Balrampur Chini – Margins Sweetening

Despite 28% Q-o-Q decline in revenues to INR 3 bn (due to lower sugar sales volumes), there were operational positives in the Q2FY08 results. The sugar segment reported bumper profitability of 17.8% on better sugar realization and better spread of fixed costs on higher production base.

Co-products clocked yet another strong quarter with cogeneration reporting 61% Y-o-Y growth in revenues to INR 947 mn and 52% EBIT margins. Distillery revenues remained flat Y-o-Y at INR 498 mn. Strong performance across segments meant EBITDA margins tripled to 43%, while EBITDA grew 135% Y-o-Y to INR 1.3 bn. Despite higher fixed expenses in Q2FY08, (interest at INR 231 mn vis-a-vis INR 150 mn last year, depreciation at INR 306 mn vis-a-vis INR 194 mn a year ago), earnings grew 229% Y-o-Y to INR 657 mn.