Balrampur Chini Mills Limited — Q4 FY25 earnings call

as of 31st of March, we are holding around 7.1 lakh tonnes of sugar and in the month of April, we also produced something. If you take that into account, it will be around 7.5 million tonnes. This entire inventory will be liquidated within November. Thereafter, depending upon the quota allocation, we will have to assume something. But if you see our last 2 years data, we have been in the region of selling around 9.4 lakh tonnes of sugar on an annual basis. So maybe 10 lakh tonnes is what we can, but this is a guess as of now.

Provides management's outlook on future sugar sales volumes and inventory management strategy.

Asked by Shailesh Kanani

So right now, as we have informed you, our price is around Rs.41/kg. I think this is what has been prevailing in this quarter, approximately around this range. So, I would say that this price level should definitely maintain. And the rest would depend on the government's policy for next year. So, if at all, we'll see a marginal uptick in the coming months.

Gives management's expectation for sugar pricing, a key revenue driver, and acknowledges government policy influence.

Asked by Shailesh Kanani

Last year, the production was restricted on account of that the conversion cost was on a higher side. The loaded conversion cost on the syrup quantity was on a higher side.

Clarifies the operational reason behind a specific cost dynamic in the distillery segment.

Asked by Shailesh Kanani

So our ultimate goal is cane availability right, how much can I crush. So that is not always dependent on areas. We have actually seen that it depends more on yield than on area in the past 3 years at least I can say that pretty confidently. So even when our area was increasing, the cane was not increasing. But as the area stays a bit stagnant, the yields start to also improve a little bit. So, it's a sort of balancing act. And at the end of the day, our cane availability should remain strong.

Details the company's strategy for cane procurement, emphasizing yield improvement and varietal balance over just increasing area.

Asked by Shailesh Kanani

I don't think that messages in that manner, which you said I think there's a statement of saying E30 by 2030, I mentioned that in my opening remarks. So, let's understand what happened this year. To the best of our knowledge, the OMCs and the Petroleum Ministry got a bit stingy and they wanted to maximize profits. The impact of that will be very severely felt in future if they do not repair the mistake. So even now, if I go back to mathematics for the oil company, the maize-based ethanol is being bought at Rs.71.86 per liter and the juice ethanol is at Rs. 65.61 per liter. So there is no basis of paying Rs. 6 per liter higher for maize ethanol... So, we are back on even keel or we are in an advantage against maize on the concept of cultivation. Secondly, this hurt and this pain point has now to the best of our knowledge been understood by the government. So one cannot repair the past, but I think the future remains linkage back to FRP, but too early. But one is definitely over.

Addresses the critical regulatory and economic challenges facing the distillery segment and the viability of the E30 blending program.

Asked by Sanjay Manyal

No, no, no. I think this is not the right way to look at it. In my opinion, it's a sort of a temporary phase when there is a shift happening as you know or maybe you don't know, but acclimatization of any new variety in any new place takes a little bit of longer time... The future looks very good because the research and the varieties which are coming out, actually have very good potential and that too for more varied circumstances as well.

Explains the reasons behind current recovery trends and the company's confidence in future cane varieties, mitigating concerns about varietal shifts.

Asked by Sanjay Manyal

So that's a good question actually. It's hard to sort of predict one and a half years out what the prices will be, but it comes to a $2.5 only on capacity. But this is of course going to depend on the market forces and where we land. And historically it's even gone to $4. So, what is to say it can't go to $4? So, the point is that $2.5 is not a bad assumption in my opinion, but that is what the 80,000 into 250 is 2000. So that is what we try to predict. But having said that, it's not completely in my control.

Addresses the revenue and profitability outlook for the new PLA business, acknowledging market dynamics and historical price volatility.

Asked by Krishan Parwani

No. It's not required for food grade. Food grade certification is required for food grade like FSSAI and things like that in our country. Post that USFDA might be required for the compound or the converter who is then finally making the product. For us, the food grade, in fact, the compostability and FSSAI approvals are already well underway. So, it doesn't affect us directly those things. I also wanted to put in an interesting metric since you're talking about PLA and its applications. So India's consumption of straws alone is 100,000 tonnes of resin and PLA straws have been approved by BIS and this is a very big win, I would say as of last month or so, and it should be gazetted soon and this is sort of a, I just want to show that our volume is only 80,000 tons. India's one single application also if we capitalize on, the market is 100,000 tonnes large. So, I am not too stressed on where the PLA will go per say.

Provides clarity on regulatory requirements for PLA and highlights the significant market potential within India for specific applications like straws.

Asked by Krishan Parwani