Balrampur Chini Mills (Q1 FY14)

India Infoline News Service | Mumbai |

Revenues declined 1.5% yoy on lower sugar volumes though free sugar realization improved 7.5% yoy; co-gen sales rose 17.6% yoy driven by 12% increase in surplus power volumes.

CMP Rs37, Target Rs45, Upside 20.8%
  • Higher cane costs and lower sugar realizations impacted Balrampur Chini’s Q1 FY14 results as company took write down on sugar inventory amidst  lower market prices compared to cost of production for the company


  • Revenues declined 1.5% yoy on lower sugar volumes though free sugar realization improved 7.5% yoy; co-gen sales rose 17.6% yoy driven by 12% increase in surplus power volumes. Distillery volumes were lower yoy as ethanol sales (0.15mn ltrs) started only from June 2013. RS & ENA volumes, on the other hand, jumped 51% yoy to ~18.7mn ltrs


  • EBIDTA margin declined 108bps yoy as company took write down on sugar inventory; however, EBIT margin for byproducts improved yoy due to healthy realizations


  • Sugar prices have stayed relatively benign compared to cane cost leading to inventory write down during the quarter; we cut our full year sugar realizations and accordingly revise lower our FY14/15 EPS estimates and 9-12 target price to Rs45 but retain BUY. 

Results table
(Rs m)
Q1 FY14
Q1 FY13
% yoy
Net sales
6,816
6,920
(1.5)
Material costs
(5,631)
(5,743)
(1.9)
Staff costs
(294)
(263)
12.1
Other overheads
(402)
(343)
17.2
Operating profit
489
572
(14.4)
OPM (%)
7.2
8.3
(108) bps
Depreciation
(266)
(274)
(3.0)
Interest
(400)
(535)
(25.2)
Other income
79
57
39.5
PBT
(98)
(180)
(45.9)
Tax
-
-
-
PAT
(98)
(180)
(45.9)
Source: Company, India Infoline Research 

Operating highlights
Operating performance
Q1 FY14
Q1 FY13
% yoy
Cane crushed
0.7
0.2
334.5
Sugar produced
0.07
0.02
316.0
Recovery (%)
10.0
10.5
-
Sugar sales (mn tons)
0.17
0.19
(10.7)
Free sugar realizations, Rs/kg
31.9
29.7
7.5
Distillery production, mn ltrs
26
22
16.9
Distillery sales, mn ltrs
19
20
(5.7)
Avg alcohol realization, Rs/l
29.6
26.4
11.8
Power production, mn units
237
205
15.8
Power sales, mn units
194
173
12.1
Avg realization (Rs/unit)
4.3
4.2
1.9
Source: Company, India Infoline Research

Financial summary
Y/e 31 Mar Rs m
FY12
 

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