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Balrampur Chini Mills Eyes Strong Growth with Increased Crushing and Strategic Acquisitions in Sugar Sector

Balrampur Chini Mills Ltd expects robust growth with increased crushing and higher yield in the current sugar season. The company is exploring acquisition opportunities while maintaining organic growth. Avantika Saraogi, Promoter and Business Lead,

KOLKATA: Balrampur Chini Mills Ltd (BCML) anticipates sustained growth, driven by increased crushing and higher yield in the ongoing sugar season from October 2023 to September 2024, according to a senior company official. Alongside the organic growth it has achieved, BCML is actively exploring potential acquisition opportunities to further enhance its market presence.

Avantika Saraogi, Promoter and Business Lead (New Initiatives), expressed a commitment to continuous growth, stating, “We need to evaluate various opportunities to ensure sustained healthy growth given the favorable government policies. We expect our performance to improve in the years to come.” She refrained from disclosing specific targets.

BCML reported a topline of Rs 4,728 crore for the fiscal year 2022-23. The revenue for the first half of FY’24 (April-September 23) witnessed a significant YoY increase of 33 percent, reaching Rs 2,929 crore. Saraogi, who played a pivotal role in BCML’s success, conveyed confidence in the company’s future performance.

The sugar major, operating ten sugar factories in Uttar Pradesh with a combined sugarcane crushing capacity exceeding 80,000 TCD, remains open to acquisitions for inorganic growth while concurrently fostering organic growth in its existing mills. Saraogi highlighted early indications of the current crushing season, projecting a yield exceeding 10 percent, attributed to favorable weather conditions, technological interventions for farmers, and improved pest management. The company processed 10.3 crore quintals of sugarcane during the previous sugar season.

Optimism prevails in light of the preponement of the E20 (20 percent ethanol blend in petrol) target to 2025-26, a move anticipated to bring balance to the sugar market and ensure stable returns for the industry.

However, external factors, such as a sudden increase in the state-advised price (SAP) for sugarcane by the Uttar Pradesh government, could exert pressure on the industry, cautioned Vinod Kumar Yadav, CGM & Head Operations of Haidergarh Sugar Mill. Yadav urged the state government to consider the industry’s viability before contemplating any increase in the cane support price.

Trendlyne Forecaster estimates BCML’s revenue to range between Rs 5,516 crore and Rs 5,824 crore in FY24 and between Rs 6,100 crore and Rs 6,639 crore in FY25.

While sugar remains BCML’s primary focus, ethanol production is set to increase by 50 percent to 33 crore liters this year. Sugar contributes 66 percent to the company’s revenue, with ethanol accounting for the remaining nearly 33 percent.

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