The revision in the ratings assigned to the bank facilities of BHSL takes into account the improved profitability supported by firming up of sugar prices and improved operational performance on the back of better sugar recovery rates. The ratings continue to derive strength from BHSL's experienced promoters and management team, long track record of operations, multi-location manufacturing setup and integrated nature of operations. The ratings are, however, constrained by BHSL's substantial investment in group companies, high repayment obligations for the restructured debt, cyclical nature of the sugar industry and regulated nature of business.
Going ahead, the ability of the company to improve profitability, effective management of operational cash flows and recovery of group advances to improve liquidity and capital structure shall be the key rating sensitivities.
BHSL, a part of the 'Shishir Bajaj Group', is one of the largest sugar manufacturing companies in the country and also the largest industrial alcohol manufacturer in India. BHSL has 14 sugar factories with an aggregate capacity of 1.36 lakh tonnes of sugarcane crushed per day (TCD). It has six distilleries with capacity to produce 800 kilo litres per day (KLPD) of industrial alcohol and owns co-generation plants having power generating capacity of 449 MW. The company also has two Medium Density Fiber Board manufacturing plants with capacity of 35,000 MT per annum.
BHSL reported a total income of Rs 4803.72 crore with a net loss of Rs 114.28 crore in FY16 (refers to the period April 1 to March 31) as compared with the total income of Rs 4686.72 crore with a net loss of Rs 1097.22 crore in FY15. During Q1 FY17, the company reported a total operating income of Rs 1332.80 crore and a net loss of Rs 77.38 crore as against an operating income of Rs 1601.03 crore and PAT of Rs 103.80 crore during Q1 FY16.