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Balrampur Chini Mills Limited company details report

Balrampur Chini Mills Limited incorporated in 1975, is one of the largest integrated sugar companies in India. The allied businesses of the company comprise of manufacturing of downstream products like ethanol, power (co-generation), alcohol, molasses and bagasse. Its products include sugar, molasses, alcohol, ethanol, bagasse and power. It sells its products within India and export as per the government quota allocation. The company has identified sugar and distillery as its distinctive operating segments. The company presently has 10 integrated manufacturing units of sugar, ethanol and co-generation located in Eastern and Central Uttar Pradesh (India), having an aggregate sugarcane crushing capacity of 80,000 TCD (tons of cane per day), distillery capacity of 1,050 KLPD (kilolitres per day) and 175.7 MW (megawatt) saleable co-generation capacity. It has grown its capacity by well-planned capacity expansion projects and the acquisition of existing companies over recent years. The SS (sugar season) in India is from October to September and the ethanol supply season is from December to November.

Segment wise Revenue

Products wise revenue

#SALES #GROWTH 5 Year CAGR 5.5%

In FY25, net sales was ~₹5,415 cr, down by ~3% YoY. Revenue growth from the sugar segment grew by 4% YoY while revenue from the distillery segment degrew by 15% YoY. The revenue decline was primarily driven by lower ethanol production & sales due to regulatory restrictions and stagnant prices. Additionally, reduced sugar output owing to reduced cane availability and lower recovery rates contributed the decline in sales. In Q1 FY26, net sales was ~₹1,542 cr and it grew by 8.5% YoY. Revenue from sugar segment was ₹1,168 cr and it increased by 3% YoY while revenue from distillery segment grew by 9% YoY and stood at ₹461 cr. owing to higher volumes and better realization. During the quarter, the company crushed 21.78 lac quintals of sugarcane and it declined by ~66% YoY.

#EBITDA #GROWTH 5 Year CAGR 2.7%

In FY25, EBITDA stood at ₹704 cr, reflecting a 10.4% decline YoY. The company’s profit in the distillery segment was impacted due to rising input costs and stagnant realization rates while in the sugar segment they witnessed reduced sugarcane availability due to adverse weather conditions and crop disease. In Q1 FY26, EBITDA stood at ₹134 cr and it declined by 19.2% YoY owing to fall in sugar production and under absorption of fixed overhead due to the shortened season. During the quarter, the company produced 2.48 lac quintals of sugar as compared to 7.16 lac quintals of sugar in Q1 FY25.

#EBITDA #MARGIN

In FY25, EBITDA margin was 13%, contraction of 105 bps YoY. In Q1 FY26, EBITDA margin was 8.7%, contraction of 299 bps YoY.

#PAT #MARGIN

In FY25, PAT margin was 7.42%, contraction of 167 bps YoY. In Q1 FY26, PAT margin was 2.7%, contraction of 173 bps YoY.

#PAT #GROWTH

In FY25, PAT was ₹402 cr, a decline of 21% YoY. This was mainly due to the decision of the government to keep ethanol prices unchanged despite the usual FRP (fair remunerative price) linked hike. Additionally, reduction in net sugar recovery rate recovery impacted the performance of this segment. In Q1 FY26, PAT was ~₹42 cr and it declined by ~34% YoY

#ROCE

In FY25, the company’s operating profitability declined while its capital employed increased which led to a reduction in ROCE.

#ROE

In FY25, the metric declined as the company's bottom line deteriorated while the net worth increased.

#COMPANY #POTENTIAL

• India’s net sugar production for the SS (sugar season) 2025-26 season is estimated to be ~30.4 MMT (million metric tonnes), a growth of 16.5% YoY. This is based on early estimates from satellite imagery, rainfall data and field reports. The increase is attributed to favorable monsoon conditions and improved crop health, despite only a marginal increase in the overall sugarcane area. • The industry expects a diversion of ~4.5 MMT of sugar to ethanol and ~2 MMT for exports. This will ensure market stability and prevent pricing pressure on sugar. • FRP (Fair & Remunerative Price) of sugarcane for SS 2024-25 has been revised to ₹340 per quintal and is linked to a basic recovery of 10.25%. • The company is actively pursuing policy support from the government for revisions to ethanol pricing and MSP (minimum sale price) of sugar. A potential increase in the State Advised Price (SAP) for sugarcane is likely, which could help increase crushing and provide raw material for ethanol. The company is hopeful that ethanol prices will increase in FY26. • The central government has approved the national policy on biofuels aimed at achieving 20% blending of ethanol in petrol. In ESY (Ethanol Supply Year) 2024-25, the country achieved ethanol blending of 17.98%. • The National Policy on Biofuels allows the use of food grains for biofuel production during surplus phases. It also promotes the use of feedstock such as corn, rotten potatoes, damaged or unfit food grains and agricultural residues for ethanol production. • A reduced GST (goods and service tax) of 5% will be applied to ethanol, while ENA (Extra Neutral Alcohol) will be exempted from GST.

#COMPANY #OUTLOOK

• Going forward, the company expects the government to restore FRP linked ethanol pricing, which would improve margins and support blending targets. • It anticipates cane availability to be ~15%-20% higher in the current sugar year. Its cane development initiatives are likely to lead to an improvement in both cane availability and recovery for the next year. Further, the dependency on the red rot affected Co0238 variety has been reduced to ~6% thereby lowering disease risk and aiding stable sugar recoveries. • Over the next 2-3 years, it expects to witness steady growth in cane availability with improved varieties. It is developing an inhouse high yielding variety of sugarcane. • They envisages sugar sales in FY26 to exceed 10 lakh tonnes backed by higher inventory and planned liquidation. • The management highlighted that due to delayed planting in 2-3 factories, they may experience slightly lower cane availability as the yields will have less months to grow. • The company anticipates a positive year for cane production, with yields looking better due to favorable rain distribution. In FY26, they are hopeful for an increase in crushing and recovery compared to FY25 levels. • The management anticipates that the crushing season to start early in SS 2025-26 backed by festival timings and favorable weather conditions. • They anticipate higher diversion of sugarcane towards ethanol if prices are revised upwards. • Going forward, the PLA facility would generate revenue of ~₹2,000 crore with an EBITDA margin of ~35%. Further, this facility is expected to be commissioned in Q3 FY27. CASE STUDY

Balrampur Chini Mills 380-445
Expected level 550
Support 350

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