Balrampur Chini Mills Limited

Balrampur Chini's internal estimates project gross sugar production at 325 lakh tonnes for FY26, with 35 lakh tonnes diverted, leading to a net production of 290 lakh tonnes. Of this, 4 lakh tonnes are contracted for exports, leaving 286 lakh tonnes for domestic consumption. Consumption estimates range between 288 and 290 lakh tonnes, suggesting no significant inventory addition and potentially a marginal depletion from the tight opening inventory of 5 million tonnes. Sugar prices for UP mills ranged between INR 41 and INR 41.5 per kilogram in February, with expectations of gradual increases. The company anticipates crushing over 10.5 crore quintals this year, representing a 6% growth over the previous year, and expects a 5-7% expansion in cultivated area.

The ethanol segment continues to face margin pressure due to the absence of price revisions for B-heavy and juice routes for the past three years, despite a 16.4% increase in Fair and Remunerative Price (FRP) and rising operating costs. Management expressed disappointment, noting that the requested revision would have had a negligible impact on Oil Marketing Companies (OMCs) and consumers. The government's decision not to revise prices raises questions about the future of large-scale diversion strategies and the E20 program. Current indications suggest no revision for C-heavy, B-heavy, and juice ethanol prices, leading to an unchanged pricing trajectory across all products.

The Polylactic Acid (PLA) project is progressing as planned, with construction activities in full swing and over 3,000 workers deployed. Approximately 90% of the imported equipment has arrived, and commissioning is targeted for October 2026. Cumulative project expenditures stood at INR 1,421 crore as of January 31, 2026, funded by INR 790 crore in debt and internal accruals. The company is actively trading imported PLA to gain technical feedback and establish its market presence. The total PLA market in India is expanding significantly, with imports nearly doubling to around 10,000 tonnes annually in 2025, along with a corresponding four- to five-fold multiple in PLA compounds.

Sugarcane crushing increased by 8.4% to 387.6 lakh quintals during the period, driven by early operations and improved capacity utilization. Despite a decline in overall sugarcane acreage, the company expects higher crushing levels due to additional area allocations and better yields from farmer engagement. The company has focused on mechanical control in pest and disease management, shifting budget from chemical inputs to labor-intensive methods, which has improved soil fertility and crop resilience. Efforts in varietal development have reduced red rot-affected varieties to low single digits, with the Co 14201 variety expected to constitute around 16% of crushing this year and further increase in the coming year.

Management highlighted the government's involvement in promoting PLA, specifically for Gutkha and pan masala packaging, recognizing it as a significant source of urban litter. Technical success has been achieved in converting PLA for existing legacy machines, with user and degradation testing underway. However, the government's approach to ethanol pricing was criticized, with management stating that the government should act as a system provider for the well-being of the country rather than a 'trader.' Despite repeated appeals, there has been no positive response regarding ethanol price revisions, indicating a lack of active consideration from the government.