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ICICI Direct Report
Balrampur Chini Mills Ltd. reported strong results with 22% growth in operating profit. Revenue witnessed growth of 16.6% led by ethanol sales growth of 57.8%.
Ebitda was up 22% at Rs 403.9 crore, with margins at 27.1%. Higher interest and income tax resulted in profit after tax growth of mere 5.8% to Rs 254.4.
Key triggers for future price performance:
Balrampur Chini has recovered its sugarcane crushing to 103 lakh tonnes (15% higher) in 2022-23 season with 15 basis points higher gross recovery. The increase in crushing would give the company sufficient feedstock to produce 33-34 crore litre of ethanol in FY24E.
With completion of large distillery capex, distillery volume is expected to grow at 33% compound annual growth rate along with estimated 3% increase in ethanol realisation. This would result in 37% CAGR in distillery sales.
Balrampur Chini has reduced dependence on Co0238 variety, promoting Co-0118 and other newer varieties in its catchment area. Newer variety would constitute more than 70% sugarcane in its catchment area in the 2023-24 season.
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