Balrampur Chini Mills Limited — Q1 FY26 earnings call

Government of India has come out with a very clear clarification yesterday where they have not only spoken about this misnomer being a misnomer, but they have also very clearly given and detailed the benefits in terms of forex, etc., and they have gone on to say how they back the ethanol program per se. So, even BIS standards are being fixed. Probably they would move from 2026 onwards. They have detailed roadmap, or they are in the process of putting up a roadmap from 20% to 22%, then 25% to 27%.

Clarifies government's strong commitment to ethanol blending targets despite recent SIAM concerns, providing long-term visibility for the ethanol business.

Asked by Sanjay Manyal

I am very hopeful, especially since Government has said it is such a beneficial program why not do what they have not done for two years? We are in active persuasion with all Government sources for juice, B, both prices and this year being a surplus year. So, let me put my thinking on the table a bit. Last two years, the environment was not that of surplus. Next year, the first year we are entering surplus production. So, the Government's attitude when there is a surplus and when there is not a surplus, very different.

Highlights management's expectation of policy support (ethanol price revision, MSP) given the anticipated sugar surplus, which is crucial for sector profitability.

Asked by Sanjay Manyal

The demand could not have been fulfilled by the sugar industry owing to lack of raw material fully. And the year previous to that, they just put a grinding halt suddenly on diversion. So, the demand needed to be fulfilled, maize came and did the gap filling. Now in the current year, if you see, there have been some unintended consequences of maize area increasing... what if there is an oversupply? We will get our share is the answer. Maybe maize gets curtailed for all we know. We get our share because again, we go back to the basics. Basics is there is surplus. Surplus needs to be diverted. If not diverted, sugar price will suffer.

Explains the historical role of maize in filling demand gaps and suggests that in a surplus sugar year, sugar-based ethanol will be prioritized, potentially curtailing maize diversion.

Asked by Sanjay Manyal

But if I were to hazard a guess, I think we dropped by about 0.40% last year approximately? ... 11.28% from 11.72% something like that. So, I would definitely feel very positively inclined towards the recovery, but maybe not 11.72% in one year, maybe two years. But yes, it has a definite uptick from 11.28%. Halfway maybe. It is too tough to say.

Addresses concerns about declining recovery rates in UP, with management expecting an uptick due to varietal balance and favorable weather, but cautious on the extent of improvement.

Asked by Sanjay Manyal

So, actually, we are not at liberty to disclose the figures like this due to NDAs and things that we have. But obviously, since we are importing ourselves and we are doing everything, we are very cognizant of everything as we go. Sorry, I cannot give you too much of details.

Management declined to provide specific financial details on imported PLA pricing and its impact on future realizations, citing NDAs, which leaves a gap in understanding the project's profitability.

Asked by Sanjay Manyal

Yes, so SAP is in all likelihood would go up. I will be brutally honest, SAP might go up for two years and that may not be all that bad if supported by the measures which we have spoken about, which I briefed on Sanjay Manyal's questions. Because (a) it will help our crushing to go up; (b) that may be the need of the hour for the upcoming UP Election. And it will also give us a lot of raw material for our ethanol.

Management anticipates an increase in SAP, linking it to political considerations (UP Election) and its potential to improve cane availability for crushing and ethanol production, despite being a cost increase.

Asked by Prashant Biyani

So, definitely, 58% is on the lower side. So, it is basically coming from China, this thing. If we look country wise, I do not think this figure is like this at all. China has one single facility of 300,000 tons, which is not able to ramp-up capacity is what I understand. Not for want of a market, but for want of their own internal technology or whatever those things are.

Management clarifies that the low global PLA utilization is primarily due to issues with a large Chinese facility, not lack of market demand, reinforcing confidence in their own project's ramp-up.

Asked by Shailesh Kanani

I would be very disappointed if it took me 1.5 years or 1 year. ... The target is max six months.

Management sets an aggressive target of achieving optimum PLA utilization within six months of commissioning, indicating high confidence in their technology and execution capabilities.

Asked by Krishan Parwani