Bajaj Hindusthan Sugar Limited · NSE:BAJAJHIND
Bajaj Hindusthan Sugar — Investor Presentation (September 2009)
19 slides from Bajaj Hindusthan Sugar's investor presentation, September 2009
Slide 1: Indian Agriculture: Self Sufficiency – A myth or reality?
Indian Agriculture Self Sufficiency – A myth or reality?
Slide 2: Disclaimer
Disclaimer This presentation contains certain “forward looking statements.” These forward looking statements that include words or phrases such as Bajaj Hindusthan Limited (the "Company") or its management “believes”, “expects”, “anticipates”, “intends”, “plans”, “foresees”, or other words or phrase
Slide 3: India - Brief demographic profile
India- Brief demographic profile CAGR CAGR since since 1950 1960 1970 1980 1990 2000 2009 1950 2000 At current prices Gross Domestic Product Rs Crore 9719 15083 40405 110887 442134 1786526 4933183 11.14% 11.95% Agriculture Rs Crore 4801 6404 16747 34384 117796 409660 861753 9.20% 8.61% Manufacturing
Slide 4: India World ranking in production and consumption
India World ranking in production and consumption Production Consumption Ranking Ranking Rice 2 After China 2 After China Wheat 3 After EU, China 3 After EU, China Sorghum (Jowar) 3 After Nigeria,USA 3 After Nigeria,Mexico Millet (Bajra) 1 1 Sugar 2 After Brazil 1 Cotton 2 After China 2 After China
Slide 5: Growth rate of yields
Growth rate of yields Yield Kg per Hectare CAGR since 1950-51 2002-03 2007-2008 1951 Rice 668 1744 2203 2.12% Wheat 663 2610 2785 2.55% Sorghum (Jowar) 353 754 981 1.81% Millet (Bajra) 288 610 1030 2.26% Sugar Cane 33422 63576 67531 1.24% Cotton 88 191 466 2.97% Source: Ministry of Agriculture- Dire
Slide 6: Minimum Support Price (MSP) growth
Minimum Support Price (MSP) growth Rs per Qtl 17 year 3 year 1992-93 2002 2006 2007 2008 2009 2010 CAGR CAGR Rice 270 530 570 580 645 850 950 7.68% 17.88% Wheat 330 620 650 750 1000 1080 NA 7.69% 18.44% Sorghum (Jowar) 240 485 525 540 600 840 840 7.65% 15.87% Millet (Bajra) 240 485 525 540 600 840 8
Slide 7: Performance of companies having rural presence
Performance of companies having rural presence Company Category Unit 2004 2005 2006 2007 2008 2009 CAGR Hero Honda Two Wheeler Lakh Unit 20.70 26.21 30.01 33.37 33.37 37.22 12.45% Maruti Suzuki Cars Lakh Unit 4.21 4.87 5.27 6.35 7.11 7.22 11.39% Customers in Bharti Mobiles crores 0.71 1.18 2.1 3.9 6
Slide 8: Why are yields not improving?
Why are yields not improving? Loan waivers for farmers ¾Loan waiver schemes by the Central and State Governments NREG scheme ¾ The recently launched NREG Scheme provides guaranteed employment for 100 days and a minimum wage of Rs. 100 per day MSP which covers 70% population ¾ Government ensures
Slide 9: Why is supply not catching up?
Why is supply not catching up? Land for agriculture declining ¾ Limited cultivable land which is further lessened by more lucrative alternate usage like SEZs etc. Continuance of agriculture a major problem ¾ The new generation is far better educated and is richer. Agriculture does not interest t
Slide 10: Domestic demand & supply - foodgrains
Domestic demand & supply - foodgrains Million Tonnes 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Opening Stock 16 12 16 18 23 31 1 1 Production 185 195 203 216 219 184 219 220 222 224 225 Imports 0 7 2 1 0 0 - - - - - Availability 201 213 221 235 241 214 219 222 222 224 225 Consumption 18
Slide 11: Domestic demand, supply & stocks since 1960 - foodgrains
Domestic demand,supply & stocks since 1960 - foodgrains 250 35% 230 Green 30% 210 Revolution 25% 190 20% 170 15% 150 ^ 10% 130 110 5% P ro duc t io n 90 C o ns um pt io n 0% 70 S t o c k t o us e -5% 50 -10% Source: USDA upto 2007, company estimate thereafter Foodgrains include wheat, rice,barley,co
Slide 12: Domestic demand, supply & stocks since 1960 – Milled Rice
Domestic demand,supply & stocks since 1960 – Milled Rice Rice, Milled 2005 2006 2007 2008 2009 2010E Million Tonnes Opening Stock 11 9 11 11 14 18 Production 83 92 93 97 99 78 Imports - 0 - 1 - - Availability 94 100 104 109 113 96 Consumption 81 85 87 90 94 97 Exports 5 5 6 5 2 Closing Stock 9 11 11
Slide 13: Domestic demand, supply & stocks since 1960 – Wheat
Domestic demand,supply & stocks since 1960 – Wheat Wheat 2005 2006 2007 2008 2009 E 2010 E Million Tonnes Opening Stock 4 2 5 6 8 11 Production 69 69 76 79 81 64 Imports 0 7 2 0 - Availability 73 78 82 84 88 76 Consumption 70 73 76 76 77 77 Exports 1 0 0 0 0 ^ Closing Stock 2 5 6 8 11 (1) 100 45% P
Slide 14: Low cane supply caused by massive crop switching
Low cane supply caused by massive crop switching… (million tonnes) SY 02 SY 03 SY 04 SY 05 SY 06 SY 07 SY 08 SY 09 SY 10E SY 11E Opening Stock (A) 10.7 11.3 11.6 8.5 4.0 * 3.6 9.2 8.1 2.3 0.0 Production (B) 18.5 20.1 14.0 12.7 19.3 28.3 26.3 14.7 14.0 21.0 Total Availability (A+B) 29.2 31.5 25.6 21.
Slide 15: Volatility in Sugar Cycle increasing
Volatility in Sugar Cycle increasing… 10.00 8.00 6.00 Absolute Difference in Sugar Production Year on Year Million Tones 4.00 2.00 Difference in production - 62 64 66 68 70 72 76 78 82 84 88 90 94 96 00 02 06 08 74 80 86 92 98 04 10 19 19 20 20 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 20 2
Slide 16: Sugar crisis and recovery will take much longer
… leading to sugar crisis and recovery will take much longer as demand grows even more Typical Sugar Cycle (5-7 Years) Lower Higher & Lower Increase in Increase in Higher Decline in Delayed sugar prompt Lower sugarcane sugar area under sugar sugar payments production payment to profitability product
Slide 17: Wheat & rice or sugarcane ??
Wheat & rice or sugarcane ?? ECONOMICS OF SUGARCANE VERSUS RICE-WHEAT Year 2009 MSP Revenue/ Yield/Acre Cost of culva- Rates/Qtl. Acre Profit/Acre Av.Profit / Crop (Qtls.) tion/Acre (Rs) (Rs.) (Rs.) (Rs.) Annum/Acre Sugarcane (Plant) 225 20405 140 31500 11095 Sugarcane (Ratoon) 200 13190 140 28000 1
Slide 18: India sorely needs The 2nd Green Revolution
Future ??? India sorely needs The 2nd Green Revolution
Slide 19: Thank You
Thank You
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