Shares of Shree Renuka Sugars surged six percent on March 31 after the company said it commenced commercial production of ethanol, which is blended with petrol, from the expanded capacity.
“Further to our announcement dated 13th February 2023 regarding commencement of commissioning activities of its expanded ethanol production capacity at Athani (from 300 KLPD to 450 KLPD) and at Munoli (from 120 KLPD to 500 KLPD) plants, we are pleased to inform that the company has commenced commercial production of ethanol from the expanded capacity,” the company said in an exchange filing.
Post commissioning, the company’s ethanol production capacity will increase from 720 KLPD to 1,250 KLPD.
At 12.57 pm, shares of the company were trading 4.1 percent higher at Rs 44.51 on the BSE.
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Atul Chaturvedi, Executive Chairman of Shree Renuka Sugars, recently told CNBC-TV18 that the full benefit of ethanol capacity expansion would come in FY24.
He said that the FY23 operating margin would much better and revenue growth of over 40 percent, while export would be higher by 30-35 percent.
Even if crude prices declined, there would be no impact on ethanol demand. As ethanol was still more cost-efficient than fuel in the country, the company expanded capacity to 1,250 KLPD from 520 KLPD, he said.
Chaturvedi said ethanol would the company ramp up revenue and pointed out that ethanol volumes were higher by 20-25 percent.
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