business is producing sugar from sugar beet; the by-products, beet pulp (animal feed) and molasses, carry a meaningful share of a sugar plant's economics. The revenue model is simple but heavily policy-driven: it buys the raw material (beet) at a government-set guaranteed price and sells the finished product (sugar) within the pricing framework of the Market Regulation Headquarters, so both ends of the margin sit in the policymaker's hands.

The ticker's market profile

The data below refer to the last trading session, Wednesday 24 Tir 1405 (15 July 2026); the bourse is closed Thursday and Friday.

One notable observation: in the 15 July session, when the Tehran Stock Exchange main index fell 0.63% to close at 4,893,834 points, Ghachar rose 2.8% and closed at its daily cap. This is only an observation, not a signal.

Fiscal 1404 results (unaudited)

The parent company's 12-month income statement, published on Codal (Iran's corporate-disclosure system) on 30 Ordibehesht 1405 (20 May 2026), is the basis for this section. The 1403 comparatives come from that year's unaudited report. All amounts in million rials:

For scale: 1404 net profit was about 603 billion tomans and annual sales about 3,330 billion tomans. 1403 was itself a high-growth year: sales rose 42% and net profit 24% versus 1402.

The mechanism: real growth or an inflation reflection?

This is where the nominal lens has to come off. Ghachar's 49.9% revenue growth in 1404 occurred in an economy where, per the Central Bank, average annual inflation to Khordad 1405 (June 2026) reached 57.7% and point-to-point inflation 83.1%. On any reasonable read of 1404 inflation, Ghachar's sales growth was at best in line with inflation and, in constant prices, near zero or negative; that is, these big figures are less "more sales" than "the same sales in cheaper money." The 43% net-profit growth is likewise probably negative in constant prices. We saw the same pattern in our fundamental analysis of Kapshir: striking nominal growth that is mostly inflation.

Three structural points stand out in the 1404 profit. First, the net margin compressed slightly from 18.9% to 18.1%, a sign that cost of goods sold (beet, energy, wages) grew a touch faster than the selling price. Second, non-operating items, at 1,244 billion rials, made up about 18% of pretax profit; their repeatability should be checked in the audited notes. Third, financial costs of 1,434 billion rials (about 4.3% of sales) are notable but contained; for an industry whose seasonal, cash beet purchase ties it to heavy working capital, this figure must be read alongside the capital-increase policy.

Capital increase and dividend

In under two years Ghachar has raised capital in two steps: first from 4,500 to 7,000 billion rials from retained earnings (board resolution 19 Azar 1403, EGM 22 Esfand 1403), then from 7,000 to 9,450 billion rials (a 35% increase), whose EGM was held on 23 Khordad 1405 (13 June 2026) and whose registration notice appeared on Codal on 31 Khordad 1405 (21 June 2026). The arithmetic for a shareholder: the 862-rial 1404 EPS, computed on the old capital, falls to about 638 rials once spread over the new capital (the market data source's 668-rial estimate is a touch higher, probably reflecting the consolidated versus parent basis). The perennial lesson here: in years of capital change, "net-profit growth" is the yardstick, not "EPS growth." The invitation to the annual ordinary general meeting for 1404 was published on 21 Tir 1405 (12 July 2026), so the company intends to pay a dividend, but the proposed amount was not verifiable at the time of writing and must be set at the meeting itself.

The sugar industry's economics: two administered ends

To understand Ghachar you must understand the industry. On 26 Esfand 1404 (16 March 2026) the Council for Pricing of Essential Goods set the new crop-year guaranteed purchase price for sugar beet at 93,700 for spring beet (16% sugar content) and 92,700 for autumn beet (15%); media reported these figures in tomans, but the unit (rial or toman) was not verified from the original resolution, and given the usual beet-to-sugar price ratio the figures are plausibly in rials (equivalent to 9,370 and 9,270 tomans); we record this unit ambiguity honestly. What is certain is a clear jump in the beet price versus the 3,930-toman rate of the 1402-1403 crop year. On the selling side, the Market Regulation Headquarters approved a new, higher sugar price in Ordibehesht 1405 (May 2026), and Ghachar itself filed a "change in product selling prices" disclosure on 9 Ordibehesht 1405 (29 April 2026) and a "change in raw-material purchase prices" disclosure on 10 Farvardin 1405 (30 March 2026); that is, both ends of the 1405 profit equation were raised at once and by decree, and the net margin depends on the ratio of the two. Two other structural variables: the country's annual sugar need exceeds two million tons, and the shortfall is filled by imports (dependent on FX and the global price); and beet supply in a province like Chaharmahal and Bakhtiari is tied to water, so drought is a permanent volume risk for these plants.

Risks

First and most important, disclosure and supervision risk: Ghachar currently carries a supervisory flag on Codal with the explicit note that the "audited annual financial statements and management interpretive report of the parent and consolidated entity" and the "board report to the meetings and the auditor's opinion" have not been disclosed; and on 1 Tir 1405 (22 June 2026) the Farabourse published a "grant of time to the issuer to comply with the listing directive." So all the 1404 figures in this report are unaudited and the audited version could be adjusted. Second, administered-pricing risk from both sides: any government decision on the sugar or beet price lands directly on the margin. Third, beet, water and energy supply risk. Fourth, macro and war risk: the Tehran bourse has been under selling pressure in recent weeks and the divergence between the bourse and the parallel market continues; although the plant is in Shahrekord, far from the conflict-hit south, systematic market risk touches every ticker. Fifth, the reliance of part of the profit on non-operating items whose durability is in question.

Valuation in context; an observation, not a recommendation

At the 3,660-rial close of 15 July 2026, Ghachar's market cap is about 3,459 billion tomans. Its P/E of about 5.5 (or about 5.7 on the diluted parent-statement profit) sits against the 8.27 sugar-group ratio; that is, the market prices Ghachar at roughly a one-third discount to the group average. The price-to-sales ratio is about 1.04. Part of that discount can be attributed to the disclosure risk and the unaudited figures, the dividend ambiguity, and the EPS dilution after the capital increase; part to the market's judgment on margin durability in the new crop year, with pricier beet and pricier sugar. The current price is about 38% above the low and 21% below the high of the past year. These are all "observations"; none is a buy, hold or sell recommendation. For a broader framework on where such assets sit in a portfolio, see Asset Allocation in Iran's Inflationary Economy.

What to watch

• Publication of the audited 1404 statements and the auditor's opinion; the most important event ahead, which both firms up the figures and either lifts or intensifies the supervisory flag.
• The annual ordinary general meeting (invitation published 12 July 2026): the dividend amount and management's answer on the disclosure delay.
• Summer 1405 monthly activity reports: the combined effect of the new sugar and beet prices on sales value and margin (the latest monthly report, for Khordad 1405, was published on 28 June 2026).
• Further Market Regulation Headquarters decisions on the sugar price and import policy.
• Water status and the beet planting area in Chaharmahal and the supplier provinces.
• The general mood of the Tehran bourse and events on the Sahmino calendar.

Bottom line

On paper, Ghachar's 1404 record is brilliant: sales roughly 1.5x and profit 1.4x. But through the real lens, this growth is around inflation and probably a little below it; the margin compressed slightly, the share of non-operating items in profit is not small, the figures are still unaudited, and the ticker carries a supervisory flag for exactly that reason. Against that, a P/E below the group shows the market has partly priced in these risks. Fiscal 1405, with new administered prices at both ends of the chain, will be the real test of this company's margin. This analysis is not a buy or sell recommendation and is only a framework for understanding the ticker better.