Ladies and gentlemen, good day and welcome to Balrampur Chini Mills Limited's earnings conference call. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Jenny Rose from CDR India. Thank you, and over to you. Thank you. Good afternoon, everyone, and thank you for joining us on Balrampur Chini Mills Q4 and FY 2026 results conference call. We have with us today Mr. Vivek Saraogi, Chairman and Managing Director of Balrampur Chini Mills, and Mr. Pramod Patwari, Chief Financial Officer of the company. We would now like to begin the call with brief opening remarks from the management, following which we will have the forum open for the question and answer session. Before we start, I would like to point out that some statements made in today's call may be forward-looking in nature and a disclaimer to this effect has been included in the results presentation shared with you earlier. I would now like to invite Mr. Saraogi to make his opening remarks. Over to you, sir. Good afternoon, everyone, thank you for joining us on Balrampur's Q4 and FY 2026 earnings call. I trust all of you have had the opportunity to go through our results presentation providing details of operational and financial performance. I will begin the call with an update on the developments in the sugar sector, followed by our company's key highlights for the period under review. During sugar season 25, 26, gross sugar production is projected to be around 31 million tons. After accounting for 3 million tons of diversion, net production is expected to be at around 28 million tons. Export was announced by the government in November based on the then prevailing estimates. As season progressed, certain key states, Maharashtra, UP, Karnataka, were all impacted by lower than anticipated yields and weather-related abnormalities, resulting in a moderation of the overall production, which resulted in the government prohibiting exports. Just to let you know, INR 7 lakhs has gone out. Pramod, around INR 7 lakhs? INR 7 lakhs. Yeah. This is not a cause of worry at all. I'll explain. Nevertheless, the inventory remains broadly balanced with an opening inventory of around 5 million tons, domestic consumption expected to max consumption that is at 28 million tons. Likely export of INR 7 lakh tons or 0.7 million would reduce the stock from INR 50 lakhs or 5 million to INR 43 lakhs or 4.3 million. Just to point out, probably this is the lowest stock levels which I remember seeing in my recent living memory. It is one of the lowest. On the pricing front, domestic prices have remained supportive, aided by a balanced supply position and limited or inventory overhang. In UP, prices have broadly remained in the range of INR 41 lakh-INR 42 lakh. We believe pricing would remain steady and gradually probably inch up, based on the data points given to you on the closing inventory. Also to let everyone know that there is no alarm at this stock level. It is possible to manage it. However, the demand supply remains in favor of pricing. Coming to ethanol, the blending program continues to remain a key priority. For mills, the problem is absence of revision of ethanol prices under the juice and B-heavy molasses route for the last three years, despite higher cane costs and operational expenses. Against this backdrop, Balrampur concluded FY 2026 on a stable note, with sugar segment delivering resilient performance despite increase of INR 30 lakh in sugar cane price of INR 370 lakh-INR 400 lakh per quintal. Higher cane costs were partly offset through improved operational efficiency, higher quantity of crushing, higher sugar sales volume and stable realization. The company crushed INR 1,043 lakh quintals of cane, which is up 5.2%, while the gross recovery remained broadly around the same range, marginally lower at 11.24% vis-a-vis 11.28%. Just to let everyone know, UP crushed 7% lower cane than last year, and we have crushed 5.2% higher cane. The distillery business also reported stable performance supported by higher volumes, although margins remained under pressure due to absence of ethanol prices, as pointed earlier. As discussed in our recent call, we had an investor call on the PLA project post our fund raise, which was going to revise CapEx at INR 3,080 crores. Our idea is to further strengthen the integrated value chain. Board has also approved a lacto-gypsum processing plant at Kumbhi to manufacture gypsum board using eco-friendly byproduct gypsum from PLA process. Recently, as informed to you earlier, board has approved raising of INR 450 crores through preferential issue of preferential shares to fund the CapEx as well as general corporate purposes. There is no dilution, promoters have participated to the extent of INR 193 crores, which is proportionate to their current holding. Over the years, Balrampur's integrated model has enabled company to successfully navigate cycles, evolving policy dynamics. Going forward, the company remains committed to maximizing value extraction, enhancing operational efficiencies, investing prudently and driving long-term value for all the stakeholders. Thank you so much. Now to you. Thank you, and good afternoon, everyone. I would not like to go to the repetition of facts and figures what we have stated in the presentation, and therefore request for the Q&A session to begin. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star then one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Vishal Prasad from VP Capital. Please go ahead. Hi, good afternoon. I have three questions. In the case of gutkha, it is extremely important to get the packaging barrier right. In one of the calls, Avantika did mention that we have got the barrier packaging right for gutkha application. Other problem with gutkha is that the packet remains in the supply chain for more than one year. Given the requirement of long duration, what shelf life has been validated in the degradation testing? Okay. Yeah, that's it? Yeah. Other two are unrelated. Do you want me to go through other two questions as well? I mean, best. Yeah. Okay. The second one is, we have talked about two-way approach, where we work with the customers directly, and the second is government mandate. Could you give a rough idea on the kind of mandate we are expecting and the expected timeline when we expect the government to come back and have a detailed mandate? The last one is, I mean, the CapEx that we have done, we announced it probably. I'm sorry to interrupt you. I you. I would request you to please hold up. We have management line has disconnected. Just give me a moment while we reconnect. Yeah. Ladies and gentlemen, thank you for patiently holding. We have management reconnected. Mr. Vishal Prasad, you may please continue with your question. Yeah. Yeah. Sir, I'll repeat the second question and then go to the third question. We have talked about a two-way approach where we work with the customers directly. Yes. And this second one is- Yeah, the mandate. Yeah, yeah. Yes. Yes. I was just looking at what kind Yeah. Yeah. On the mandate, you're well aware of the central government mandate. There's some problem with the phone. Hello? Mr. Vishal Prasad, I have muted your line. There is a disturbance from your line, sir. Okay. The other part is the mandate. You know, there's a mandate also being worked upon by the U.P. government. They already formed a committee, et cetera, to take forward a, you know, so as to say, non-plastic mandate ahead there also. We are working, just to summarize, three fronts: central government mandate, U.P. government mandate, and customers. It's a three-pronged approach, and touch wood, so far so good. Okay. Okay. As the third question is, in the first iteration of the CapEx, it probably took two years and nine months to complete the project. We are going to complete it in the month of October. If we need to expand again, the timeline will remain the same, or probably we can expect the next expansion whenever we decide to be done in within 12 months- 18 months? Yes. Your last assumption is correct. 15 odd months is very possible. 15 months is very possible, and we look to commission in the third quarter of this year. Okay. sir, coming back to the first question, if you could respond on the gutkha. Yeah, I told you that we've worked out the barrier properties error free and the duration, food safety contact, everything is through. Okay. Thank you, sir. Thank you. The next question is from the line of Shailesh Kanani from Asian Market Securities. Please go ahead. Good afternoon, everyone, and thanks for the opportunity. Sir, few questions from my side. First continuing with the PLA question, could you provide some color on the current global versus domestic PLA realizations and price trends? Also if you can kind of highlight, because the environment is little bit conducive, are we in any advanced talks in terms of or any announcement in terms of volume of take ones because the commercial production is kind of nearby. Anything on that front, if you can share? No. I didn't get your question. What I've understood is owing to the current crude price, you know, rise, the PLA prices have moved north. Yes. That is good for us. Yeah. In that backdrop, have we kind of any inquiry pipeline or any offtake agreements, anything as? It's only six odd months for facilities to. Just to able to answer your question, and this goes out to all our investors, the fossil-based plastic has gone up drastically, which is very helpful. Secondly, the mandates, the agreements, the customers, et cetera, are all progressing well. It is not proper to announce each and every, you know, agreement, et cetera. It is all going very well, and I think the first question was very detailed, and it gave a lot of insight into our. My answer, I hope, gives a lot of insight. Okay. You know, each agreement, each customer, each dialogue, each mandate is being worked upon thoroughly with all testing. Being the first of its kind in the country, the progress made by us till now deeply satisfies me of the potential ahead. Giving more details is not proper right now. Understood, sir. Everything is nearing finalization. Let it get finalized. We are very near to everything. Fair enough, sir. That's helpful. Sir, my second question was with respect to the imports, what we are doing on the back of this. Any kind of technical or market-facing learnings if you would like to share? I was just observing the revenue numbers. Those seems to be remarkably small, right? Is there any underlying factor we should read into it? Imports are happening. Whatever little learning is needed for our end product tweaking, we are doing. The imports and the seeding of the market is going on. We are happy and satisfied on all fronts. At this point, however, if you're saying the current sale of PLA in this environment and the numbers, et cetera, you know, this is a tough one to answer. Pramod wants to say something. Shailesh, just to add on this, earlier we thought that we would be replacing the entire requirement of the existing customers. What we learned is that they are okay with their, our quality, and they are waiting for the production to hit the market. Yeah. Only they will replace the existing ones. They're not ready to replace their current supplier base with us as of now. Because they're saying you need to come in with production, commit to me your volume, when you'll give, how much. Guys, this has to be left to the management, right? We are working on it. Lot of success. Just to let you know, the existing machines of the converters, everybody is all in sync. They need to make no changes for our product. Fair enough. Thanks a lot. Just moving on to the sugar division. Sir, we have been working on various seed varieties to kind of replace the 0238 variety. Any pipeline or any timeline where we can again have that kind of recovery, which can match, you know, 0238 recovery levels? 0238, to replicate that variety in recovery and yield looks tough. However, the varieties we are working on has shown a lot of promise. The fruits will be felt as we go ahead, but 0238 I mean, that barometer as of now looks tough. Having said that, this looks like the bottom. Fair enough. Sir, can I squeeze in one more question? Yes, why not? All yours. Thanks a lot. Just this is a repeat, right? There has been no more than three years, no revision on the internal prices. A feedback or input from your side to the government, and the government has kind of reciprocated positively on the revision of ethanol prices because we would have pressure on our margins group henceforth, at least in the first half, right? Given the increase in the SAP what we have seen in the last year, so steep hike. Any kind of positive conversation you can share some light on that. Definitely positive conversation has begun, especially crude at INR 111, currency at INR 96. We know the cost. Definitely both on the quantum and on the price, I think there will be serious now. We have feedback to that effect. You know, once bitten, twice shy. I mean, if you ask me today, I think it'll get done. Any color in the terms of per liter increase in terms of our expectations about things? Wait, wait. Let things happen. Too many years have gone by. Fingers crossed. All I can tell you that this environment, which is nasty for everyone, is not so nasty for us. If you see the heat, it will help consumption. If you, which is the El Niño. If you see our area, we have enough water. You Maharashtra, Karnataka, I don't know, which is again positive of not having too much of a surplus, therefore sugar price positive. PLA, we've told you, fossil-based plastic going up is very good for us. A government will get duty bound even commercially, if not morally, to increase the price they have not done over three years. Pure and simple numbers. I feel that, you know, this We are in absolutely good area. Absolutely. Agree, sir. Thanks a ton and best of luck, sir. Thank you. The next question is from the line of Hrishikesh Bhagat from Kotak Mutual Fund. Please go ahead. Hi. Good afternoon, sir. Thank you for the opportunity. I understand that company is well-placed from the point of your water availability. Any perspective you can give on potential cropping impact because of the fertilizer availability? That's a good question. We continue to track it. The yield, however, will not be known even if there is a naked eye yield to be seen, nothing before September, October. The crop is just germinating and beginning to, you know, take shape. If you want an honest answer to this question, don't ask anybody before September. Sure. Thank you. Yes, if there is a negative tenor to the crop yield, probably some rainfall, quantum, et cetera, best assessed in August, mid-August. Sure. Thank you. Thank you. The next question is from the line of Dhanit from Sawla Family Office. Please go ahead. Hello, sir. My question is with regards to the ethanol price, which has not been revised. I see that, I mean, is there can we draw any relation between the We have increased our ethanol production from B-heavy route this year, okay. The price has not been revised, and we have reduced it for the C-heavy route, where the price has been revised. Any particular reason why we have done that? I mean, I think for the C-heavy route, the price had been revised, right? Why are we choosing to increase it to the B-heavy route even if the price has not been revised? Pramod. We have to do our optimization. We were hoping that it would get revised. It didn't get revised. There was enough indication to say it would be. However, we have not lowered our C heavy, Pramod. Hardly anything. The thing is that you need to When the requirement is to get more and more ethanol to utilize the ethanol capacity, it can come only through juice and B heavy. These will not give you enough quantity. As said, we were hoping that ethanol prices will. Yeah, we have to fill our tenders in November. Yes. We participated in November. This year we'll be a lot more cautious, and we'll take our internal call accordingly. Sir, just a small follow-up. Do you think that the decision can be frozen considering that elections might be announced at by end of up to the end of after November or something, if they are not if they are not processed? It might even take this cause of further more delay in the announcement, right? Because they cannot announce these things during the elections. No, no. This all is unrelated stuff. UP elections should be in January, February, you know. Ethanol pricing, UP election, I don't see any connect. Okay, okay. So one more question I had. We have this item on the presentation, this Auxilo financing. I was not able to find much information on it on the earnings which have been shared. Can you please tell us that, is it how where can I actually find the actual impact of this? I don't know. In case you have any specific questions, we can talk offline. We have uploaded the financials of Auxilio on presentation. As well as the results will also get uploaded on the website. Okay. Thank you very much, sir. Right. Thank you. The next question is from the line of Manpreet Arora from Arora Wealth Advisors. Please go ahead. Thank you. Sir, both my questions are on the PLA side. My first question is about, you know, do we have different grades in PLA, like different grade for packaging and different grade for 3D printing with different margin profiles and are targeting, you know, the different grades? Just wanted to understand. Yes, there are different grades. Different, you know. It will depend upon the area of application. I'm sorry, sir. Can you please say that again? Yeah. We will have different grades depending upon the area of application. Okay. Are we targeting the different grades with the, you know, maybe with higher margin profiles, or we're going to start with packaging only? Of course. As I said, we are doing everything. Our plant is built well to handle different grades. Okay Different applications, et cetera. Okay. Yes, while the question is absolutely in order, as I said, we have a big team which is dealing with the, you know, Sulzer, which is the, what should I say, the technology supplier. Enough grades have been imported, enough learnings have been developed to be able to understand which grade will fit in where. All right. Perfect. Thank you. The other question, sir, was a little more, you know, on the margin side. Now, you know, if you look at TotalEnergies Corbion journey in this space, you know, they started with 35% margins and now they're, you know, down to 12% odd, now they've, you know, put their asset up for sale as well on their PLA asset. Similarly look at the Chinese, the Zhejiang. They are also making around 15% EBITDA margins on this business. I'm sure management would have studied these case studies. How do we see our ability to make 35% margins. Good question. Pramod answer. I think to answer the second part first, that we have a unique advantage. Exactly Availability of sugar as well as the bagasse. Right Which will be the key ingredient for fuel at the doorstep, which will save us a lot of logistics costs. This is one part. To the best of our understanding, Total Corbion is not capturing the entire value addition in the manufacture of PLA. Up to lactic acid, they are taking it in a different company, and from lactic acid to PLA, it is going in another company. So- I'll also just- Yes, sir. Please go on. I'll also just add, again, our sugar transportation will not cost a penny. Our bagasse transport will not cost a penny. We bagasse-based power versus energy-based power, which others are paying, is massively different. It's going to get so much more different, which makes me far more bullish on our margins. Pramod has also put in an answer which is very valid. Yeah. Sir, to summarize, you know, we'll have our own feedstock. Yes you know. Everything Logistics- Yes, yes Energy will favor. Big, big time. Yeah. Even though, you know, we are not the lowest cost producer, India is not the lowest cost producer of sugar, as we had mentioned in one of our previous calls, but will it be fair to say that on PLA we'll be one of the lowest cost producers in the world. We come to scale. Let us begin. Where our disadvantage is only in sugar price, the rest will be hugely positive. I'm sure with scale, our chemical cost, et cetera, for which also we are doing lots of laboratory work, will enable us to become the lowest cost producer very soon. I mean, with expansion, definitely. Even without expansion, very clearly we are very big. If you think crude remains here, I assure you we'll be lowest cost. Great. Great. Just one last on the margin side. You had earlier mentioned that 35% margins is our target. Does this include the incentives, all the incentives starting from, you know, the INR 1,100 crore CapEx plus the electricity and the STSD? All these are factored in in this calculation or that will be over and beyond it? Maybe you've answered this in a previous call, but it was not very clear to me. If you can talk about that. Okay. Yeah. We had earlier stated that we are aspiring to make 35% of EBITDA margin. The incentives are largely in the form of capital subsidy and interest subvention. Both these items are below EBITDA. One will get captured either in the form of lower depreciation and the other net of interest. EBITDA margin will not get impacted because of this. We haven't considered the benefit of incentive while guiding 35% EBITDA margin. All right. Perfect. Just before I, you know, move back to the queue, sir, you mentioned that will resin be our end product or will we be involved in compounding the product? Do our customers need to, I think you mentioned that our product will work with their machinery as is? Yes, yes. Correct, correct. Yes Even if it is injection molding or thermal molding. Yes, yes, yes. That has been a big victory, including the barrier property, establishing all technical everything. Perfect. Perfect. Thank you very much. Thank you. Thank you. Thank you. The next question is from the line of Tanmay Zaveri from Finpress Capital. Please go ahead. Yes. Hi, sir, I have two questions on the ethanol side. The government is now talking beyond E20 through flex fuel vehicles and higher blending like E85 and E100. The ecosystem still appears to be at very early stage from infrastructure and vehicle readiness perspective. Basis our discussions with the OMCs and automotive OEMs, how do you see the roadmap evolving over the next two years? Is the groundwork really happening in that phase, or will it take considerable time before translating into meaningful demand? I think the vehicles technically can go up to E25, and government will gradually improve the mandate. I just made a quick remark in the beginning. Government is looking at both increasing the E20 level as well as correcting the error on the pricing. For E85 and E100, automobile companies are ready with the prototype. Government has also come out with a draft notification for public comments. In the times to come, you will see announcement on this. Right. My second question was more on the industry side. We have seen that, in the past years there have been lots of oversupply of ethanol, but at the same time, lots of players have started adding more ethanol capacities lately. How are we thinking about the supply demand side for this year and maybe next year? What kind of volumes are we looking for this financial year? For Balrampur, in the year gone by, that is FY 2026, we produced around INR 27 crores liter of ethanol. Our existing nameplate capacity With that capacity we can reach around INR 34 crores-INR 35 crores liter of capacity. The only thing is price is going to be a deciding factor, whether we will favor more sugarcane towards juice route ethanol or the conventional C route. That is one part. At the industry level, definitely there is an overcapacity. To address that, government is coming out how to increase the demand by way of going beyond E20, E85, E100. Okay. Yeah. That's it from my side. Thank you. Thank you. Before we take the next participant, reminder to everyone, to ask a question, please press star and one. The next question is from the line of Vishal Prasad from VP Capital. Please go ahead. Yeah. Thank you. Sir, in the case of PLA, it itself might not be conducive and converters will add other materials if to the form of laminate structure or some coating on PLA. From the perspective of biodegradability, the other materials would be biodegradable or we are going to add something which may be a derivative of crude? Again, good question. Very detailed. See, if you're going to go into a mandate, let's say the pan masala gutkha, that mandate. Government will probably give you all, you know, biodegradable stuff, and we've tried all that also. Like ink also. Like the printing ink, the glue, everything has been tried. In, let's say customers and/or other mandates, probably the mandate will decide if certain percentage of a PBAT or something else which is biodegradable can be mixed. For primary customers, it's what they want. Let's say for Cutily, for, you know, whatever, it's what each person wants. But yes, if you have to qualify for something, you have to make that. Okay. Am I clear? Yes, and I'm not very sure, so I don't have the answer that I'm going to ask you. Let's say assuming a hypothetical scenario where 50% is PLA and 50% is crude derivative, and then it goes to landfill. Will the nature be able to separate out the crude derivative and PLA, and PLA will biodegrade and crude derivative will remain? I will not lie. I will not be able to answer that. Yes, if it is PLA, landfill will kill it within very short time. At Indian temperatures, it will go in one season. Okay. To mix anything. If it's PLA, then it is fine. The government will stop. Sorry? Government will come out with a mandate. Exactly. We have to follow the mandate. Okay. Okay. Okay. Mandate will be very detailed. Okay. Do we expect them to come back within this year or, I mean, when we start, or it will probably be sometime into 2027? We are hoping that it will be sooner than later. No, I'm not looking at six months from now. Okay. Okay. sir, second question is, let's say there's another company in India who wants to do this PLA thing, they are not a. Then they don't use sugarcane. They will really find it difficult to get the margins that we are expecting because of the advantages that you have mentioned? I think you more than answered your question. Yes, yes. Okay. It has to be If your peer from the same industry, if they decide maybe they'll be able to do it. Yes. They'll have that same sugar available and same bagasse available. Yes, ours is a group, so we have more advantages than anyone. We are located close to each other in two plants. Yes, definitely. If a sugar factory owner with a large size wants to do it, he would have the same basic advantages except whatever the two years of research which has gone into our business. Right. Thank you so much, sir. Thank you. Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to management for closing comments. Thank you, everyone. Today was a very detailed interaction on PLA, which made me happy. Rest assured we are doing our very best, and all points mentioned by, and concerns mentioned by our dear investors have our attention and a lot more. Other issues are being addressed. This is the first time such a plant is being set up. It comes with excitement as well as its challenges. We are ready for both. Thank you, everyone. Thank you. Thank you. On behalf of Balrampur Chini Mills, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.