Balrampur Chini Mills Ltd · NSE:BALRAMCHIN
Balrampur Chini Mills — Q4 FY2023 Earnings Presentation
62 slides from Balrampur Chini Mills's earnings presentation, May 11, 2023
Slide 1: Exchange filing letter: Investor Presentation
11th May, 2023 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 Dal
Slide 2: Balrampur Chini Mills Limited Q4FY23 Results Analysts Presentation
Balrampur Chini Mills Limited Q4FY23 Results Analysts Presentation 11th May 2023 “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 12:00 noon IST on Friday, May 12, 2023 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 Q4 performance in numbers 9-14 2 The performance of our principal business 15-31 3 Treasury management 32-37 4 Global and Indian sugar sector o
Slide 6: A message from the Chairman and Managing Director
" Company was able to deliver satisfactory results in Q4FY23 as compared to subdued performance in 9MFY23. A message from Legacy effect of last year’s lower crushing volume and delayed start of current season coupled with untimely rains impacted our 9MFY23 results. However, we achieved better capaci
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 manufacturing units in close proximity Among the Principle largest business sugar integrated sugar + distillery companies 80000 * Aggregate cane crushi
Slide 8: 5 Year Historical Financial Performance
5 Year Historical Financial Performance Segmental Revenues (Rs. Cr.) * Segmental PBIT (Rs. Cr.) Sugar Distillery Others Sugar Distillery Others 11 10 3 5 24 22 20 12 842 1164 566 1001 13 8 264 323 344 382 496 261 4,423 4,352 4,263 4,339 3,822 389 338 329 296 238 FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY
Slide 9: 5 Year Historical Financial Performance (contd.)
5 Year Historical Financial Performance (contd.) EBITDA (Rs. cr) EBITDA Margin (%) TCI (Rs. cr) TCI Margin (%) 565 689 682 714 700 511 502 469 13.2% 16.1% 512 14.4% 14.8% 14.4% 10.6% 10.6% 9.8% 269 11.0% 5.8% FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23 Sustainable profitability on the back of
Slide 10: Q4 performance in numbers
➢ PART ONE Q4 performance in numbers 9
Slide 11: This is what we achieved in Q4 FY23 (standalone numbers)
This is what we achieved in Q4 FY23 (standalone numbers) 252.35 404.17 12.33 Rs. cr. of total Rs. cr. of EBITDA Rs. earnings comprehensive per share income (TCI) Rs. 285.10 cr. in the Rs. 331.04 cr. in the Rs. 14.16 in the corresponding quarter, corresponding quarter, corresponding quarter, Q4 FY22
Slide 12: Financial performance (standalone numbers)
Financial performance (standalone numbers) Q4 FY23 Q4 FY22 Change FY23 FY22 Change FY21 FY20 FY19 (Rs. Cr) (Rs. Cr) (%) Particulars (Rs. Cr.) (Rs. Cr.) (%) (Rs. Cr.) (Rs. Cr) (Rs. Cr) 1491.52 1279.61 16.6% Revenue from Operations 4665.86 4846.03 -3.7% 4811.66 4741.29 4285.78 404.17 331.04 22.1% EBIT
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 14.4% 14.8% 14.4% 11.0% 25.9% 27.1% 16.1% 2000.00 1000.00 0.00 FY19 FY20 FY21 FY22 FY23 Q4FY22 Q4FY23 Revenue 4285.78 4741.29 4811.66 4846.03 4665.86 1279.61 1491.52 EBITDA 689.07 6
Slide 14: Q4 performance (standalone numbers) explained
Q4 performance (standalone numbers) explained Q4FY23 Q4FY22 Variance Key Reasons (Rs. Cr) (Rs. Cr) (%) Higher distillery volumes coupled with higher realizations in Revenue from operations 1491.53 1279.61 16.6% both sugar & distillery Mainly owing to sale of scrap and gain on sale of highly liquid O
Slide 15: Consolidated Financial Performance
Consolidated Financial Performance Revenue (Rs. Cr) TCI * (Rs. Cr) 570.7 512.5 479.2 461.0 4,741.3 4,811.7 4,846.0 4,665.9 4,285.8 277.9 256.0 236.6 1,279.6 1,491.5 FY19 FY20 FY21 FY22 FY23 Q4FY22 Q4FY23 FY19 FY20 FY21 FY22 FY23 Q4FY22 Q4FY23 EPS (Rs.) PBT (Rs. Cr) 25.21 23.44 22.48 22.44 601.78 568
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 75.77 1522.31 1173.41 % of Company’s Rs. cr. revenues cr. revenues in revenues, in Q4 FY 23 Q4 FY 22 Q4 FY23 29.73% increase 16
Slide 18: Policy intervention from Government
Policy intervention from Government ▪ FRP: Fair & Remunerative Price (FRP) of sugarcane for the sugar season 2022-23 was revised to ₹305 per quintal from ₹290 per quintal in the previous season (linked to a basic recovery of 10.25%). ▪ SAP: State Advised Price (SAP) of sugarcane for the sugar season
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 sugar business achieved
This is what sugar business achieved ➢ 1.12% decrease in sugar sales volume in Q4 FY23 (compared with Q4 FY22) ➢ 4.87% increase in blended sugar realizations in Q4 FY23 (compared with Q4 FY22) ➢ Bottomline: Lower domestic sugar volumes off-set by higher export sales coupled with higher realizations
Slide 21: Performance Overview – Sugar
Performance Overview – Sugar Q4 Q4 Financial data U.O.M. Change Change FY21 FY20 FY19 FY23 FY22 FY23 FY22 (%) (%) Segment (Rs. Cr) 1522.31 1173.41 29.73% 4338.57 4262.98 1.77% 4351.68 4423.26 3822.44 Revenues * Segment PBIT (Rs. Cr) 313.80 229.26 36.88% 238.49 296.30 - 329.47 389.04 338.41 PBIT % %
Slide 22: Business Overview: Sugar - Operational numbers
Business Overview: Sugar - Operational numbers Sugar Recovery (%) Sugarcane Crushed (lac quintals) (post B-heavy diversion) 1103.62 1020.30 1032.61 * 885.42 936.63 11.58 11.44 10.63 10.27 10.38 10.49 10.67 582.56 629.15 FY19 FY20 FY21 FY22 FY23 Q4 Q4 FY19 FY20 FY21 FY22 FY23 Q4 Q4 FY22 FY23 FY22 FY2
Slide 23: Movement in Sugar Costs & Valuation
Movement in Sugar Costs & Valuation (Rs./qtl. of sugar) Q4FY23 Q4FY22 Sugar inventory 3,440 3,371 3,499 3,422 as on 31st Mar. 2,969 3,116 2023 stood at 51.18 lac Cane Cost Cost of Production Sugar Inventory Cane Cost Cost of Production Sugar Inventory quintals Valuation Valuation Cane Crushed * (lac
Slide 24: Outlook of our sugar business
This is the whatoutlook our sugar of sugar business business achieved ➢ Expectation of better cane availability in next season for the Company ➢ Improvement in varietal balance which will lead to enhanced sugar recoveries ➢ With depleting inventory, domestic sugar realization to improve ➢ Export quo
Slide 25: Business Overview: Distillery
Business Business Overview overview: -Distillery Sugar Distillery revenues 477.78 Rs. cr. Q4FY 23 302.82 Rs. cr. Q4FY 22 57.78% higher 23.78 Distillery PBIT % of revenues, Q4, FY23 83.97 Rs. cr. Q4FY 23 104.87 Rs. cr. Q4FY 22 19.93% lower 24
Slide 26: Trend in Ethanol Supply fulfilling the domestic demand
Trend in Ethanol Supply fulfilling the domestic demand Ethanol Procurement by OMC’s (in crore litres) 12.0% Blending in Petrol achieved % 10.02% 5.0% 5.1% 8.0% 3.5% 4.2% 2.33% 1.53% 2.1% 173 290 434 600 38 111 67 151 189 67 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022
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 ➢ 50.2% higher sales volumes (compared to Q4FY22) owing to capacity expansion as well as production of Ethanol from sugar syrup ➢ 6.5% higher realizations (compared to Q4FY22) Alcohol Stock B-heavy Molasses Stock Ethanol Sale (B-heavy) 2.27 0.60 24.20 21.74 2.37 4.
Slide 29: Business Overview – Distillery
Business Overview – Distillery Q4 Q4 Financial data U.O.M. Change FY23 FY22 Change FY21 FY20 FY19 FY23 FY22 (%) (%) Segment Revenues * (Rs. Cr) 477.78 302.82 57.8% 1163.98 1001.41 16.2% 841.52 566.38 495.82 Segment PBIT (Rs. Cr) 83.97 104.87 -19.9% 261.30 382.36 -31.6% 344.09 264.19 322.87 PBIT % %
Slide 30: Business Overview – Distillery - Operational numbers
Business Overview – Distillery - Operational numbers Total Production * (Cr BL) Ethanol Production from B-heavy Ethanol Production from Syrup & 21.49 molasses route (Cr BL) Grain route (Cr BL) 17.06 16.31 13.30 11.21 7.08 12.76 10.18 5.78 10.66 9.49 5.24 3.58 4.26 2.60 - - - - - - FY19 FY20 FY21 FY2
Slide 31: Outlook of our distillery business
This is the whatoutlook our sugar of distillery business business achieved ➢ Encouraging long-term government policy on increasing the use of ethanol in India’s vehicular fuel mix ➢ Profitable foundation for sustainable growth ➢ Increased distillation capacity from 560 KLPD to 1050 KLPD. ➢ Projected
Slide 32: Business overview: Cogeneration
Business overview: Cogeneration Power sales (Cr units) Average Realization Production (Cr units) (Rs. per unit) 66.38 104.97 52.61 4.94 90.24 80.65 72.72 71.87 42.63 3.30 3.42 3.30 3.44 34.93 3.06 3.17 31.69 42.28 41.72 21.09 19.16 FY19 FY20 FY21 FY22 FY23 Q4 Q4 FY19 FY20 FY21 FY22 FY23 Q4 Q4 FY19 F
Slide 33: Treasury management
➢ PART THREE 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 Cane price payable Long Term Debt Short Term Debt [excluding current (Rs. Cr.) (including current maturities) maturities of long term debt] (Rs. Cr.) (Rs. Cr.) 1,395 606 1,264 617 1,059 524 891 960 496 446 376 363 228 * 257 216 FY19 FY20 FY21 FY22 FY
Slide 36: Cash Flow Analysis – (standalone)
Cash Flow Analysis – (standalone) Rs. Cr Sl. no. Particulars FY 18-19 FY 19-20 FY 20-21 FY 21-22 FY 22-23 1 Profit before tax 595.03 554.93 596.11 655.61 396.97 Cash generated from / (used) in operating 2 activities (523.01) 849.61 649.21 694.65 452.91 3 Net cash (used) in investing activities (159.
Slide 37: Treasury management update
Treasury management update • Long-term credit rating re-affirmed at AA+ (Stable) and the short-term rating at A1+ by CRISIL As of 31st March 2023, long term borrowings of the Company stands at Rs. 617.38 crores which carries low interest rate of ~4.1%-8.9%. Repayment obligation towards long-term bor
Slide 38: Share buyback
Share buyback 5 40.40 Number of successive Lakh maximum shares at maximum price, 360.00 share buybacks in five years 6th (size of the sixth share buyback) Rs. per share, maximum price of Buy-back approved by sixth share buyback the Board in its meeting held on 9th November 2022 & is currently under
Slide 39: Global & Indian Sugar Sector Overview
➢ PART FOUR Global & Indian Sugar Sector Overview 38
Slide 40: The company's sugar prospects are influenced by global and domestic sugar markets
The company’s sugar prospects are influenced by trends in the global and domestic sugar markets 39
Slide 41: The Global Sugar Scenario
TheSugar Global Global Scenario Production Outlook ( metric million tonnes) Total Global production at 173.5 MMT Total Global production estimated at 177.3 MMT In Brazil higher sugar mix along with reduction in gasoline prices by Petrobras has resulted in higher sugar production. Thailand have produ
Slide 42: 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 (22-23): • Energy taxes were reduced in 22 Brazil which brought the Ethanol parity down. 3 Climatic imp
Slide 43: India's sugar inventory is correcting downwards
India’s sugar inventory is correcting downwards 42
Slide 44: Domestic Sugar Balance Sheet
Domestic Sugar Balance Sheet ( metric million tonnes) Sugar Season 2021-22 Sugar Season 2022-23 (Estimated) 27.4 28.0 35.8 32.8 11.1 6.1 8.2 7.0 5.7 5.5 * SS 22 Opening Production Domestic Exports SS 22 Closing SS 23 Opening Production Domestic Exports SS 23 Closing Consumption Consumption * Opening
Slide 45: 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 44
Slide 46: 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 18% 5.80 7.20 6.10 32.48 33.16 31.20 32.80 Maharashtra 27.41 32% 3.80 0.46 Karnataka SS SS17-18 SS18-19 SS19-2
Slide 47: 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 48: 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 49: The strategic direction of our company
➢ PART FIVE The strategic direction of our company 48
Slide 50: Moving towards next orbit
Moving towards next orbit Creating value Expansion for all into Robust and stakeholders Strong integrated Ethanol Sustainable business model Financial performance ➢ Successfully completed five consecutive ➢ Emerging as a key growth Buy-Backs along with dividends leading to driver for the Company net
Slide 51: ESG and enhanced stakeholder value
➢ PART SIX ESG and enhanced stakeholder value 50
Slide 52: 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 53: 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 54: Our ESG Achievements
Our ESG Achievements Total effluents Improvement Steam consumption No. of trees planted (Ltrs/MT)) Improvement (per MT of cane) Improvement (units) 0.44 196.16 186.98 1,84,354 177.45 0.43 151.20 1,50,137 0.42 0.41 45,700 50,298 SS 20 SS 21 SS 22 SS 23 FY 20 FY 21 FY 22 FY 23 FY 20 FY 21 FY 22 FY 23
Slide 55: Socially Conscious Corporate Citizen
Socially Conscious Corporate Citizen 750+ Solar street lights CSR spend (Rs. Cr) installed 35+ ponds cleaned, 10.93 10.68 11.20 11.95 renovated and recharged 2.93 More than 12 lac individuals benefitted COMMUNITY FY19 FY20 FY21 FY22 FY23 DEVELOPMENT HEALTH EMPOWERMENT ENVIRONMENT EDUCATION AGRICULTU
Slide 56: 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 55
Slide 57: 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 president of the Indian Sugar Mills Association. ➢ Former committee member of FICCI & the Indian Chamber of Commerce in Kolkata. ➢ Under h
Slide 58: Shareholding Pattern
Shareholding Pattern Promoter Group Holding Foreign Holding Domestic Mutual Funds 42.42% 42.42% 42.42% 42.43% 42.90% 17.00% 16.22% 16.40% 15.84% 14.50% 14.14% 15.33% 15.28% 14.72% 14.44% Mar,22 June,22 Sept,22 Dec,22 Mar,23 Mar,22 June,22 Sept,22 Dec.,22 Mar,23 Mar,22 June,22 Sept,22 Dec,22 Mar,23 Q
Slide 59: Top 10 Non-Promoter Shareholding as on 31st March 2023
Top 10 Non-Promoter Shareholding as on 31st Marchch 2023 Shareholder % Shareholding NIPPON LIFE INDIA TRUSTEE LTD-A/C (Nippon India Small Cap Fund) 4.63% KOTAK SMALL CAP FUND 2.39% MAX LIFE INSURANCE CO. LTD A/C-PARTICIPATING FUND 2.31% ABU DHABI INVESTMENT AUTHORITY – MONSOON 1.82% GOLDMAN SACHS FU
Slide 60: Key factors to watch out
Key factors to watch out * State Advised Price (SAP) (for the State of U.P.) of sugarcane for the sugar season 2023-24 * Ethanol prices for ESY 2023-24 * Indian Export Policy going forward * Occurrence of El Nino 59
Slide 61: 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 62: Thank You
Thank You 61
Balrampur Chini Mills — Q4 FY2023 Earnings Presentation on 6ix