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Balrampur Chini - Higher volumes drive topline…
Balrampur Chini reported its Q5FY11 results. The sales grew by ~21% to
| 530.6 crore from | 433.6 crore in Q1FY11 on the back of higher
volumes. However, the margins dipped to 13.6% compared to 30.4% in
Q1FY11 on the back of a fall in realisation to | 28.6/kg against | 30.3/kg in
the corresponding quarter. The raw material cost also increased by ~57%
to | 389.6 crore. Interest cost and depreciation provisioning during the
quarter were on the same levels as in Q1FY11 and stood at | 17.4 crore
and | 28.1 crore against | 17.3 crore and | 26.9 crore, respectively. Lower
EBITDA at | 72.4 crore in Q5FY11 against | 131.6 crore in Q1FY11
dragged the bottomline also. It dipped ~70% to | 23.4 crore against |
76.6 crore in Q1FY11.
Operational highlights
The company produced 1.83 lakh tonnes (lt) of sugar during the quarter
against 1.63 lt in Q1FY11 at an average recovery rate of 9.05% compared
to 8.96% in Q1FY11. The average cane cost for the quarter was | 216.4
per quintal. The total quantity of sugar sold was 1.49 lt compared to 1.27
lt in Q1FY11. Currently, the company holds 1.4 lt of inventory at | 28.7 per
kg. The total distillery sales volume stood at 4969.7 kilolitre (kl) in Q5FY11
compared to 3560 kl in Q1FY11. The total units of power sold stood at
11.3 crore units against 8.4 crore units in Q1FY11.
Valuation
At the CMP of | 73, the stock is trading at 20x and 10.1x its FY11E and
FY12E EPS of | 3.6 and | 7.2. With lower cane cost at ~| 216/quintal
compared to ~| 241 /quintal last year and domestic realisations expected
to remain above | 30/kg, we believe the company’s earnings would
improve in FY12E. The stock is trading below the lower end of its
replacement cost band. However, due to the current market volatility and
macro headwinds, which may continue to prevail for some time, we have
reduced the valuation multiple for the stock. Hence, we have valued it at
12x its FY12E EPS of | 7.2. We have assigned it a target price of | 90 and
maintained our rating of STRONG BUY on the stock.
With domestic production estimates declining ~1.5 million tonnes (MT) to
24 MT in SY11 due to the dip in area under cane acreage and also a
revision in the global surplus estimates to 1.3 MT from 2.7 MT earlier in
August, 2010 we believe sugar prices both in the domestic and
international markets would remain higher at around | 30/kg and 30
cents/lb respectively. Also, with the fall in production estimates and
compulsory exports under Advanced License Scheme (ALS) of ~1.2 MT
to be met before March, 2011, inventory levels for the country could fall
to as low as 1.5 months only.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Balrampur Chini - Higher volumes drive topline…
Balrampur Chini reported its Q5FY11 results. The sales grew by ~21% to
| 530.6 crore from | 433.6 crore in Q1FY11 on the back of higher
volumes. However, the margins dipped to 13.6% compared to 30.4% in
Q1FY11 on the back of a fall in realisation to | 28.6/kg against | 30.3/kg in
the corresponding quarter. The raw material cost also increased by ~57%
to | 389.6 crore. Interest cost and depreciation provisioning during the
quarter were on the same levels as in Q1FY11 and stood at | 17.4 crore
and | 28.1 crore against | 17.3 crore and | 26.9 crore, respectively. Lower
EBITDA at | 72.4 crore in Q5FY11 against | 131.6 crore in Q1FY11
dragged the bottomline also. It dipped ~70% to | 23.4 crore against |
76.6 crore in Q1FY11.
Operational highlights
The company produced 1.83 lakh tonnes (lt) of sugar during the quarter
against 1.63 lt in Q1FY11 at an average recovery rate of 9.05% compared
to 8.96% in Q1FY11. The average cane cost for the quarter was | 216.4
per quintal. The total quantity of sugar sold was 1.49 lt compared to 1.27
lt in Q1FY11. Currently, the company holds 1.4 lt of inventory at | 28.7 per
kg. The total distillery sales volume stood at 4969.7 kilolitre (kl) in Q5FY11
compared to 3560 kl in Q1FY11. The total units of power sold stood at
11.3 crore units against 8.4 crore units in Q1FY11.
Valuation
At the CMP of | 73, the stock is trading at 20x and 10.1x its FY11E and
FY12E EPS of | 3.6 and | 7.2. With lower cane cost at ~| 216/quintal
compared to ~| 241 /quintal last year and domestic realisations expected
to remain above | 30/kg, we believe the company’s earnings would
improve in FY12E. The stock is trading below the lower end of its
replacement cost band. However, due to the current market volatility and
macro headwinds, which may continue to prevail for some time, we have
reduced the valuation multiple for the stock. Hence, we have valued it at
12x its FY12E EPS of | 7.2. We have assigned it a target price of | 90 and
maintained our rating of STRONG BUY on the stock.
With domestic production estimates declining ~1.5 million tonnes (MT) to
24 MT in SY11 due to the dip in area under cane acreage and also a
revision in the global surplus estimates to 1.3 MT from 2.7 MT earlier in
August, 2010 we believe sugar prices both in the domestic and
international markets would remain higher at around | 30/kg and 30
cents/lb respectively. Also, with the fall in production estimates and
compulsory exports under Advanced License Scheme (ALS) of ~1.2 MT
to be met before March, 2011, inventory levels for the country could fall
to as low as 1.5 months only.
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