Balrampur Chini Mills (BALRAMCHIN) Q2 24/25 earnings summary

Executive summary

• Sugar production for the upcoming season is forecasted at 28.3 million tons post-diversion, down from 32 million tons last year, with UP production stable but Maharashtra and Karnataka expected to see declines.

• High opening sugar inventory (8.5 million tons) is expected to meet domestic demand, but has pressured prices, prompting industry requests for higher MSP and export permissions.

• Ethanol blending reached 15% in 2024, targeting 18% this year and 20% by 2025, with all restrictions on sugar diversion for ethanol now lifted.

• Profitability declined in Q2 & H1 FY25 due to lower crushing, distillery restrictions, and government limits on ethanol feedstock, despite higher sugar volumes and realizations.

• The PLA bioplastics project is progressing on schedule, supported by significant state and central government incentives and a new bioplastic policy.

Financial highlights

• Q2 FY25 consolidated revenue declined 15.7% year-over-year to Rs. 1,298.0 cr; PBT margin dropped to -5.5% from 11.0%.

• H1 FY25 consolidated revenue was Rs. 2,719.6 cr, down from Rs. 2,929.1 cr year-over-year; PBT margin fell to 5.9% from 11.3%.

• Standalone net loss for Q2 FY25 was ₹350.42 lakhs, compared to a profit of ₹10,624.53 lakhs in Q2 FY24.

• An interim dividend of INR 3 per share was declared, totaling Rs. 60.52 crores, payable from 5th December 2024.

• Basic EPS for Q2 FY25 was Rs. 0.4, down from Rs. 7.1 in Q2 FY24.

Outlook and guidance

• Cane availability is expected to be similar to last year, with potential for improvement if winter rains occur and a shift to disease-free cane varieties.

• Lower diversion to ethanol is anticipated, which could support sugar availability.

• The PLA project is on schedule, with commissioning targeted for October 2026 and full utilization expected within six months of commercial production.

• Potential increases in ethanol prices, revised sugar MSP, and export policies could positively impact future results.