Please refer to important disclosures at the end of this report
Balrampur Chini Mills Ltd (BCML) is one of the largest integrated sugar
manufacturing companies in India. Revenue/EBITDA/Net Profit rose
26%/124%/170% YoY respectively in FY17 on account of exceptionally high
sugar segment performance (EBIT at +9x YoY to Rs 535cr) led by sugar
realisation (+33% YoY), especially on low cost opening inventory (Rs 27/kg; avg
realisation of INR 35.9/kg- inventory gains of over Rs 500cr). Distillery and
cogeneration reported steady performance (Combined EBIT of Rs 330cr, +6%
YoY). The management is optimistic about business outlook on account of a)
tight inventory scenario domestically leading to firm sugar prices, b) expectation
of sanity in sugarcane pricing, c) rising mix of early variety driving crushing
volume (+7% YoY in FY17; expect to rise 10% YoY in FY18) & recovery rates
(10.66% for FY17 vs 9-10% earlier), and d) low cost inventory (0.66mnt valued
at INR 31.3/kg; currently selling at INR 37/kg). BCML has done large
prepayments in FY2017 on the back of healthy cash accruals, leading to
substantial reduction in long term loans, thereby further strengthening the capital
structure. The company has a RoE 39% and has bought back shares leading to
cash outflow of ~Rs. 175 crore in FY2017, the liquidity of the company is
expected to remain comfortable with unutilised working capital limits and
adequate drawing power going forward. Hence BUY.
CMP `162
52 Week High / Low
Avg. Daily Volume
Market Cap (` cr)
BSE Sensex
Face Value (`)
Reuters Code
Vaibhav Agrawal
022 3935 7800 Ext: 6808
[email protected]gelbroking.com
Balrampur Chini Mills Ltd
Others | Sugar
August 2, 2017
Balrampur Chini Mills | Sugar
June 5, 2017
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement Balrampur Chini Mills
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment period): Reduce (-5% to -15%) Sell (< -15)