Balrampur Chini Mills (Q3 FY14)
India Infoline News Service | Mumbai |
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)
CMP Rs41, Target Rs43, Upside 5.5%
Source: Company, India Infoline Research
Operating highlights
-
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) |
- |
Operating highlights
| Operating performance |
Q3 FY14 |
Q3 FY13 |
% yoy |
| Cane crushed |
1.4 |
2.3 |
(40.1) |
| Sugar produced |
0.12 |
0.20 |
(39.4) |
| Recovery (%) |
9.1 |
9.0 |
- |
| Sugar sales (mn tons) |
0.19 |
0.27 |
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