Buy Balrampur Chini; target of Rs 600: ICICI Direct

ICICI Direct's research report on Balrampur Chini

Balrampur Chini (BCML) is the second largest sugar company with sugar crushing capacity of 76000 TCD, distillery capacity of 560 KLD & co-generation capacity of 172 MW. It is undertaking a distillery capex of 490 KLD & modernisation, de-bottlenecking of its sugarcane crushing capacity at multiple plants. The company would be able to increase distillery volumes to 35 crore litre in FY24 from 16 crore litre in FY21. Moreover, the modernisation plan would result in higher sugarcane crushing, better recoveries

Outlook

We continue to maintain our BUY rating on the stock We value the stock at Rs 600, valuing the business at 18x FY23 PE