Balrampur Chini mills post healthy profit of Rs 161 crore

MUMBAI: Higher volumes and better realizations on sugar helped Balrampur Chini to post a healthy profit in FY13. The company posted a profit of Rs 161 crore in FY13 compared to Rs 1 crore in FY12.

Balrampur Chini's sugar realizations improved from Rs 28.2 per kg to Rs 32.4 per kg in the March 2013 quarter. This was mainly due to lower sugar production in the country this year. However, sugar production in UP, where the company operates, has increased by nearly 20% in this season. A higher production this year has resulted increased earnings from its distillery and co-generation division. Its Earnings before Interest and taxes (EBIT) from the distillery and co-generation division grew by 79% and 9% respectively in FY13.

Going forward, the removal of levy sugar and ethanol price revision is likely to improve company's margins. The company has been awarded to supply 2.5 crore litres at Rs 35 per litre by oil marketing companies. This is nearly 20% higher than the previous procurement price of Rs 27 per litre.

At current market price of Rs 48, the stock is trading at a price-to-book value of 0.9.