Ladies and gentlemen, good day and welcome to Balrampur Chini Q2 FY27 earnings call hosted by 361 Capital Markets Private Limited. 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 0 on your touchtone phone. Please note that this conference is being recorded. I now hand this conference over to Rajesh Majumdar. Thank you, and over to you, sir. Thank you. Good afternoon everyone and thank you for joining us on Balrampur Chini Mills Q2 FY27 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 earlier. I would now like to invite Mr. Saraogi to make his opening remarks. Over to you, sir. Thank you, Rajesh, and a very warm good afternoon to everybody, and thank you for joining us on our conference call. I trust all of you have had the opportunity to go through our results presentation. Providing details of our operation— operational and financial performance. I will give you a brief update on the sector followed by our company's highlights. The 25-26 sugar season has turned out to be tighter than expected with lower than expected production, resulting in a drawdown in inventory. The closing for stock for the season is 3.6 million. Providing an initial cushion for domestic availability. The tighter demand-supply balance has led to firming up of domestic sugar prices, providing relief to millers and offsetting higher cane costs and pressure on ethanol markets. Looking ahead to the '26-'27 season, an expected production is expected to decline, and the demand-supply balance, we will talk about it. I'll give you a detailed thought in the question-answer session. This is owing to predominantly lower production expected in Maharashtra and Karnataka owing to the El Niño conditions. While UP is expected— production in UP is expected to be relatively stable. So because of the water availability and better irrigation facilities. These factors— we expect that domestic prices will hence remain firm. Government has taken various measures to ensure adequate availability to contain the sharp rise in pricing— prices. And currently the first step is to allow TRQ of 1 million ton up to 15th November, right? Ah, sorry, 15 lakh tons, 10 lakh tons, right? That is in the TRQ method. In this environment, maintaining the right balance between sugar availability and imports will be important to maintain stable prices and healthy industry economics, together with balancing the needs for, you know, our other stakeholders, the farmer and the consumer. Turning to our performance, company has delivered a strong performance during a seasonally, seasonally weak quarter. Strong volume coupled with improved realization resulted in sugar segment PBID to increase by 166% to 140 crores. during Q2 '27 as compared to corresponding quarter last year. Improvement in sugar realization supported by firm domestic prices has helped offset some cost pressures also arising from the West Asia crisis. Distillery segment was affected by compressed margin due to non-revision of procurement prices of ethanol over the last 3 years. Despite increase in sugarcane prices, that is the FRP, again over 3 years. So we have from 16% sugar— FRP is increased by 16%, ethanol price is not gone up. Including this year, 20%. Yeah, 20% without no— with no corresponding increase in ethanol price. UP government is yet to announce the state advised price for the current season. If the industry prospects will remain closely aligned with the cane price announcement and the import policy of the government. Together with the domestic, domestic production. I am pleased to share that the board of directors in its meeting has declared an interim dividend of rupees 4. per equity share. On our strategic initiative, the 80,000 PLF. Project continues to remain on track, that, and we are hoping to commence operations in November itself. Construction activities are in full swing and we have already spent ₹2,400 crores approximately by 15th of October. Alongside the project execution, we are making encouraging progress on the product development, customer trial, market engagement, including securing our first institutional order from the government for PLA-based product. To conclude, our integrated model has enabled us to navigate changing industry dynamics while continuing to focus on maximizing value from every stick of cane. As we strengthen our core operations and progress with the PLA project, we are building a more diversified sustainable growth platform aligned with evolving environment priorities. Backed by a strong financial position, focus on efficient capital deployment, we continue to strengthen our operation— operations, enhance efficiencies, create sustainable long-term value for all our stakeholders. Thank you. So we now, uh, Pramod, do you have anything to say? Yeah, let's go to the Q&A session. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. 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 Prashant Bhayani from Elara Securities. Please go ahead. Yeah, thank you for the opportunity. Uh, Pramod sir, between Q1 and Q2, we had around, uh, ₹4.8 increase in sugar price. Now on the total sugar volume sold for Q2, the additional EBITDA or EBIT should have been around ₹159 crore based on ₹4.8 extra realization. As cost structures would have hardly moved between Q1 and Q2 because there is no crushing. But it does not seem to be the case. Can you explain, uh, why is there this disparity? Hi Prashant, uh, during this non-operating quarter, there are certain fixed overheads like depreciation impact maintenance which we continue to incur, including the repairs and maintenance which are very aggressive in this quarter before the commencement of the new sugar season. All this gets charged to profit and loss account in the absence of any incremental production. So that is the reason when we report better number in Q3 and Q4, it's Let's scroll back. I don't know whether you have missed this point or not in terms of your estimation, that fixed overheads, fixed factory overheads gets charged to the profit and loss account. in the absence of any incremental production. Okay. And this is a yearly phenomenon. Yeah, I'm sure. Sir, for this current season, even, uh, C-heavy molasses-based ethanol is not allowed to be diverted. C-heavy is always allowed to be diverted because C-heavy does not call for any diversion of sugar. So if you understand, molasses is a natural byproduct. So C-heavy is being diverted. It's— they have sought tender for C-heavy. We have tendered all over India. Everybody's tendered. Who has a distillery? Uh, and sir, how much of import contracts would have been signed or imports would have taken place? Uh, if you would be knowing, can you share that? We don't yet have any data. And, uh, let me now begin the subject of, you know, availability. So let's say we have 30 6 lakh tons. It's easier for me to say in lakhs. So 36 lakh tons is the opening stock. Let's assume 270 is the production and 285-290 is the consumption. So there is a drawdown in inventory of, let's say, 15 lakh tons. So which brings your opening stock down to 20-21 lakh tons. In that case, you will need at least another— uh, sorry, uh, it brings the, uh, inventory down to 16 lakh tons. 16 lakh tons. So if inventory is down to 16 lakh tons and you want some comfortable inventory level, maybe 2.5 to 3 million of imports will be needed. That is our personal projection. As Balrampur. And, uh, ESMA as of now has not yet released its production estimates, and we are giving a very initial production estimate. Sure. So the long story short, there will be a requirement. It can be 2.5, it can be 3.5. So we're taking a basic average of 3 million as or 30 lakh tons as would be needed. from the import market. Sure, uh, sir, for the upcoming sugar season, um, I mean, how— or the season which has already started, how much of grain ethanol can we produce, and with lower utilization of the plants, uh, what kind of fixed overhead per unit need to be absorbed more? Yeah, please. Prashant, for the ethanol year, uh, I think our peak production has been in the region of around 28 crores. In this scenario, we can still do between 18 to 20 crores including the ENA and with CAG. Our Mojapuri distillery is expected to run fully on grain, which can be maize as well as rice. Intention is to earn that, uh, run that distillery for 8 to 9 crores. Subject to availability of wheat stock. So just to let you know, the tender has been invited, and, uh, I think within 15 days one will get to know everything. We have tendered, everybody's tendered, so outcome of which will be known in 15 days. Sure, thank you so much. Thank you very much. The next question is from the line of Deepak Ajmera from Elpro International Limited. Please go ahead. Yeah, hi, Arpit this side. Thank you for the opportunity. My question is towards FRP price increase, what farmers are asking. And since now the UP elections are approaching next year, so Uh, what is the company's outlook towards that? And I'm sure the company would have done some scenario analysis in this regard. So let's say if ₹50 or ₹100 ask increase is implemented, what is the impact over, let's say, company's EBITDA? That is, our cane price is determined by UP government. So we do not yet know what the cane price increase would be. So instead of speculating, I would want everybody to wait for just a bit. A bit would be maximum November. No, my question is towards that only. We are not trying to speculate, but some scenario analysis would have been done from the company's side if this much, uh, let's say, price increases. implemented, what is the impact overall on the EBITDA level? So, uh, let's assume last year we crushed around 10.4 crore quintal of cane. Good. Let's assume we are able to do 10 crores this year. So ₹10 increase will have a variable cost impact of ₹100 crores on the company. Every ₹10 increase in cane price will result into ₹100 crores of incremental raw material cost. Got it. Thank you. And second question is regarding PLA. So, uh, from our knowledge and understanding, uh, PLA, uh, costs more than, uh, its current, let's say, uh, the material which is running in the market. So, uh, what is the company's saliency point of getting our facilities utilized. Hi, uh, thank you for that question. I mean, I think it's the most basic question which I think I've been answering for 2 years now, but I'll answer it again. Uh, so basically, uh, PLA is a bio, uh, degradable and bio-based polymer as compared to its conventional counterpart, which is fossil-based and non-biodegradable. So the premium is obviously going to come because of its environmental as well as health benefits. It does not leave microplastics behind. And it is, you know, completely atmanirbhar and does not depend on crude-based inputs. So that is the basic reason that we would command a higher price. And yeah. Okay, and on the biodegradability question, uh, up to our knowledge and understanding, it is industrially compostable, not naturally biodegradable. So what is your take around that? So I will, uh, no, so this is— I think it needs deeper understanding. Just if you, uh, understand the technicality of it, biodegradable is an umbrella term. Industrial compostability is a subset of biodegradable. It is the most stringent testable international standard which PLA passes. Does not mean that it will not biodegrade in the environment. It only depends how much time it will take to biodegrade in the environment, which is a function of temperature and climate conditions, moisture, etc. So, uh, this is, uh, not the, uh, right way to look at it. It will definitely biodegrade and much, much faster than plastic, like maybe a hundredth of the time. And, uh, you know, if this is, uh, the certification is industrial compostable because that is the only international stringent testing standard that exists. I hope that answers the question. Hello. Mr. Devansh. Since the participant is not audible, we will move to the next question. Uh, yes, sir, you're audible. Yeah, yeah, yeah, yeah. First of all, uh, congratulations on a great set of number and congratulations on setting up the machinery, you know. Uh, so basically we saw various social media videos on, you know, how the management, you know, how from port to the facility it took a lot of effort. So congratulations to the whole team. So, uh, I— my question is regarding, you know, the crude prices have moved up. That has also led to the prices of plastic going up. So, uh, you know, our competitive density must have increased because the prices on the other end has moved up. So any views on that, and how do we see this market? So absolutely, you, uh, put the point correctly. Uh, definitely the price gap has become closer, but, uh, definitely some input cost of our production has also gone up. So not exactly like totally, uh, eviscerated, but it is much more competitive and it is today a much easier thing to sell than it was a year ago. Uh, okay, okay, that's great to hear. Thank you. Thank you very much. The next question is from the line of Tanuj Nangalia from SKP Securities Limited. Please go ahead. Hello, good afternoon everyone. Am I audible? Yes, good afternoon. So, uh, my first question is, uh, so what is your outlook towards the realization? Like, what is the sustainability of it, especially with regard to import parity price and crude oil if they move down from this, these levels, like if they normalize? So just to give you a flavor, as I said, we will require 3 million. And, uh, the only way, or the best way, for 3 million to come in is that industries, stroke traders, import it. So given the price trajectory, if the global prices move down, people will go and import. That is not to be seen as a threat but to be seen as an opportunity. So if— just to tell you, if international prices come off from here, India will get in. And depending on how fast government clarifies all the policies, import policies. I don't think crude— if in your mind is creating a worry on international prices and domestic prices, it's not a worry. Wait for that. Okay, uh, thank you, sir. So one more question, like sugar prices have increased around 14 to 15%, and in future we will be using our sugar for captive consumption in the PLA plants. So just wanted to have a flavor that how much has the PLA prices increased year on year because Uh, it's again, this will be a trade-off whether selling sugar or manufacturing PLA because the prices have increased there. This is a good question. Uh, so I think that, you know, sugar prices have not only increased for us, but it's a global phenomenon. Sugar prices are up across the world, firstly. So I would say, and even basically sweetener prices, I would say, are up across the world. So, uh, it, it sort of, uh, puts us at a level playing field. A, and, uh, you know, B, definitely it, uh, it puts a bit of pressure, um, how to say, on what to do. But I think PLA outperforms in terms of additionality enough that we would not have to think about this. And, uh, I think that, uh, you know, sugar prices— sorry, PLA prices have also increased Uh, in the last 6 months at a 10% level already. That's also Okay, thank you so much. That's it from my end. Thank you very much. The next question is from the line of Rajesh Majumdar from 361 Capital Market Private Limited. Please go ahead, sir. Uh, yes, sir. I had a specific question on PLA. We've been hearing of the FSSI order on the pan masala makers, uh, to kind of, uh, use a different product and that norm has, uh, started getting applied. So in terms of an idea of the size of the market and whether our PLA plant can supply a significant part of the requirement, uh, is the question I had. So yes is the short answer. So yeah, just let me keep this a little more flavor. Let me give this a little more flavor. So we are getting into a new business. Let us talk of this in 2 parts. One is the production, one is the product marketing development, you know, buyer of that product, to put it simply. So I think our progress in both the fronts is very encouraging. We are working with various stakeholders, and a lot of big names— I don't give you names yet— have achieved quite a lot of success. Even the government mandate is nearing completion, and that FSSAI order will be definitely diluted, and you will get on to the that aluminium order, yeah. So, so we've also passed all the testing protocols, uh, which are there for this application. So as, uh, Mr. Sarogi is pointing out, we— it will be sort of closing in soon. And yes, I think significant part of PLA can go into this application. Very interesting. That's useful. So, uh, also I had a question on the price of cane. So earlier you had guided at a certain EBITDA margin for the PLA plant, and now that we are close to commissioning How will the increase in the price of cane impact the margins, if any? And would you like to give a change in the guidance on that EBITDA margin? So I'm, uh, just to complete my thought, so as I said, on the product marketing side, we are getting great success, hopefully again new business. Patience required, 3 to 6 months minimum. On the production side, when we get into producing the product, it is again new for us, so the cost of production is right now available on a spreadsheet. When we go into producing, then we get to know the actual cost. So yes, the cane cost, the sugar input transfer pricing will be higher. Earlier sulfur was like crazily high. It's already come off 20%. So let's— my humble request to the investors, watch And, you know, we don't— let's not look to guide this business every quarter, every for the next 2 quarters. Having said that, post that, we are very confident that this will turn out to be a new business with great potential. Numbers will definitely follow in 6 months. Therefore, there will be trials where you have to achieve quality. You might have to market, you know, to some people to get them In all this requires a bit of patience. Thereafter, I am seeing, or we are seeing, a runway where we will be on the takeoff stage. Post that, I think we will— we could be flying again. I do not want to say anything yet, but we are thinking of a very bright tomorrow with definite patience required for 6 months. So if I give you some cost today, it's on the drawing board. Let— it's been commissioned November end. So in one month, or probably our next call, we would be able to give you a lot more education on what the drawing board said on the cost. And what the yields have come, what the chemical consumption has come, etc., etc. Also, marketing would have achieved a lot more maturity, mandates would have achieved a lot more maturity, trials, big buyers would have achieved maturity. So, uh, we, we have been in the sugar business. This is just to give you perspective, and I feel it too personally, where you— we make, uh, you know, put a put up a new factory, or let's say we put up the first 100% ethanol plant in Mezhapur, we just pressed a button. And the plant went smooth. So that, that's our core business. We've been— I'm here for 40 years now, 38 years. So that we know inside out. Sugar is something which is part of fermentation, part of polymerization. We do understand, we've got the best technology, we've got huge guarantees in from the suppliers for both quality and capacity. We hope to achieve the world's best quality and we hope to make it at the lowest, you know, conversion cost. We'll require some time. And we hope to get the marketing in also very well. Right, sir. And if I could sneak in a last question, that, uh, can we expect, uh, capacity increase in this segment down the line as the UP government would have given a short window in terms of the incentives, and when do these incentives expire for us to log in, say, a fresh round of capacity increase in this same area? Yeah, that's the last question. Nothing will expire. We will put our foot in the door everywhere. Don't worry, all, all of that should not be any investor's concern. Anything available will not be missed by Balrampur management. Right, sir. And can it be expected that the new capacity CapEx will be much lower? Because given the fact that this, uh, initial capacity is logically physically understood with the supplier, much lower. Okay, thank you. That's useful. Thank you very much. The next question is from the line of Shailesh Kanani from Asian Markets Securities Private Limited. Please go ahead. Yeah, good afternoon and thanks for the opportunity. Greetings of the festive season to everyone. So most of my questions have been answered. Uh, just, uh, sir, if you can talk something about Uh, in terms of yield for this current season, and last year we had a decent recovery uptick. So if you can throw some light on that, uh, I know it's early days, but still, if you can throw some light on that. at Balrampur. So are you asking for Balrampur's crashing figure? Yeah, yeah, sir. So there have been unseasonal rains, that cyclone. Yeah, so that has been a little damaging. So Balrampur as a company, we crashed ad hoc season-wise, not balance sheet-wise. Is, uh, 1,040. Uh, we crossed that, we crossed 10 crore 40 lakhs. Maybe we will go a couple of percentage points lower. And recovery initially would be lower because of the soil being a little affected by rain. Thereafter, we hope the recovery will also pick up. Early days, but maybe recovery could be also 0.12. But again, as I said, it's guesstimate beyond the point. The more accurate estimate of the 2 can be key and availability. Which I am saying could be 2% lower. Okay, one— if one has to put a figure to it, but again, impossible to predict. Now, in the Jan call, amply clear on both sides, but yes, You can work with 2% lower on cane availability in a scenario where you will see what unfolds. Fair enough, that is useful. Uh, anything on the, uh, Red Rock front? Because I think, uh, that way, right, right. Right, so that's not been blessing of the past. Yeah, yeah, bless— definitely blessings are required everywhere in life. But it's a lot of hard work. a replacement of Hero 238 in terms of if ma'am could update on that. Yeah, yeah. So, so I think, uh, it has been, uh, sort of written about as well. Uh, so there's a variety called, uh, 12012, uh, and this is, uh, you know, more promising in terms of yield and recovery. Does not have the lodging, does not have the red dot inclination. Apparently farmers love it. We are also in the process of multiplying. We should see some kind of, uh, percentageable sort of quantity in next 2 years of it. Um, but this has also been widely, uh, written about, so I would encourage that people read it. Uh, and yeah, we hope that this works better than 238. 21012. Sure. And incrementally, uh, anything on the new, new, uh, seats, anything, uh, which is encouraging or looking up to or So again, these are varieties which we are aggressively trying to multiply, but it will take some time, not 2 years, 2 years, 2 years to get to a certain 15-20% yield percentage. Effective percentage. No, Panda, Panda. Fair enough. So just lastly, I know it's a little repetitive question, uh, and in your opening, opening commentary, you have highlighted how demand-supply situation can be for this year as well. Uh, so it would be fair to assume that sugar prices would remain kind of a little bit on the elevated level for the next at least 12-odd months. Sorry, sorry, uh, the, the number I said was wrong. It is, uh, 20016. B016. Sorry, B016. It is not 21012, it is 20016. Correction, I'm so sorry. Thanks, thanks, thanks. I have updated that. Uh, on the sugar prices, sir, if you can throw some light. So we remain positively inclined. See, giving numbers is impossible, but, uh, what should I say? Everybody should feel pleasantly surprised within the realms of reality. Fair enough. Yeah, so positive within the range of reality. But if somebody says average 60— if somebody says average of 60 is dreaming. If you get bearish at 50, below 50, again, I don't think that's reality. No, I think I made my stand clear. Yes, yes, sir. That's, that's more than helpful, sir. Thanks a lot. Thanks a lot. Best of luck. Thank you. Thank you very much. The next question is from the line of Vidhi from Equitas Investments. Please go ahead. Uh, hello, am I audible? Yes, ma'am. Good afternoon, sir. Uh, I had a couple of questions on the ethanol production. I just wanted to understand your, uh, insight, like on the total ESY for 2027, what would be our projected production, uh, on the feedstock basis from C-heavy, from maize, from rice? If we have a breakup here. So we are expecting total production to be in the region of around 18 to 20 crores liter. It can be 8 to 9 crores liter. Around 3 crores liter of ENA and the rest from maize and rice. Do we have a breakup from maize and from rice? No, that will depend upon the allocation. Allocation. Understood. Uh, just, uh, one more follow-up question on the maize pricing. Now with the price increasing of maize, where do we see the break-even point for maize? At what levels? At current prices, uh, maize is leaving something on the table. Understood. Again, again, you know, uh, let me give you some more perspective. Assume the tender asks for more maize. based ethanol, probably you're exerting a little more pressure on the maize price. If the acceptance of the maize-based ethanol is lower, then you are exerting less pressure. Plus the crop— beans is a quarterly type of crop, so you have various rounds of crops. So, uh, we as Balrampur, uh, owing to our strong balance sheet, as and when we get maize at any reasonable price, we put— we buy it cash down and put it inside the godown. All right, let's touch up. Uh, so I have one more question on the PLA. Uh, with the— can I get some estimates for the next 3 years starting FY28, '29, '30? What revenue and what margins are we expecting? So, you know, actually things have been moving dramatically. I would not like to do this. I cannot do this. Right now, but maybe we can have a projection for a year in— after 6 to 8 months. Yeah, after 6 months is as I requested on the call earlier. After 6 months. Okay, so just one last question on the cultivation aspect. I missed your response earlier. I just wanted to get your understanding, uh, what are the estimates that we are having for the area under cultivation and what is the expected yields for the current coming sugar season? Net summary, I had indicated we are thinking of 2% lower cane availability than last year. Understood. Okay, and that is each recovery percentages. Sure, I did also say that it's tough to estimate recovery, but initially it will be lower. Maybe, maybe it makes up. Sure, thank you so much. That's from my end. Thank you very much. Ladies and gentlemen, in order to ask a question, please press star and 1 on your touchtone telephone. I repeat, in order to ask a question, please press star and 1 on your touchtone telephone. Ladies and gentlemen, in order to ask a question, please press star and 1 on your touchtone telephone. The next question is from the line of Vikram Suryavanshi, Vikram Villa from PhillipCapital India Private Limited. Please go ahead. Uh, just to clarify, I think I might have missed about the ethanol side. So grain-based, we are targeting around 8 crore liters. Is that the right understanding? Yes. And that is the amount we have tendered for this upcoming or current season, basically. We are awaiting the outcome of the tender. Okay, okay. Thank you very much. The next question is from the line of Manoj Shah from Laxgov Investments. Please go ahead. Thank you for the opportunity. Just wanted to check, have you started the crushing, cane crushing in UP? And second question is, uh, Regarding the ethanol blending, are you in touch with the government? Like, what would be the level for the next 2-3 years of ethanol blending in the petrol. Pramod. So we have 10 plants in UP. Maybe Central UP we will start after Diwali, and East UP around 20th of November. Ethanol blending, diversion of sugar into ethanol from the sugarcane will depend upon the sugar availability. It's a dynamic thing, so every year we'll have to see what kind of sugar is available for diversion. As far as the policy is concerned, government's policy is in place. E20 is the minimum blend, and they have all— they are also looking for E100 flex fuel vehicles. Okay, thank you. Thank you very much. As there are no further questions, I would now like to hand the conference over to management for closing comments. Thank you, everyone. We are always there to answer any queries. Thank you. Thank you, everyone. Thank you, thank you, everybody. Thank you very much. On behalf of Balrampur Chini, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.