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Sugar division impacted by twin headwinds of fall in volumes due to late crushing (-27% yoy) as well as lower free sale realizations (-13% yoy)
Adverse operating environment characterized by high cane costs and lower sugar prices lead to an EBIDTA loss in Q3 that gets magnified in to a ~Rs500mn net loss
Sugar division impacted by twin headwinds of fall in volumes due to late crushing (-27% yoy) as well as lower free sale realizations (-13% yoy)
Distillery revenues jump >4x yoy on the back of similar spurt in volumes while delayed start impacted co-gen production and sales volumes though company expects better performance with increased cane crushing
Delayed crushing has not led to any material hardening of sugar prices which combined with high cane costs continues to impact sugar profitability; we lower our FY14/15 estimates and downgrade the stock to Market Performer with revised 9-12mth target of Rs43 (earlier Rs45)
| (Rs m) |
Q3 FY14 |
Q3 FY13 |
% yoy |
9m FY14 |
% yoy |
| Net sales |
6,907 |
9,499 |
(27.3) |
19,650 |
(22.3) |
| Material costs |
(6,253) |
(7,491) |
(16.5) |
(17,680) |
(12.9) |
| Staff costs |
(336) |
(340) |
(1.2) |
(961) |
7.9 |
| Other overheads |
(400) |
(485) |
(17.6) |
(1,251) |
8.6 |
| Operating profit |
(81) |
1,184 |
- |
(243) |
- |
| OPM (%) |
(1.2) |
12.5 |
- |
(1.2) |
- |
| Depreciation |
(275) |
(271) |
1.2 |
(825) |
0.5 |
| Interest |
(208) |
(216) |
(3.7) |
(950) |
(19.0) |
| Other income |
56 |
56 |
(1.1) |
174 |
3.2 |
| PBT |
(508) |
753 |
(1,843) |
- | |
| Tax |
- |
(151) |
- |
(20) |
(91.4) |
| Effective tax rate (%) |
- |
20.0 |
- |
- |
- |
| Adjusted PAT |
(508) |
602 |
- |
(1,863) |
- |
