piccadily sugar & allied inds ltd share price Management discussions


The Indian Sugar Mills Association (ISMA) has cut its estimate to 32.8 MT from the earlier estimate of 34 mt sugar production in the country dipped over 8 per cent to 32.1 Million Tonnes (MT) until may 15 in the current sugar season (October 2022-September 2023) against 34.92 mt in the previous season, industry sources said. nearly 500 mills have closed their operations, while 37 factories are still continuing with crushing (as on May 15), including 16 mills in Tamil Nadu and 15 units in Uttar Pradesh,

Sugar Availability

Sugar season 2022-23 started with opening stock at 70 Lac Tons. All India Production is estimated at 328 Lac Tons and the closing stock is estimated to be around 61.5 Lac Tons

Ethanol

The ethanol blending target of 10% and 20% were advanced to 2022 and 2025, respectively. The Government supplemented the sources of producing ethanol in the country, which was primarily from sugarcane or molasses, and added damaged food grains ,maize and surplus rice from FCI god owns to the list of feed stocks that could be used by distilleries to produce ethanol. Sugar mills were allowed to put up dual feed distilleries for both molasses/ cane-based ethanol projects and grain-based ethanol projects, to increase production and supply of ethanol. The document projected that in order to achieve 20% ethanol blending, the total ethanol quantity that would be required is about 1016 cr ltrs, which will be procured from both cane/molasses-based distilleries and grain-based distilleries. The Government is con dent that these targets would be achieved, and India will lead the way in green energy production needed to meet the ever-growing needs of automobile vehicles, probably the rst country to do so in the Indian sub-continent.

Distillery

The Excise & Taxation Department of Haryana in its Excise Policy has xed the sale price of country Liquor (Ex Distillery issue price) as per following details:

Year

Sale price for country Liquor

Quart Pint Nip
2022-2023 301.00 322 360
2023-2024 301.00 322 360

The Excise & Taxation Department of Punjab in its Excise Policy has xed the sale price of country Liquor (Ex Distillery issue price) as per following details:

Year

Sale price for country

Sale price for country Liquor

Sale price for country Liquor

Liquor 50 Degree*

65 Degree (Rum)*

65 Degree (Whisky)*

Quart Pint Nip Quart Pint Nip Quart Pint Nip
2022-23 787.20 815.84 897.14 1000.08 1028.72 1110.01 998.85 1027.49 1108.73
2023-24 893.90 923.09 1005.93 1106.77 1135.95 1218.80 1108.03 1137.22 1220.04

From 1st July 23 onwards

Opportunities & threats

1) Sugar consumed in moderation is a part of a healthy, balanced lifestyle. While this is a fact, there is a lot of misinformation oating all around making sugar the villain and blaming it solely for some lifestyle diseases. This negative perception around sugar is unfortunately spreading like wild re amongst the gullible and misinformed masses in our country. There is absolutely no scienti c evidence or any research paper which concludes or establishes that consumption of sugar in itself leads to any particular disease, be it diabetes, obesity or dental caries.

2) Government guideline regarding drinking is injurious to health was e ect the revenue of the company.

Out Look / Projection:

Sale of 5.00 Lac cases of Punjab Medium Liqour and 50000 boxes of IMFL Whisky at Patran, Punjab Sale of 6.00 Lac cases of Country Liqour at Bawal, Haryana

Risk and Concern

The steep escalation in the prices of sugarcane & raw materials will adversely a ect pro tability of sugar mill & other products of the company.

Competition from the other distilleries in the state of Haryana may a ect the sale of Country Liquor.

Internal Control System & their Adequacy

The auditor have felt that the company has a reasonable system of authorization at proper levels with necessary controls on the purchase of sugar cane, issue of materials and components & other related system of Internal control is commensurate with the size of the company. They also felt that the company has a reasonable system of recording receipts of raw materials and components and the company is recording the sales and purchase through the software. The Software engineers regularly check software program me.

Material Development in HRD/IR

The company has appointed regular sta of 37 persons in various departments along with contractual & seasonal sta for the e cient working of all the units of the company.

Particulars

2022-23 2021-22 % Increase/ Decrease Explanation For Change

Debtors Turnover 1. Ratio

6.86 12.58 (45.52) Reduction in Trade Receivables turnover ratio is due to decrease in revenue from operation

Inventory 2

2.76 3.88 (28.96) Reduction in Inventory

Turnover Ratio

Turnover Ratio Due to decrease in Cost of Goods Sold

3 Interest Coverage Ratio

(13.04) 1.14 1247.359 -

4 Current Ratio

0.44 0.43 0.87 Due to Increase in Inventory and other current assets and decrease in current liabilities
5 Debt Equity Ratio 0.19 0.21 (7.56) -

6 Operating pro t Ratio (%)

(34.18) (4.63) 638.75 -

7 Net Pro t Ratio (%)

(10.89) 0.04 (99) Reduction in Net Pro t Ratio is due to decrease in Pro t after tax

8 Change in Net Worth Ratio (%)

(0.13) 0.28 (147.25) -