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ICICI Direct Report
Balrampur Chini Mills Ltd. reported decent results in Q2 FY22. Consolidated revenues saw a de-growth of 5.9% with marginal dip in sugar and distillery sales.
Sugar sales were down 4% mainly due to lower domestic sales quota compared to base quarter.
The company sold 2.7 lakh tonnes (12.7% lower) of domestic sugar sale quota against 3.1 litre in the corresponding quarter. However, sugar prices started moving upwards from August 2021, which resulted in higher sugar realisation for the company.
Average sugar realisation was higher by 4.8% to Rs 34.5/kg for the company with the substantial reduction in sugar inventories in the last three years.
Balrampur Chini is holding 1.89 litre of sugar valued at Rs 33.01/kg. The inventory valuation was higher due to the negative operating leverage given the company experienced lower sugarcane production in its catchment area due to red rot in 2020-21 sugar season.
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