Earnings Season- Balrampur Chini registers strong growth in Q3; expects closing stocks of 8.35 MMT unless excess sugar diverted for ethanol production

Balrampur Chini Mills Limited (BCML) has announced its Q3 financial numbers (quarter ending December 31, 2023) of FY 2023. The company has reported an improvement in volumes and realizations across all the segments.

Revenue from Operations is reported at Rs. 1230.39 crores as against Rs. 981.16 crores in the corresponding quarter of the last year, representing an increase of 25.4%. EBITDA (excluding Other Income) was Rs. 113.39 crores as against Rs. 79.67 crores in the corresponding quarter of the last year, representing an increase of 42.3%.

The Total Comprehensive Income (TCI) for the quarter ended 31st December 2023 was Rs. 92.25 crores as against Rs. 46.29 crores in the corresponding quarter of the last year, representing an increase of 99.3% over the corresponding quarter of the last year.

Commenting on the numbers, Vivek Saraogi, Chairman and Managing Director, Balrampur Chini Mills Limited (BCML), said that the quarter has showcased benefits of the companies sustained engagement with the farming community. “The successful collaboration over the past two seasons has led to a remarkable synergy with the farmers, resulting in an improved supply of sugarcane for our operations. Overall, with our focused efforts on enhancing sugarcane quality and quantity, our cane development initiatives are on track and we expect to crush 10% more this season. Sugar recovery is also expected to be higher than last season.”

Regarding UP Government’s decision to increase the SAP (State Advised Price) of sugarcane from Rs. 350 per quintal to Rs. 370 per quintal, Saraogi said that the increase in sugarcane prices within the state of U.P. presents a challenge for the industry, particularly against the backdrop of a surplus sugar scenario.

On Government’s ethanol policy intervention, Saraogi said that “Company had to shift mid-season to produce more sugar than what was envisaged at the beginning of the season which will lead to lower availability of Syrup/B Heavy molasses for Ethanol production. This will further lead to holding the sugar for a longer period rather than converting it into cash flows from sale of Ethanol on immediate basis. Impact of the same will be seen in the form of higher working capital requirement and higher finance costs as we move ahead.”

Balrampur Chini estimates net sugar production of 31.5 million tonnes after diversion of 1.7 million tonnes in this season for the country, which could lead to build-up of closing inventory to 8.35 million tonnes by Sept 2024 which will be 3.5 months of domestic requirement. “We feel that more diversion of sugar towards Ethanol/Export is needed to take care of anticipated higher inventory”, he said.


Please enter your comment!
Please enter your name here