Balrampur Chini Mills Ltd · NSE:BALRAMCHIN
Balrampur Chini Mills — Q2 FY23 Earnings Presentation
64 slides from Balrampur Chini Mills's earnings presentation, Nov 9, 2022
Slide 1: Results Presentation cover letter to stock exchanges
9th November, 2022 National Stock Exchange of India Limited BSE Limited Listing Department, Exchange Plaza, The Corporate Relationship Department 5th Floor, Plot No. C/1, G Block, 1st Floor, New Trading Wing, Bandra Kurla Complex, Bandra (E) Rotunda Building, Phiroze Jeejeebhoy Tower, Mumbai- 400051
Slide 2: Q2FY23 Results Analysts Presentation
Balrampur Chini Mills Limited Q2FY23 Results Analysts Presentation 9th November 2022 “STRETCH” Graduating the Company from one level to another
Slide 3: Safe Harbour
Certain statements made in this document may constitute forward- looking statements. These forward-looking statements are subject to certain risks and uncertainties like government actions, local political or economic developments, agricultural policies, climatic conditions, technological risks, and
Slide 4: Conference Call Details
Conference Call Details Timing 12:30 noon IST on Thursday, November 10, 2022 Conference dial-in Primary number: +91 22 6280 1141 / 7115 8042 Toll free Number Singapore: 800 101 2045 Hong Kong: 800 964 448 USA: 1 866 746 2133 UK: 0 808 101 1573 3
Slide 5: Table of Contents
Table of Contents 1 Message from the Chairman and Managing Director 5 2 Brief perspective about our company 6-8 This presentation comprises of eight parts 1 Our Q2 performance in numbers 9-14 2 The performance of our principal business 15-31 3 Our treasury management 32-38 4 Global and Indian sugar
Slide 6: A message from the Chairman and Managing Director
➢ The Company reported muted performance during the quarter owing to a challenging operating A message from the environment in our sugar division. Cane crushing volume were lower and recovery declined Chairman and during the previous sugar season 2021-22 on account of untimely substantial rainfall a
Slide 7: A Brief perspective about our company
A Brief perspective about our company BCML – A multi-product integrated Company with manufacturing capability of Sugar, Ethanol and Co-Generation 10 Existing Expansion Capacities Units In post Capacities manufacturing units in progress expansion close proximity Sugar (TCD) 77500 - 77500 Saleable Cog
Slide 8: Robust and Sustainable Financial Performance on the back of structural changes
Robust and Sustainable Financial Performance on the back of structural changes Segmental Revenues (Rs. Cr.) * Segmental PBIT (Rs. Cr.) Sugar Distillery Others Sugar Distillery Others 10 11 5 3 20 22 12 1001 842 566 8 264 382 344 323 496 4,263 4,352 4,423 3,822 389 329 338 296 FY22 FY21 FY20 FY19 FY2
Slide 9: Robust and Sustainable Financial Performance (contd.)
Robust and Sustainable Financial Performance on the back of structural changes (contd.) EBITDA (Rs. cr) EBITDA Margin (%) TCI (Rs. cr) TCI Margin (%) 565 700 714 682 689 511 502 469 13.2% 16.1% 452 14.4% 14.8% 14.4% 10.6% 10.6% 9.8% 10.3% 217 4.9% FY22 FY21 FY20 FY19 FY18 FY22 FY21 FY20 FY19 FY18 Su
Slide 10: Our Q2 performance in numbers
➢ PART ONE Our Q2 performance in numbers 9
Slide 11: This is what we achieved in Q2FY23 (standalone numbers)
This is what we achieved in Q2FY 23 (standalone numbers) (38.26) (15.93) (1.53) Rs. cr. of total Rs. cr. of EBITDA Rs. earnings comprehensive income (TCI) per share Rs. 82.05 cr. in the Rs. 134.83 cr. in the Rs. 3.89 in the corresponding quarter, corresponding quarter, corresponding quarter, Q2FY 22
Slide 12: Financial performance (standalone numbers)
Financial performance (standalone numbers) Q2 FY23 Q2 FY22 Change H1FY23 H1FY22 Change FY22 FY21 FY20 FY19 FY18 (Rs. Cr) (Rs. Cr) (%) Particulars (Rs. Cr.) (Rs. Cr.) (%) (Rs. Cr.) (Rs. Cr.) (Rs. Cr) (Rs. Cr) (Rs. Cr) 1113.10 1213.83 -8.3% Revenue from Operations 2193.18 2354.27 -6.8% 4846.03 4811.66
Slide 13: Performance highlight (standalone numbers)
Performance highlight (standalone numbers) Rs. in Crs Revenue, EBIDTA& EBIDTA Margins 6000.00 5000.00 4000.00 3000.00 1.3% 11.4% 11.1% 14.4% 14.8% 14.4% 16.1% 10.3% 2000.00 -1.4% 1000.00 0.00 -1000.00 Q2FY23 Q2FY22 H1FY23 H1FY22 FY22 FY21 FY20 FY19 FY18 Revenue 1113.10 1213.83 2193.18 2354.27 4846.0
Slide 14: Our Q2 performance (standalone numbers) explained
Our Q2 performance (standalone numbers) explained Q2FY23 Q2FY22 Variance Key Reasons (Rs. Cr) (Rs. Cr) (%) Lower sugar & ethanol volume. Revenue from operations 1113.10 1213.83 -8.3% Lower sugar sale quota due to lower production. Mainly on account of sale of scrap consequent to Other income 11.73 4
Slide 15: Our Consolidated Financial Performance
Our Consolidated Financial Performance Revenue (Rs. Cr) TCI * (Rs. Cr) 512.5 570.7 4,846.0 4,811.7 4,741.3 4,400.7 461.0 479.2 4,285.8 2,354.3 160.2 227.1 2,193.2 1,113.1 1,213.8 83.6 -35.9 -24.4 Q2 Q2 H1 H1 FY22 FY21 FY20 FY19 FY18 Q2 Q2 H1 H1 FY22 FY21 FY20 FY19 FY18 FY23 FY22 FY23 FY22 FY23 FY22
Slide 16: The performance of our principal businesses
➢ PART TWO The performance of our principal businesses 15
Slide 17: Business Overview: Sugar
“Attractively Business placed”- Management’s Overview Sugar overarching 5 messages for Q4FY22 79.91 936.20 1021.81 % of Company’s Rs. cr. revenues cr. revenues in revenues, in Q2 FY 23 Q2 FY 22 Q2 FY23 8.38% decrease 16
Slide 18: Policy intervention from Government
Policy intervention from Government ▪ FRP: Fair & Remunerative Price (FRP) of sugarcane for the sugar season 2022-23 has been increased to Rs. 305 per quintal (linked to a basic recovery of 10.25%) as compared to Rs. 290 per quintal in the sugar season 2021-22 (linked to a basic recovery of 10%). ▪
Slide 19: Economics of Sugarcane vs Other Crops
This is whatofour Economics Sugarcane sugar business vs Other achieved Crops Crops Relative Gross Returns over A2+FL cost with respect to sugarcane Source: CACP Report – 2020-21 2021-22 2022-23 Sugarcane 2022-23; Kharif 2022-23; Sugarcane 100 100 100 Rabi 2023-23 Cotton + Wheat 50 45 53 In addition
Slide 20: This is what our sugar business achieved
This is what our sugar business achieved ➢ 3.22% increase in average sugar realizations in Q2 FY23 (compared with Q2 FY22) ➢ Bottomline: Lower sugar volumes partly off-set by higher realizations Inventory size Inventory valuation Cane diversion 11.90 18.89 34.82 33.01 79.8% 79.9% Lac quintals, Lac q
Slide 21: Performance Overview – Sugar
Performance Overview – Sugar Q2 Q2 H1 H1 Financial data U.O.M. Change Change FY22 FY21 FY20 FY19 FY23 FY22 FY23 FY22 (%) (%) Segment (Rs. Cr) 936.20 1021.81 -8.38% 1850.57 1966.22 -5.88% 4262.98 4351.68 4423.26 3822.44 Revenues * Segment PBIT (Rs. Cr) -90.18 14.32 - -145.89 21.15 - 296.30 329.47 389
Slide 22: Business Overview: Sugar - Operational numbers
Business Overview: Sugar - Operational numbers Sugarcane Crushed (lac quintals) Sugar Recovery (%) 1103.62 (post B-heavy diversion) 885.42 1032.61 1020.30 927.83 11.27 11.44 11.58 10.84 9.72 10.27 10.63 46.21 * 43.32 Q2FY23 Q2FY22 H1FY23 H1FY22 FY22 FY21 FY20 FY19 FY18 Q2 Q2 H1 H1 FY22 FY21 FY20 FY1
Slide 23: Movement in Sugar Costs & Valuation
Movement in Sugar Costs & Valuation (Rs./qtl. of sugar) H1FY23 7,635 H1FY22 6,431 Sugar inventory as on 30th Sep. 4,021 3,482 3,238 3,301 2022 stood at 11.90 lac Cane Cost Cost of Production Sugar Inventory Cane Cost Cost of Production Sugar Inventory quintals valued Valuation Valuation Cane Crushed
Slide 24: Outlook of our sugar business
This is the whatoutlook our sugar of our business sugar business achieved ➢ Expectation of better cane availability in ensuing season ➢ Asset modernization and upgradation are expected to be completed by November 2022 ➢ Relatively low incentive in our cogeneration business is on account of moderated
Slide 25: Business Overview: Distillery
Business Business Overview overview: -Distillery Sugar Distillery revenues 229.87 Rs. cr. Q2FY 23 256.14 Rs. cr. Q2FY 22 10.26% lower 19.62 Distillery PBIT % of revenues, Q2, FY23 72.97 Rs. cr. Q2FY 23 108.92 Rs. cr. Q2FY 22 33.01% lower 24
Slide 26: Rising Fuel Ethanol Supply to meet huge Demand in India
Rising Fuel Ethanol Supply to meet huge Demand in India Ethanol Procurement by OMC’s (in crore litres) 9.57% Blending in Petrol achieved % 8.0% 5.0% 5.1% 4.2% 3.5% 2.33% 2.1% 1.53% 67 151 189 173 290 445.2 38 111 67 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 ** ** OMC ha
Slide 27: Road-map for Ethanol Blending in India 2025-26
Road-map for Ethanol Blending in India 2025-26 = total Distillation Capacity Ethanol Demand Ethanol available for fuel (in million ltrs) (in million ltrs) (in million ltrs) 9880 10160 14300 15000 12880 13500 11750 9880 9750 8280 6980 8190 7400 7070 6660 5480 6840 7100 7000 4230 5920 6280 4370 4380 4
Slide 28: Performance of distillery business
Performance of distillery business ➢ Lower volumes and realizations leading to lower profitability B-heavy Molasses Stock Alcohol Stock 0.92 1.43 Ethanol Sale (B-heavy) lac qtl. lac qtl. as on 30th Sep. as on 30th Sep. 0.29 1.28 2022 2021 3.22 3.73 Cr BL Cr BL Cr BL Cr BL inventory, inventory, in Q2
Slide 29: Business Overview – Distillery
Business Overview – Distillery Q2 Q2 H1 H1 Financial data U.O.M. Change Change FY22 FY21 FY20 FY19 FY23 FY22 FY23 FY22 (%) (%) Segment Revenues * (Rs. Cr) 229.87 256.14 -10.26% 527.97 526.49 0.28% 1001.41 841.52 566.38 495.82 Segment PBIT (Rs. Cr) 72.97 108.92 -33.01% 171.40 226.48 -24.32% 382.36 34
Slide 30: Business Overview – Distillery - Operational numbers
Business Overview – Distillery - Operational numbers Total Production * (Cr BL) Ethanol Production from C-heavy Ethanol Production from B-heavy molasses route (Cr BL) molasses route (Cr BL) 16.31 17.06 13.30 12.76 10.18 10.66 10.29 9.00 8.73 7.99 7.90 7.60 7.45 8.10 4.84 3.22 3.62 3.58 3.87 4.25 0.2
Slide 31: Outlook of our distillery business
This is the whatoutlook our sugar of our business distilleryachieved business ➢ Encouraging long-term government policy on increasing the use of ethanol in India’s vehicular fuel mix ➢ Profitable foundation for sustainable growth ➢ Projected increase in distillation capacity from 560 KLPD to 1050 KL
Slide 32: Business overview: Cogeneration
Business overview: Cogeneration Power sales (Cr units) Average Realization Production (Cr units) (Rs. per unit) 66.38 104.97 56.80 4.94 4.81 90.24 87.41 52.61 80.65 72.72 42.63 34.93 3.15 3.34 3.33 3.35 3.30 3.17 3.06 11.44 11.72 4.48 2.98 3.35 0.62 0.70 3.59 Q2 Q2 H1 H1 FY22 FY21 FY20 FY19 FY18 Q2
Slide 33: Our treasury management
➢ PART THREE Our treasury management 32
Slide 34: Factors influencing our treasury management
Factors influencing our treasury management • Our product mix (to manufacture sugar or produce ethanol) • To sell sugar within India or export • The government’s allocation of sugar sale quota to the company • The terms of trade related to sales • The cost of debt on the company’s books / external c
Slide 35: Major Working Capital Components / Long Term Debt
Major Working Capital Components / Long Term Debt Long Term Debt Short Term Debt [excluding current Cane Dues (including current maturities) maturities of long term debt] (Rs. Cr.) (Rs. Cr.) (Rs. Cr.) 683 1,395 606 1,059 496 524 484 960 891 446 866 363 376 316 257 216 124 H1FY23 H1FY22 FY22 FY21 FY2
Slide 36: How we managed our cash flow
How we managed our cash flow Strong cash flow funds multiple drivers of value for shareholders Capital INR 1155 cr Expenditure (33.8%) Strong ROBUST Cash Flow Dividend + SHAREHOLDER VALUE # INR 413 cr Taxes CREATION (INR 3419 cr (12.1%) FY17-FY22) Buy-back + Taxes INR 908 cr 83% utilized for distrib
Slide 37: Cash Flow Analysis – (standalone)
Cash Flow Analysis – (standalone) Rs. Cr Sl. H1 H1 Particulars FY 21–22 FY 20–21 FY 19–20 FY 18–19 FY 17-18 no. FY22-23 FY21-22 1 Profit / (Loss) before tax (23.46) 201.68 655.61 596.11 554.93 595.03 332.18 Cash generated from / (used) in 2 operating activities 1520.77 1553.37 694.65 649.21 849.61 (
Slide 38: Treasury management update
Treasury management update • Long-term credit rating as assigned by CRISIL stands at AA+ (Stable) and the short-term rating at A1+ As of 30th September 2022, long term borrowings of the Company stands at Rs. 484.45 crores which carries low interest rate of ~3.6%-5.00% (net of interest subvention). R
Slide 39: Share buyback
Share buyback 5 40.40 Number of successive Lakh maximum shares at maximum price, 360.00 (size of the sixth share Rs. per share, share buybacks in five years 6th buyback) maximum price of sixth share buyback Buy-back approved by the Board in its meeting held on 9th November 2022 145.44 42.42 Rs. cr.
Slide 40: Global & Indian Sugar Sector Overview
➢ PART FOUR Global & Indian Sugar Sector Overview 39
Slide 41: The company's sugar prospects are influenced by global and domestic trends
The company’s sugar prospects are influenced by trends in the global and domestic sugar markets 40
Slide 42: The Sugar Global Scenario
TheSugar Global Global Scenario Production Outlook ( metric million tonnes) Total Global production at 173.5 MMT Total Global production estimated at 181.7 MMT In Brazil higher sugar mix along with reduction in gasoline prices by Petrobas is likely to result in higher sugar production. Both Thailand
Slide 43: Factors influencing global sugar industry trends
Factors influencing global sugar industry trends 1 Global oil prices Million tonnes, 2 Government policies catalyzing the shift between sugar to ethanol 173.5 global sugar production, 2021- Brazil Outlook (22-23): 22 • Energy taxes were reduced in Brazil which brought the Ethanol 3 Climatic impact o
Slide 44: India's sugar inventory is correcting downwards
India’s sugar inventory is correcting downwards 43
Slide 45: Domestic Sugar Balance Sheet
Domestic Sugar Balance Sheet ( metric million tonnes) Sugar Season 2021-22 Sugar Season 2022-23 (Estimated) 28.0 27.4 35.8 36.5 11.1 8.0 * 8.2 5.5 6.0 5.5 SS 22 Opening Production Domestic Exports SS 22 Closing SS 23 Opening Production Domestic Exports SS 23 Closing Consumption Consumption Managed d
Slide 46: Outcome of the declining national sugar inventory
Outcome of the declining national sugar inventory Increased Superior profitability prospects for Strong sugar of the integrated realisations sugar sugar business companies 45
Slide 47: India: Has emerged as world's Largest Sugar Producing Country
India: Has emerged as world’s Largest Sugar Producing Country State-Wise Sugar India's Sugar Export India's Sugar Production Production (MMT) (MMT) Net of sugar sacrifice Others 11.10 35.80 36.50 15% 32.48 33.16 31.20 7.20 27.41 5.80 Maharashtra 3.80 39% Karnataka SS 0.46 17% 2021-22 SS17-18 SS18-19
Slide 48: India: World's Largest Sugar Consumer
India: World’s Largest Sugar Consumer India's Sugar Consumption India's Sugar Consumption (MMT) Direct Bulk B2B Households 35% Consumers 65% 27.40 28.00 26.50 25.39 25.50 25.30 SS17-18 SS18-19 SS19-20 SS20-21 SS21-22 SS22-23 Per capita consumption in India as compared to global average (Est.) is at
Slide 49: Current Sugar Sector Scenario: Man-Induced Sugar Cycle No Longer Prevails
Current Sugar Sector Scenario: Man-Induced Sugar Cycle No Longer Prevails Improvement in sugarcane yield / recovery Setting standard floor price for sugar i.e. Robust Ethanol Prudent Minimum Selling Price (MSP) blending Government programme policy O U Addressing excess sugar through conversion T int
Slide 50: The strategic direction of our company
➢ PART FIVE The strategic direction of our company 49
Slide 51: Preparing for the next growth phase
Preparing for the next growth phase (excluding normal / running capex) Expanded Distillery Capacity (KLPD) Gularia 170 1050 capacity 320 Post from 160 KLPD to 200 expansion; KLPD at 560 the nominal Company’s capex of ~Rs.15 crs distillation capacity Existing Maizapur (Greenfield) Balrampur (Expansio
Slide 52: Moving towards next orbit
Moving towards next orbit Expansion Creating value into for all Robust and Ethanol stakeholders Strong integrated Sustainable business model Financial performance ➢ Emerging as a key growth driver for the ➢ Successfully completed five Company going consecutive Buy-Backs along with forward dividends
Slide 53: ESG and enhanced stakeholder value
➢ PART SIX ESG and enhanced stakeholder value 52
Slide 54: Our ESG vision
Our ESG vision To retain our position as one of the “greenest” companies in India’s sugar sector The relevance of same to Company’s business The nature of our energy We are engaged in a social A sustainable business can products: business, marked by be only built through a engagements with around st
Slide 55: Our ESG Framework
Our ESG Framework Environmental Social Governance Our environment approach has been Our Company takes a holistic Our Governance policies are framed woven around the elements of Plan- approach to sustainable value on the basis of transparency, Mitigate-Adapt-Resilience. creation for all its stakehold
Slide 56: Our ESG Achievements
Our ESG Achievements Total effluents Improvement Steam consumption No. of trees planted (Ltrs/MT)) Improvement (per MT of cane) Improvement (units) 196.16 0.44 1,50,137 186.98 0.43 177.45 0.42 50,298 45,700 SS 20 SS 21 SS 22 FY 20 FY 21 FY 22 FY 20 FY 21 FY 22 Ground water drawal Total afforested ar
Slide 57: Socially Conscious Corporate Citizen
Socially Conscious Corporate Citizen 206 solar street CSR spend (Rs. Cr) lights installed 60 sanitary 10.93 10.68 11.20 dispensers 6.11 installed 2.93 3.22 More than 10 lac COMMUNITY individuals FY19 FY20 FY21 FY22 H1FY22 H1FY23 DEVELOPMENT benefitted HEALTH EDUCATION EMPOWERMENT AGRICULTURE ENVIRON
Slide 58: Our governance framework
Our governance framework Strategic Focus on de- Investment in guidance from risking coupled digitalisation, experienced with controlled processes and and diversified growth systems Board of Directors 57
Slide 59: Board of Directors
Board of Directors Vivek Saraogi – Chairman and Managing Director ➢ An eminent industrialist, is a veteran in the sugar industry and has been one of the youngest presidents of the Indian Sugar Mills Association. ➢ Former committee member of FICCI & the Indian Chamber of Commerce in Kolkata. ➢ Under
Slide 60: Shareholding Pattern
Shareholding Pattern Promoter Group Holding Foreign Holding Domestic Mutual Funds 42.42% 42.42% 42.42% 42.42% 41.40% 20.89% 16.40% 19.10% 14.72% 15.33% 17.00% 14.04% 13.39% 15.84% 16.22% Sept,22 June,22 Mar,22 Dec,21 Sept,21 Sept,22 June,22 Mar,22 Dec,21 Sept,21 Sept,22 June,22 Mar,22 Dec,21 Sept,21
Slide 61: Top 10 Non-Promoter Shareholding as on 30th September 2022
Top 10 Non-Promoter Shareholding as on 30th September 2022 Shareholder % Shareholding NIPPON LIFE INDIA TRUSTEE LTD-A/C (Under Various Funds) 4.68% ABU DHABI INVESTMENT AUTHORITY – MONSOON 1.55% L&T MUTUAL FUND TRUSTEE LIMITED (Under Various Funds) 1.52% GOLDMAN SACHS FUNDS - GOLDMAN SACHS INDIA EQU
Slide 62: Key events to watch out
Key events to watch out * State Advised Price (SAP) (for the State of U.P.) of sugarcane for the sugar season 2022-23 * Brazilian sugar production for the sugar season 2022-23 61
Slide 63: Contact Us
About Balrampur Chini Mills Limited Contact Us CIN: L15421WB1975PLC030118 Balrampur Chini Mills Limited (BCML) is one of the largest integrated sugar companies in India. The allied businesses of the For further information contact: Company comprise distillery operations and cogeneration of power. Th
Slide 64: Thank You
Thank You 63
Balrampur Chini Mills — Q2 FY23 Earnings Presentation on 6ix