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ICICI Direct Report
Balrampur Chini Mills Ltd. is likely to witness one of the best years in terms of profitability, cash flow generation and total debt reduction.
With 2.8 lakh tonne of export in sugar season 2019-20 and 0.51 lakh tonne of sugar sacrifice for B-heavy ethanol, sugar inventories are likely to come down to 2.43 lakh tonne at the end of September 2020 against 4.92 lakh tonne in September 2019.
The huge liquidation of inventory would result in working capital debt coming down to less than Rs 100 crore by September 2020 against Rs 1173 crore in September 2019.
At the start of sugar season 2020-2021, the company would be holding one month of sugar inventory against industry average of 3.5 months.
This would significantly strengthen the balance sheet.
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