Buy Balrampur Chini Mills; target of Rs 425: Sharekhan

Sharekhan's research report on Balrampur Chini Mills

Balrampur Chini Mills Limited’s (BCML’s) Q3FY2023 performance was affected by a delayed start of the sugar season on adverse weather and delay in new projects based on late supply of machinery. Revenue and operating profit decreased by 19% and 20% y-o-y. A delayed sugar season will spill over in the quarters ahead. Cane crushed in FY2023 with be ~9.25 lakh quintals and cane crushing will be higher by ~10% in FY2024. With production capacity being enhanced to 1,050 KLPD, BCML expects to produce 21 crore litres and 35 crore litres of ethanol in FY2023 & FY2024. A better mix will help improve overall EBIDTA margins.

Outlook

The stock is currently trading at 13.7x/12.1x its FY024E/FY2025E earnings. We maintain a Buy with an unchanged PT of Rs. 425.

For all recommendations report, click here