Balrampur Chini Q3 Results Review - Healthy Distillery Performance Leads To All-Round Beat: Systematix

Systematix Report

Balrampur Chini Mill Ltd.s Q3 FY24 consolidated revenue rose 25% YoY to Rs 12.3 billion and beat our estimate of Rs 11.5 billion. Healthy 20%/58% YoY topline growth in the sugar/distillery segments, respectively, propelled this growth. The two segments saw increased volumes and realisations. Gross margin fell by 10 basis points to 27.2%, as the State Advised Price of cane was raised by Rs 200/tonne for Sugar Season 2023-24.

However, Ebitda surged by a healthy 42% YoY to Rs 1.1 billion, 22% higher than our estimate. Ebitda margin expanded 110 basis points to 9.2% (we estimated 8.1%). Interest cost increased by 34% YoY on higher interest rates.

Moreover, Balrampur Chini deployed internal accruals into a project that resulted in higher working capital. Other income jumped 166% YoY to Rs 539 million.

Consequently, adjusted profit after tax jumped 94% YoY to Rs 855 million (estimate of Rs 367 million). Management believes the government’s recent flipflop on ethanol procurement policy is an aberration and is confident that the Ethanol Blending Program will continue to operate in the next season with sufficient sugar stock availability.

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