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| India Infoline Research Team / 17:04 , Jan 11, 2010 |
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Topline surges ~74% as free sugar realization jumps to Rs32/kg, an increase of 79% yoy
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Higher sugar prices aid in margin expansion of over 24ppts
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Company posts a profit of Rs852mn vs. a loss a year ago
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Raise sugar price assumption by 22% and 28% for F9/10 and F9/11 respectively and upgrade to BUY with TP of Rs280
Result table
(Rs m)
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Q1 F9/10
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Q1 F9/09
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% yoy
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F9/09
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% yoy
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Net sales
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6,291
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3,622
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73.7
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22,993
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8.9
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Material costs
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(3,241)
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(2,425)
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33.7
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(12,208)
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(10.8)
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Personnel costs
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(315)
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(304)
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3.5
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(1,653)
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11.5
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Other overheads
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(584)
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(530)
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10.2
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(2,184)
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(15.5)
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Operating profit
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2,152
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364
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491.7
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6,948
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106.9
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OPM (%)
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34.2
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10.0
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2,416 bps
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30.2
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1,432 bps
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Depreciation
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(510)
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(485)
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5.3
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(3,457)
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23.5
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Interest
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(456)
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(486)
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(6.2)
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(2,781)
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34.3
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Other income
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32
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-
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342
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301.2
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PBT
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1,216
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(607)
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1,052
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Tax
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(355)
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321
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(472)
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Effective tax rate (%)
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29.2
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44.9
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Minority interest
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-
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-
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22
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(87.0)
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Adjusted PAT
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862
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(286)
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602
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Adj. PAT margin (%)
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13.7
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(7.9)
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2.6
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Extra ordinary items
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(10)
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(273)
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(96.5)
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-
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Reported PAT
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852
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(559)
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602
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Ann. EPS (Rs)
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19.5
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(8.1)
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3.4
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Source: Company, India Infoline Research
Note: Full year numbers are consolidated
Sugar leads the topline surge
A surge in sugar realization to Rs32/kg helped BJH post a ~74% rise in Q1 revenues. The company sold about 1.85mn tonnes of sugar during the quarter while alcohol volumes stood at 5.7mn ltrs (vs. 4mn ltrs last year). BJH produced 0.3mn tonnes of sugar from cane in Q1 and has ~0.25mn tonnes of sugar along with 0.56mn tonnes of raw sugar in inventory.
Operating margin also jumped 24ppts yoy on the back of higher sugar prices. BJH paid average cane price of Rs2,200-2,250/MT for cane and expects to pay 2,750-2,800/MT in western UP by the end of season as competition for sugarcane intensifies.
Segment-wise revenue/EBIT breakup (Rs mn)
Revenue
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Q1 F9/10
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Q1 F9/09
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% yoy
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Sugar
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6,016
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3,559
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69.0
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Distillery
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153
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124
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23.1
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Power
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424
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307
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38.3
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EBIT
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Q1 F9/10
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Q1 F9/09
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% yoy
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Sugar
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1,354
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(254)
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-
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Distillery
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(36)
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(67)
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(46.3)
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Power
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324
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199
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63.1
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Source: Company, India Infoline Research
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