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Entry Price

157.00

Target

190.00

Recommend Date

04-02-2021

Return

21.02 %
BUY

Date : 04-02-2021

Balrampur Chini reported disappointing set of numbers with 10.3% decline in sales & 67% dip in earnings. The de-growth in sales & earnings was mainly due to increase in cost of production as like to like recoveries are lower in current season adversely impacted by weather conditions. Further sugarcane yield was also impacted by red rot disease in some parts of UP. Sugar realisation remained flat with delay in announcement of export subsidy & higher domestic sales quota. However, we believe the impact of these factors is temporary for this season and long term story of sugarcane diversion towards ethanol to balance sugar inventories remained unchanged. Sugar volumes have declined 14.5% to 2.7 lakh tonnes (lt) due to absence of exported in Q3. The base quarter includes 0.9 lt of exports. Distillery volumes were up 18.9% to 2.8 crore litre whereas realisation was up 10.4% to | 46/litre. Out of total distillery volumes, 35% was B heavy ethanol. 51% was C heavy ethanol & rest was ENA. Power revenues were up 2.2% with flat volumes. The decline in operating profit led to similar dip in profitability. PAT de-grew 62.9% to | 26.9 crore. Profit from associates increased from | 3.2 crore to | 5.9 crore.