Ladies and gentlemen, good day and welcome to the Balrampur Chini Mills Limited earnings conference call. As a reminder, all participant lines will remain in the listen-only mode, and there will be an opportunity for you to ask questions after the management's opening remarks. Should you need assistance during the conference call, please signal the operator by pressing star then zero on your touch-tone telephone. Please note that this conference is being recorded. I will now hand the conference over to Ms. Jenny Rose from CDR India. Thank you, and over to you. Good afternoon, everyone, and thank you for joining us on Balrampur Chini's Q1 FY 2027 results conference call. We have with us today Mr. Vivek Saraogi, Chairman and Managing Director of Balrampur Chini Mills, Ms. Avantika Saraogi, Executive Director, 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. Thank you, Jenny, and good afternoon, everyone. Thank you for joining us on our Q1 2027 earnings con call. I trust all of you have had the opportunity to go through our results, providing details of our operational and financial performance. So I will just go through the highlights. The season 2025 to 2026 has turned out to be tighter than anticipated, with lower than expected production, healthy domestic consumption, and diversion towards ethanol resulting in a drawdown to inventory. This tighter demand-supply balance has led to firming up of domestic prices, providing relief to millers and help offsetting higher cane costs and other costs and margin pressures in terms of distillery, especially. Looking ahead to the 2026 to 2027 season, it's too early to take a definitive view on production, progress on monsoon crop developments, and yields across the producing states. We will get clarity over the next few months. First clarity one can get sometime September end. In this environment, maintaining the right balance between sugar availability, ethanol diversion will be important for stable prices and healthy industry economics. Turning to our performance, Balrampur has commenced FY 2027 on a stable note with their revenues improving across sugar and distillery segments, supported by higher sugar realizations and distillery volumes. Sugar cane crushing and production increased on improved cane availability, while cane development and varietal balancing remains our key focus area. Higher sugar realizations also provided support against increased cane costs during the quarter. As most of you are aware, the first quarter is an off-season. Profitability during the quarter is therefore influenced by carrying cost and realization of sugar inventory from previous season with absence of production, largely. There may be some production in April. Pramod will give the figures. This impacts the quarterly performance, and this is going to be relevant every quarter. As we know, sugar has a quarter-wise dynamics to it. First quarter being this, second quarter is absolutely without production. Third-quarter production is there partial, fourth quarter is entire. As on June 30th, company was carrying 45.67 lakh tons at an average carrying cost of INR 37.19. With sugar prices remaining firm, this inventory provides a favorable base of profitability in upcoming quarters. Our strategic initiative, the 80,000 PLA plant continues to progress well and remains on track. We will talk about the commissioning date. Construction activities are in full flow with civil equipment, arrivals, erections, all going on. We have spent about INR 218.0 crore till end of July. Right, Pramod? Alongside project execution, we have made encouraging progress on product development, customer trials, and market engagement. To conclude, our integrated business model has helped us navigate changing industry dynamics while continuing to focus on maximizing value from every stick of cane. As we have strengthened our core operations and progress with the PLA project, we are building a more diversified, sustainable growth platform aligned with environmental priorities. Backed by our strong financial position and focus on efficient capital deployment, we continue to strengthen our operation, enhance efficiencies, and create sustainable long-term value. Right now, I hand over the floor to Pramod. Thank you, and good afternoon, everyone. I hope all of you have had the opportunity to go through the results presentation that has been shared with you. I now request the moderator to open the forum for Q&A session. Thank you. Thank you. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use their handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We take the first question from the line of Sanjay Manyal from DAM Capital Advisors. Please go ahead. Hi, sir. Just a few questions on the current situation where the sugar prices have moved up to INR 48- INR 49. Given the fact that government might come with some measures, and if suppose if it is a restriction on B-heavy and juice the way they did two years back, what kind of a quantity of distillery volumes still you can do next season? Is it fair to assume that 10 crore is possible from C-heavy and maybe another nine to 10 crore is possible from grains, maize, or broken rice? That is my first question. Taking a cue, hi, Sanjay. I will try and attempt to answer the entire dynamics which is prevailing. Yes, the inventory is tight. Market has assumed the inventory to be tighter and the numbers to be way lower than reality. That is our view, company's view. Having said that, the current rise, correction, if I may say so, or rise, whatever, is reflecting that scenario. We see with all commodities, probably, we have seen with onions, and we have seen in the past, there can be spikes which is not in people's control. Getting back to numbers and Sanjay's question now, the inventory position is extremely tight. Hence, going into next year, though nothing has been done, it is reasonable to assume that there will be no diversion allowed towards B-heavy and juice. That is a reasonable assumption today, is our personal view and company view. Keeping that in mind, yes, only C-heavy will be allowed. We are equipped to do that in all our units. Crushing might reduce a bit in some units, but overall, we keep our targets intact. We are reworking our numbers. On Sanjay's question, we will get back to you once we rework our numbers. Yes, your C-heavy assumption is not too much off the mark. Right. My actually concern was more about, I think from the grain, because of the availability of grain in your catchment area, because what I understand, your Maizapur plant is equipped to do approximately 10 crore in grains. Sanjay, all your assumptions are correct. Grain has two parts to it. One is broken rice and one is maize. Come September, October, we would see, I think the government very clearly giving the price and creating availability for the broken rice also. Broken rice is there for the open market. They will give the availability by not using it in the food packet. We are told like probably 25% is being mixed right now in the rice we all eat. That will be reduced to 10%, and hence that 15% will be available in the market. Maize is, again, market-driven. We do assume that all your numbers are largely in order. Right. Maizapur can make sugar, in the sense, last time, if I can recall? Yes. It is ready. We had planned for this anyway. Right, sir. My second question on the prices. I know it is difficult to sort of figure out the usual, what could be the average, say, price for next one year or so, given the fact that there is so much of volatility in the production. Is it also sort of fair to assume that crushing will start much earlier than what we used to do? If that happened, then can there be a recovery loss, and that probably might impact the full year production for the industry as a whole? Okay. If we see the entire program and the entire scenario, assume you start early, you will be able to sell at a much higher price than you would be able to sell probably later on, let us say. The price trajectory has moved upwards because of that tight cash flow. The claim, the loss or whatever, perceived loss from the distillery section, which will come to every company, will be answered by an increase in sugar price. There may be cane price increase, yes. You are seeing some positives, some negatives. There will be some cost pressure, there will be some realization gain. It is impossible to quantify that today. Having said that, the sugar price is the biggest delta in a company like ours or in any company. If there is a delta upwards on the sugar price, which I am sure it is. The average has moved up. As you say, the base has moved up and firmly, sustainably so. Right. We know that sugar price base has moved up. All are assumptions, as I said, when we know. We know cane price might go up. We know distillery may be banned from making B-heavy or juice. Keeping all these variables together on a single page and trying to work out numbers, I am not thinking that we will end up very negative in this calculation. Right? Yeah. Basically, what I could understand, the benefit of higher sugar price will be much more than all the negatives which probably will come into it. Sanjay, much more. Okay. Right, sir. Sir, my last, maybe if you allow me one question on PLA, status of PLA project. In first year, what kind of an utilization we are expecting? Probably now we are very closer to the project commissioning. I am sure we would have some bit of an target or some bit of an idea about what kind of utilization in first year itself can happen? Sanjay, as far as commissioning goes, lactic we should be able to commission in October, and PLA in December. Okay, thanks. Right. Fine. Thanks. I think that is all from my side. Yeah. And how the production, quality, timing, quantity plays out, we are very clear it will play out. We do not know, as I said, it is a new business. One does not know anything. Right, sir. Okay. Thanks. Thank you very much. Thank you. We take the next question from the line of Pankaj Tibrewal from Ikigai Asset Manager. Please go ahead. Good afternoon, Vivek Saraogi and Pramod Patwari. Just a quick one that recently we saw there was some news on gutkha guys being banned on using plastics. I believe it is a very big thing for us from a PLA perspective. If you can just kind of throw some light how big that opportunity could be, and what is the current regime, and how is the discussion with those guys going on? It will be quite helpful. I will follow up with the second question. Pankaj, sorry. No, you were saying something else? No, I will follow up with the second question. Okay. Just what kind of opportunity. Pankaj, you have said hello to me and Pramod, and Avantika has to answer the question. Avantika answers. Okay. Avantika is answering. Hi. Hi. Hello, Pankaj. Thank you for the question. Yes, there is definitely movement happening in more sustainable packaging for pan masala gutkha, and we are pretty much in the thick of it. This is still a dynamic agenda. While we have had very good successful technical trials, I think we will see the results unfold in the next two, three months. This is the best I can tell you today. Okay. We are moving. Can- Sorry. Can this kind of a change, if it moves in the right direction, absorb our entire capacity? Is that the largely opportunity could be? Largely it could. Pankaj, I think we are being defensive, and let me just put it in my way. The mandate is in a good advanced stage. There have been trials which have been positive at the end of the consumers also. The opportunity is large. It will all scale up, become larger. Why won't it set spread to other snacks? I don't know. The opportunity is very large. It has to play out. The beginning and the first round should be fine and give us a better idea of the terrain when we enter. Fantastic. Just a medium-term question, just to, everybody's focused on next three months, six months commissioning capacity utilization. But if we take a slightly medium-term outlook for the company as a whole, can you give us that this INR 3,000 crore-INR 3,200 crore CapEx, can it create a parallel Balrampur which we are seeing today? Is that the right thought or right direction, provided if certain things started stitching together in terms of product lines on PLA, a parallel Balrampur can be created? [crosstalk] Any thoughts on that? Yes. If I have to answer it very blatantly, definitely yes. I think we could. I just want to address a little bit what we expect within this financial year. We expect that from January to March, we will have quality production which will be sold. The quantification of it would be a little bit difficult to give today, but a safe expectation may be around 40% on average capacity utilization we should be able to achieve. It should be better than that. But this is assuming that things go as per plan, and I think that that's our target. Actually, target is higher, but that should be easily achievable. That guidance is something that I'm giving. Pankaj, again, trying to answer it very clearly. If things go right, definitely. I have no reason to believe, or we have no reason to believe, with the evidence gathered in the journey till date, that this cannot be a reality. This is, however, our first attempt. As you said, some patience and some tolerance, which you have outlined in your question itself. Yeah. That is quite good, and wish you all the best. I think we are embarking on a very different journey of creating what our next growth lever for Balrampur could be. Wish you all the best. Thank you. Something great for the country, maybe. Absolutely. Look forward. Thank you. We take the next question from the line of Prashant Biyani from Elara Capital. Please go ahead. Sir, given the current scenario of below normal rainfall in many parts of India, how would be the cane crop quality in your command areas in comparison to generally how the quality has been in yesteryear? For Balrampur, the rainfall witnessed till date, which is till we talk, has been absolutely ideal for cane. There is no El Niño in our area, because a little less rainfall in East U.P. improves the recovery only. We are positively inclined for our crop till now. Okay. On the PLA- If I may add, please. This El Niño is a bigger paper scare, at least for the cane crop, than reality. Even Maharashtra dams, reservoirs, maybe some parts of Karnataka, little parts, but the rest is much better than media is making it out to be. Again, personal view, all to be vetted in September. Sir, on PLA, we have told historically that we would be targeting areas where the cost of PLA would be least in terms of total product cost. Sir, on the business development slide, we have mentioned about garbage packages or bags or lunchboxes and others, but how is the business development going on in the product segments where PLA cost would be least in terms of total product cost? I think that, first of all, the items you are mentioning are banned in plastic. That's definitely why PLA and compounds of PLA work, and this has been happening even since before we announced any capacity. Straws, largely of all organized players are made out of PLA. Garbage bags have a percentage of PLA as a compound. There are many carry bags, et c., also. In that place, we are quite successful. Other than that, this flexible packaging, it's a fraction of a cost of the finished product. Especially as mentioned also in the pan masala gutkha with other market prices like aluminum, et c., going up a lot, PLA actually becomes very viable. Cost-wise, we are actually competitive now. We do not see now the cost being that much of a barrier, and definitely banned goods and their cost is not that much of a barrier. We are progressing very well. Okay. Thank you so much. That is it from my side. Thank you. We take the next question from the line of Shailesh Kanani from Asian Markets Securities. Please go ahead. Yeah. Good afternoon, everyone, and thank you for taking my questions. I had a few queries. First, with respect to the recent FSSAI recent notification. You have answered it in a partial manner, but I wanted to know, are there any other primary material alternatives to the pan masala industry apart from PLA to your mind? Because even the opportunity can be very big. If you can kind of throw some light on that. Yes. No, good question. Definitely, PLA is one of the without PLA in some percentage, it is difficult. An alternate primary would definitely be paper, and that would exist probably along with PLA, but it cannot exist alone. That is the thing. It is either PLA in whole or PLA in percentage, but PLA would be required considering the requirements of the packaging. That is very encouraging for us considering the tonnage. If you can just give some numbers here, what can be the tonnage consumption and what could be the potential addressable here? Actually, to find a reliable organized data is. Unfortunately, we are failing to find verified data on this. But we see it to be a very large market. I cannot throw a number in this because it is not verifiable. If you have verified numbers, I would actually like to get some inputs there. Yeah. Because I also have tried to search it because there are multiple organized and unorganized players as well over here. That is the reason I thought maybe you will have some more color on that. To be able to say it with precision, I cannot throw a number. It would be irresponsible, but it is large, let us put it that way. Yeah. It is quite large. Thanks for answering that, Avantika. My second question was with respect to our history segment. This quarter, the margins have been quite resilient, right? Especially when what key factors has helped that, because there has been a sharp rise in transfer pricing, right? Considering that more than 80% of sales have come through sugarcane as a feedstock. What are the reasons? What worked in terms of margins, and are these margins sustainable? Margins. I think margins will vary on a quarter-to-quarter basis, depending upon the what feedstock we are using for distillation. In the quarter gone by, it was largely B-heavy and the maize-based ethanol. There was hardly any sale on account of juice-based ethanol. That is the reason margins are at a good level. Sir, what I was trying to understand is that the transfer pricing has gone up on the year-on-year basis. Right? There is a good 20% jump in terms of transfer pricing, and more than 80% has come through the sugarcane group. I was wondering if something has happened. Just wanted to understand the margin perspective over here. Shailesh, this quarter being a seasonally weak quarter, whatever expenditure we incur in Balrampur distillery. In the sugar division, that was retained in sugar division itself because we have intention to run on sugar, not on juice based. Otherwise, it would have been transferred to distillery division. So you are saying in apples to apples, this may not look comparable. Are you saying that? Yes. It is not comparable. Right. That is your query answered, I think. Okay. Just to conclude on this, margins might come down for the distillery division if we kind of continue on sugarcane for the ensuing quarters. Is that right assumption? One will take away, one will give. Yeah. L et me probably explain a little better. If you do not make B-heavy, you will not lose sugar. You will make more sugar. Because what is B-heavy? Sugar is converted into ethanol sugar, in brackets, having starch. You will make more sugar. If you make more sugar, you will make more money on sugar sales in both quantity and price. As I attempted to explain in the beginning, this will be, in our calculation, positive net- net. That is what it looks like. Fair enough, sir. Thanks a lot. Sir, just last question from my side. You have also answered this a little bit, but if you can give some color in terms for us to build in ethanol volumes, in terms of mix as well, for FY 2028. It would be kind of little helpful considering there are too many moving parts? Shailesh, first let the government policy come. Once it comes, we will have some more idea. Sanjay Manyal did post a nice number in the beginning. Not having done numbers in detail because this news is floating in the last one or two days. What he says looks accurate. Looks. Fair enough. Okay, fair enough. Thanks a lot, sir. That is helpful. Any number we are working with in terms of SAP hike, considering the sugar prices and in general, we are entering into state elections next year? So you know, earlier I would have thought that if prices remained benign, the hike may not have happened. But in all probability, now definitely there will be some hike. I said in the beginning, I am assuming cane price hike. I am assuming ban on diversion. Built in some numbers for sugar realization. At the end of the day, the debit and credit, net we should come out as a winner. That is what I said in terms of numbers. That is our best guess right now. Sure, sir. That is very helpful. And sir, all the best. Thank you. Thank you. We take the next question from the line of Vikram Suryavanshi from PhillipCapital India Private Limited. Please go ahead. Yeah, good afternoon, sir. Sir, just to cross-check, is there any change from the earlier quarter what we give as a closing and consumption and production for this year? Is there any material change? Because I am getting different number from different sources, so I just thought to, what are our numbers? Come again, please. I wanted the balance sheet, sugar balance sheet number for a country for 2025 to 2026. What is our estimates for production, consumption and closing stocks? No, I will not hazard a guess today with government. No, this year, the 2026? 2026 also, I don't want to say because there's so much of confusion going around here. ISMA is putting a particular number, government is saying something, market players are saying something. No point attempting. All I said, and I maintain, the market has moved prices to the current level assuming a number which is probably lower than reality. I'm just giving a figure. Assume market is thinking closing stock is 30 lakh tons, it will be 35. Got it. Because I was wondering, we are close to the season and still there is a variation of almost as high as two million in the closing stock from different sources. No, no. Two million is all crap. Nonsense. No, from the lower side of number to higher side of closing number. So difference between higher and lower? Two million is not possible. That is all I can say. Okay. Just on our company, basically, obviously, we have seen good improvement in cane crushing, despite there is a challenge for most of the states. How much incrementally we can see in terms of cane area benefit we have? Because obviously there is a yield and other varietal benefit. At least for cane sowing area, how is the situation for 2027 compared to last year? 44 to 45. We have had a good sowing season. We do not see any problems. We do not, for the whole country, we cannot say. For our company, we have had a good sowing season. Yeah, but area may be flat kind of thing. But yield looks much better. Yeah, which is good. Yield looks much better. Okay. Any comment on international demand-supply situation? None. Everything is the narrative. As you understand stock market, narrative keeps moving. El Niño, media, all narratives keep moving in one direction. It is not as alarming as people are making it out to be. But yes, the situation is a little tight. So if it is 10 units tight, people are thinking it is 20 units tight. But it is tight. But let's not overplay the hand. Like you said, two million. So this is the kind of rumor mongering which creates excessive speculation. I am not blaming you. I am saying this is how the people are playing it. Got it, sir. No, I was trying to get your views on any view on Brazil production or how international output looks like. I think, Pramod, you want to answer that international. International, Brazil, Thailand. Brazil is expected to be at around 14 million tons. So now the ethanol is more profitable in Brazil, so the diversion towards sugar will be on a lower side. EU, we are seeing some contraction in the sugar production. Overall, there may be a deficit of 1 million-2 million tons, but it is too early to give any number as of now. Understood, sir. That was it. Thank you very much. Thank you. Thank you. We take the next question from the line of [Tanuj] from SKP Securities Limited. Please go ahead. Good afternoon, Vivek. Yes, please. Sir, wanted to understand that this tight closing stock, when will it be normalized? Thinking about the sugar realization, the higher sugar realization can continue for more than a year or so, not 46 levels, but at least 43 levels. When can we see the stock of around five million? How long will it take to normalize? Probably in one year. Okay, let me answer. Probably in one year, because if they do not allow diversion next year, and assume their gross production is 31 million, consumption is 29 million, and three- odd million is the closing stock. Give or take 5 lakh here and there, 5 lakh on the effort side. Even if consumption is to move a little, 45- 50, you could see 1st October 2027. Having said that, how to say, probably the levels of prices you said, I am looking north of that in the coming years. Okay. Got it. Thank you so much. Just one more question on the PLA side. The news today that pan masala should be free from plastic and synthetic polymer. Will PLA qualify for that? This is something which is in a bit of a dynamic stage. Yes and no is the answer, which is what we are getting clarification on. Just wait for every people to clarify. Just wait for a short while. Just a short while. Okay, got it. Thank you so much for the clarification. Thank you, everyone. Thank you. Thank you. We take the next question from the line of Divyansh Thakur from Finterest Capital. Please go ahead. Hello, am I audible? Yes, please. Sir, so I just wanted to ask about that you mentioned about the 40% minimum capacity utilization. If we are starting from gen, so what kind of capacity utilization are we looking at? Not the short term, in the medium term, and what all things are lined up, what all policies are there? Just wanted to get information on that. Again, let me attempt. This is something new for us. Is this a global first? No. Do we have the best technology suppliers? Yes. We have run distillation business. So one is a little more sure than probably an absolute newcomer. Having said that, we are a bit of a newcomer. Again, I say, if you have not pushed by a quarter, why not 100% capacity utilization? But it will take some time. So it is impossible to do this quarter numbers on this business before it is even begun. The macro, and I think Pankaj Tibrewal put it very well. If we do not see three to six months at best, one should feel that it is going to be very positively inclined. We will get the quality. We will get the market, is our view. So do not attempt, please, and this is a humble request. Do not, please, attempt to put quarter one on it, at least. No, sir. Absolutely. I am not taking a short-term view. I am already thinking mid to long term view because- Mid to long term, 100%. Why not? Yeah. Sir, just to get your view on the mid to long term, how do we I understand that we are new to this business, but we would have had discussions in the internal meetings. How do we see it planning going ahead? Is everything inclined towards us? Yeah. As I did say, internally, all evidence gathered till now is all looking positive, both on the marketing front and on the production front. Okay. Thank you so much. Thank you. Ladies and gentlemen, I have there are no further questions from the participants. I now hand the conference over to the management for their closing comments. Okay, thank you. Just one more request, that let's not fall prey to rumors, and we all keep a calm mind. We look inclined positively and a little bit of patience on the PLA business. Sugar, as I've told you, we look forward positively. Thank you, and anyone having any questions can contact us. Thank you very much. Thank you so much. Thank you. Thank you. On behalf of Balrampur Chini Mills Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your line.