Balrampur Chini Mills (Q4 FY13)

India Infoline News Service | Mumbai |

Higher cane SAP led to jump in RM costs yoy and correspondent fall in OPM to 16.6% vs 33.5% a year ago

CMP Rs51, Target price Rs60, Upside 17.4%

  • Balrampur reported ~29% yoy growth in revenues as free sugar realizations improved 12% yoy; distillery revenues too perked up on the back of ~25% increase in volume dispatches
  • Higher cane SAP led to jump in RM costs yoy and correspondent fall in OPM to 16.6% vs 33.5% a year ago
  • Lower profitability in sugar segment due to inventory write down leads to yoy PAT decline though somewhat cushioned by higher other income (due to one off write backs) and drop in interest expenses yoy 
  • We expect the company to benefit from twin positives of removal of levy sugar subsidy and increase in ethanol price to Rs35/ltr though some offset is likely in the form of higher cane SAP for the next crushing season. We revise our estimates taking levy sugar reform in to account and retain BUY with 9-12 mth target of Rs60
Results table
(Rs m) Q4 FY13 Q4 FY12 % yoy FY13 % yoy
Net sales 7,447 5,778 28.9 32,748 41.8
Material costs (4,894) (2,761) 77.3 (25,190) 41.9
Staff costs (404) (370) 9.0 (1,295) 10.0
Other overheads (914) (711) 28.4 (2,067) 15.9
Operating profit 1,237 1,935 (36.1) 4,198 76.4
OPM (%) 16.6 33.5 (1,689) bps 12.8 252 bps
Depreciation (262) (280) (6.4) (1,084) (6.2)
Interest (267) (412) (35.2) (1,439) (2.4)
Other income 259 67 287.1 423 59.4
PBT 967 1,311 (26.2) 2,098 -
Tax (258) (12) - (485) -
Effective tax rate (%) 26.6 0.9 2,574 bps 23.1 -
Reported PAT 710 1,299 - 1,613 -
Source: Company, India Infoline Research 

Operating highlights
Operating performance Q4 FY13 Q4 FY12 % yoy
Cane crushed (mn tons) 5.7 5.6 0.5
Sugar produced (mn tons) 0.55 0.56 (1.2)
Recovery (%) 9.7 9.9 -
Free sugar realizations, Rs/kg 32.4 29.0 11.6
Distillery production, mn ltrs 26 25 6.4
Distillery sales, mn ltrs 21 17 24.7
Avg alcohol realization, Rs/ltr 28.9 26.7 8.4
Power production, mn units 351 344 2.2
Power sales, mn units 229 221 3.8
Avg realization (Rs/unit) 3.8 3.9 (2.3)
Source: Company, India Infoline Research

Financial summary
Y/e 30 Sep Rs m FY12 FY13E FY14E FY15E
Revenues 23,095 32,748 33,195 33,033
yoy growth (%) (22.4) 41.8 1.4 (0.5)
Operating profit 2,379 4,198 3,366 3,609
OPM (%) 10.3 12.8 10.1 10.9
Reported PAT 4 1,613 885 1,218
yoy growth (%) (99.7) - (45.1) 37.6





EPS (Rs) 0.0 6.6 3.6 5.0
P/E (x) - 7.7 14.1 10.2
P/BV (x) 1.0 0.9 0.9 0.9
EV/EBITDA (x) 13.5 6.7 7.8 6.5
Debt/Equity (x) 1.6 1.3 1.2 1.1
ROE (%) 0.0 12.8 6.6 8.8
ROCE (%) 4.3 10.5 8.1 9.2
Source: Company, India Infoline Research

 

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