Vishwaraj Sugar Industries records a stellar Q3 earnings, plans expansion of production capacity

17 Jan 2022 , 02:52 PM

Vishwaraj Sugar Industries Limited, an integrated sugar and ethanol manufacturer, announced its Q3 results recording a 398.65% yoy rise in its PAT at Rs 20.67 crore for the period ending December 2021 against Rs 4.17 crore during the corresponding period in the previous year. It reported a growth in revenue of 27.62% yoy to Rs 337.86 crore for December 2021 quarter, against Rs 264.73 crore for the period ending December 2020.

It has a current sugarcane crushing capacity of 11,000 MT per day, co-generation capacity of 36.4MW, vinegar manufacturing capacity of 70,000 litres per day, and distillery capacity of 100,000 litres per day. the company has already achieved and delivered 99.9%, while the acceptance level for pure alcohol/ethanol is 99.6%, showing exemplary international standards. The company was also able to generate capital investment for setting up a sugar refining facility, thereby saving a sizeable Rs 80 crore, and increasing the overall ROI.

“We plan to move up the value chain by targeting new clientele in the pharmaceuticals, health supplements & nutraceuticals. Razor-sharp focus on high-value high-margin products, such as pharma grade sugar and ethanol, is expected to increase the revenue per ton of sugarcane crushed over the next five years. Also, the company plans to ramp up the capacity for ethanol taking a total to 500,000 litres per day,” said the company.

The company plans brownfield ethanol production expansion by a capacity of 150,000 litres per day. This expansion is driven by technological up-gradation and the company is filing a patent to that effect. This will increase the overall ethanol production capacity to 250,000 litres per day. The expansion will happen in the existing premises by November 2023. Further, the company is planning to set up a Greenfield Ethanol Production Facility, having a final capacity of 250,000 litres per day, within 80 km from the existing factory in the Belagavi district. VSIL has already acquired 120 acres of land for this project. The estimated project investment is Rs 250 crore and the first full year of operation of this facility shall be FY 2024.

VSIL plans to move up the value chain by targeting new geographies, sectors, and clientele in the pharmaceuticals, health supplements and nutraceuticals, and beauty and personal care industries. These markets belong to the niche category and are characterized by realized price realization and improved receivables management.

The company has entered into contracts with Oil Marketing Companies for supplying 25 million litres of ethanol commencing from December 2021, as against the supply of 22.5 million litres of ethanol during the twelve-months ended on November 30, 2021. The Company has already supplied 4.75 million litres of ethanol for the current period.

The company’s stock is currently trading at Rs 24.05 against previous closing of Rs 25, down by 95 paise (3.80%).