Surge in sugar realization, hedging gains drive Q4 topline
Bajaj Hindusthan reported a 5.5% growth in Q4 revenues on the back of ~64% jump in sugar realization to Rs27/kg (free quota). Q4 revenues also include ~Rs700mn as one-time gain from an US$125mn ECB hedge.
Improved sugar prices help post a profit; maintain MP
In absence of alcohol and co-gen operation, RM and overhead costs declined which aided in OPM expansion. Improved sugar performance helped the company post profit in Q4 vs. loss a year ago. Overall, we expect sugar prices to trade firm over next 12 months as supply remains depressed. We tweak our F9/11 EPS estimates but retain MP with TP of Rs204.