BALARAMPUR CHINI

The company for Q4FY14 posted a set of very good numbers but ended FY14 on a very disappointing note. Its net revenue for the quarter was at Rs.700 crore, down 6% (YoY) yet it ended Q4 with a net profit at Rs.190 crore, more than doubling up by 168%. This jump up in net profit was mainly on account of fall in operating costs, where cost as a percentage of sales in Q4 was at 70% compared to 87% in Q4FY13. The fall in raw material was the main reason for the fall in costs. EBITDA for the quarter was at Rs.238 crore v/s Rs.124 crore in Q4FY13. EBITDA margin for the quarter was at 34.05% v/s 16.60% (YoY). The company’s interest cost was at Rs.23 crore, down 14%.

The sugar segment delivered a muted performance on account of subdued realizations and low volumes. In Q4FY14, sugar sales stood at 17.83 lakh quintals, down 4% (YoY). Realizations for the quarter stood at Rs.28.90/kg and sugar inventory was at 57.66 lakh quintals and is valued at `Rs.31.96 per kg – which is the cost of production. In the distillery segment, things were better, where blended realizations for the quarter were at Rs.34.77 per BL as against to Rs.28.89 per BL in Q4FY13. Ethanol sales were lower at 6,690 KL in Q4FY14 v/s zero in previous quarter. RS and ENA sales volumes for Q4 was at 11,847.2 KL v/s 20,994.8 KL in Q4FY13. Going forward, higher Ethanol offtake by Oil Marketing Companies (OMCs) is likely to improve performance of the segment. Co-generation segment sales and production volumes remained stable due to delay in start of the sugar crushing season. During the quarter, it began selling of Renewable Energy Certificate (REC) and the same is expected to continue going forward. The additional 12.7MW expansion at Kumbhi which went on stream in March will enhance capacity and improve performance in the months to come.

The company ended FY14 with a 18% drop in net revenue at Rs.2665 crore and net profit came in very low at Rs.4 crore compared to Rs.162 crore in FY13. No cost cutting to the help here as EBITDA also came down 50% (YoY) at Rs.214 crore. Sugar was the main dampner and this was on account of lower realizations and high production costs. The overall increase in arrears for the sector stands at over Rs. 10,000 crore. As at 31 March 2014, the company’s Long Term Debt stood at Rs.667 crore and Net Working Capital borrowings stood at Rs.718 crore.