Sharekhan's research report on Balrampur Chini Mills
Balrampur Chini Mills’ (BCML’s) Q2FY2025 numbers were affected by government restrictions in distillery operations and lower crushing volumes. Revenues fell by 16% y-o-y and EBIDTA fell by 70% y-o-y (EBIDTA margins decreased to 3.8%). Maintained its sugar production guidance for SY2024-25 at 32 million tonnes (net of diversion at 28.3 million tonnes). With sufficient inventory of 5.5 million tonnes at the end of SY, 2 million tonnes are available for exports. Construction of PLA plant will start soon after receipt of regulatory approvals. Likely to be operational by October 2026. UP government has supported with capex subsidy and interest subvention.
Outlook
Stock trades at 24x/19x/17x its FY25E/FY26E/FY27E earnings, respectively. We maintain a Buy with a revised PT of Rs. 673.
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