Sharekhan's research report on Balrampur Chini Mills
The likely fall in India’s sugar production in the next season and lower global output resulted in a surge in sugar prices (domestic prices up by 8% y-o-y and 11% vs. April 2023 prices), which would help BCML to achieve higher realisation in the coming quarters. With the expansion in crushing capacity and debottlenecking, sugar crushing is expected to increase by ~10% in SS 2023-2024. Expanded ethanol capacity will lead to 31-32 crore litre production and 28-29 crore litre sales for FY2024. Focus on improving recovery through a change in sugar variety and a higher mix of ethanol will result in working capital savings going ahead.
Outlook
We reiterate our Buy rating on Balrampur Chini Mills Limited (BCML) with a revised PT of Rs. 495. The stock trades at 17x/14x its FY2024E/25E earnings. Rising sugar prices and increasing mix of ethanol provide good and consistent earnings visibility in the near term.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
