Fall in sugarcane prices led to loss in Q3: Oudh Sugar

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Fall in sugarcane prices led to loss in Q3: Oudh Sugar

In an interview with CNBC-TV18, US Beria, Head-Finance, Oudh Sugars, speaks about the results and his outlook for the company.

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Excerpts from Midcap Radar on CNBC-TV18 Watch the full show » RELATED NEWS Oudh Sugar Q3 net loss at Rs 30 cr ALSO READ See latest News about Oudh Sugar Mill See previous management interviews See what other Experts & Brokerages are saying about Oudh Sugar Mill Oudh Sugar Mill BSE | NSE 30/05/12 Are Mutual Funds betting on Oudh Sugar Mill?

Oudh Sugar has declared its third quarter results. The company's net loss was at Rs 30 crore versus profit of Rs 10 crore.

In an interview with CNBC-TV18, US Beria, Head-Finance, Oudh Sugars, speaks about the results and his outlook for the company.

The reason for loss, he says, is that the company had to pay higher sugarcane prices in anticipation of the rise in sugar prices.

"We paid up to Rs 280-Rs 290 per quintal for sugarcane because the prices at that time were moving around Rs 42-Rs 41 per kilogram. However, later on the prices of sugar came down to Rs 27, so that has resulted in loss," Beria says.

Here is a verbatim transcript of the exclusive interview with US Beria on CNBC-TV18. Also watch the accompanying video.

Q: Q3 was suppose to be amongst the better quarters that sugar companies have seen in recent times, but your company has ended up posting a loss in this quarter. Could you take us through the reasons why we have posted a loss?

A: The reason is that we had to pay higher sugarcane prices in anticipation of the rise in sugar prices. We paid up to Rs 280-Rs 290 per quintal for sugarcane because the prices at that time were moving around Rs 42-Rs 41 per kilogram. But later on the prices of sugar came down to Rs 27, so that has resulted in loss because the inventory has been valued as per the accounting standard, the cost price or market price which ever is lower. The market price was lower on 31st March, so we have to value the closing stock where the quantity is 16.5 lakh quintals at this price. So that has impacted the whole profitability.

Q: So what was the average cost of the inventory in Q3?

A: Average cost of inventory is around Rs 3,200 crore.

Q: And your average realisations during the quarter were?

A: Average realizations during the quarter were Rs 3,492 crore.