Balrampur Chini Mills Limited — Q1 FY26

Balrampur Chini Mills Ltd Q1 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=BvAz1bcyoV4 Published: 9 months ago

0:00 Ladies and gentlemen, good day and welcome to Bal Rampur Chini Meals Limited earnings conference call. As a reminder, all participant lines will be 0:08 8 seconds in the listenon mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the 0:16 16 seconds conference call, please signal an operator by pressing star then zero on a touchstone phone. Please note that this conference is being recorded. I now hand 0:24 24 seconds the conference over to Miss Jenny Rose from CDR India. Thank you and over to you ma'am. 0:30 30 seconds Good afternoon everyone and thank you for joining us on Balraur Chini Mills Q1 FI26 results conference call. We have 0:38 38 seconds with us today Mr. Vive Sarraghi chairman and managing director of Balraur Chini Mills Miss Avantika Saragi executive 0:45 45 seconds director and promote Patari chief financial officer of the company. We would now like to begin the call with 0:52 52 seconds 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 1:01 1 minute, 1 second 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 1:09 1 minute, 9 seconds shared earlier. I would now like to invite Mr. Sarogi to make his opening remarks. Over to you sir. 1:18 1 minute, 18 seconds Thank you everyone and good afternoon uh for and thank you once again for joining us on our balputur chin news Q1 1:26 1 minute, 26 seconds FY26 earnings call. I trust all of you have had the opportunity to go through our results presentation. I will 1:33 1 minute, 33 seconds initiate the call giving a brief update on the current developments in the sector. According to ISMA, sugar production for the upcoming season that 1:42 1 minute, 42 seconds is 2526 is expected to be around 350 lakh tons the pre- diversion up about 1:51 1 minute, 51 seconds 18% from 29.6 million tons in the previous year. 1:56 1 minute, 56 seconds These are early estimates and are based on satellite imagery, rainfall data, field reports across three key cane growing states. 2:05 2 minutes, 5 seconds While the overall sugar cane area is increased only marginally, favorable monsoon conditions and improve improved 2:12 2 minutes, 12 seconds crop health are expected to drive higher productivity. Statewise, Malash is expected to see a 42% increase in sugar 2:20 2 minutes, 20 seconds production. Uh and these all pre- diversion figures expected to touch about 13.2 million. Karnataka uh in 2:30 2 minutes, 30 seconds early estimates may register a jump of 23% touching 6.6 million while UP may be in remaining stable at 10.2 million. 2:43 2 minutes, 43 seconds In UP there is a decline in can area but we are hoping for a much better yield based on improved crop resilience and better disease management. 2:55 2 minutes, 55 seconds This anticipated surplus presents both opportunities and challenges for the sector. To maintain the market stability 3:02 3 minutes, 2 seconds and avoid pricing pressure on sugar, a diversion of 4.5 million t into ethanol and around 2 million tons of exports 3:10 3 minutes, 10 seconds will be the key decisions. This will help balance inventory while supporting India's clean energy objectives. 3:17 3 minutes, 17 seconds However, with the ethanol prices under juice and bee heavy roots unchanged for two years, the industry continues to now 3:24 3 minutes, 24 seconds eagerly await the timely policy support including revisions in ethanol price and minimum sale price of sugar MSP as 3:33 3 minutes, 33 seconds popularly called. Such measures will be critical to sustaining sector profitability and ensuring timely payments to farmers in a surplus year. 3:43 3 minutes, 43 seconds Coming to our Balapur's business performance, company began the fiscal on a steady note with revenues rising in both sugar and distillery segment on back of higher volumes and realizations. 3:53 3 minutes, 53 seconds Sugar cane crushing operation during the quarter declined by approximately 66%. 3:59 3 minutes, 59 seconds resulting in a 65% drop in sugar production and leading to an un under absorption of fixed overheads due to the 4:07 4 minutes, 7 seconds short season. Our focus remains on strengthening can availability through developmental initiatives and varietal 4:16 4 minutes, 16 seconds rebalancing in future seasons and I would request Avantika to elaborate more on this when she speaks. At the same 4:23 4 minutes, 23 seconds time, we are closely tracking policy de developments as supportive measures particularly in ethanol pricing and MSP 4:30 4 minutes, 30 seconds would be instrumental. As previously stated, our PLA polyactic initiative remains a key pillar for our future 4:38 4 minutes, 38 seconds growth strategy. In recent years, we have progressed from concept to detail engineering, 4:46 4 minutes, 46 seconds secured strategic technological partnerships and aligned with the project with evolving regulatory and market trends that favor green alternatives to prochemical plastics. 4:58 4 minutes, 58 seconds With construction activities now underway, we are building a domestic market by trading imported PLA to seed demand, increase awareness amongst 5:07 5 minutes, 7 seconds manufacturers and converters, and encourage local production of PLA based end products. 5:14 5 minutes, 14 seconds This phased market development approach is helping us establish strong early customer relationships 5:22 5 minutes, 22 seconds and ensure market readiness for a smooth transition to in-house production targeted for commissioning in Q3 FY27 which is October 2026. 5:34 5 minutes, 34 seconds Till July end we have spent about 927 crores comprising 460 crores through debt balance from internal acrals 5:42 5 minutes, 42 seconds towards gross capex which is around 2850 crores. 5:48 5 minutes, 48 seconds Our long-term strategy is centered on sustainable growth innovation and disciplined capital allocation. The sugar and distillery business has 5:56 5 minutes, 56 seconds evolved into stable contributors over the past few years. This year we await the government policy delivering 6:03 6 minutes, 3 seconds steady cash flows in challenging operating environments. Looking ahead we see the pioneering PLA project as a 6:12 6 minutes, 12 seconds structural pivot that will diversify our portfolio into bioplastics and position Balpur at the forefront of green 6:19 6 minutes, 19 seconds transformation. By maximizing value from every stick of Ken and leveraging our integrated model, we aim to contribute 6:28 6 minutes, 28 seconds meaningfully towards transition to a circular economy and a more self-reliant sustainable 6:35 6 minutes, 35 seconds future. I'd now request Avantika to give you an update on Kain and maybe a little bit of PLA and thereafter promote. 6:45 6 minutes, 45 seconds Uh good afternoon everyone. Uh so just to begin with uh Kane so as already stated uh UP has seen a slight decline. 6:53 6 minutes, 53 seconds Ours is also I think flattish to uh maybe a slight decline. We'll be able to give better uh figures in the next 7:00 7 minutes quarter uh because the display and corrections are still on but we don't see a very big challenge there. Uh but 7:08 7 minutes, 8 seconds having said that the yields are definitely looking better. This is owing to the distribution of the rain. I just 7:15 7 minutes, 15 seconds want to compare it to last year. Uh last year we had uh good rain as well if you you know quantify it in inch terms but 7:23 7 minutes, 23 seconds the distribution was a bit uh you know leaving us to ask for. In fact, in few of our factories, we had very big flood 7:30 7 minutes, 30 seconds during the maturity period and this resulted in uh a lower uh crushing and recovery than expected. More effect on 7:37 7 minutes, 37 seconds recovery than crushing uh I would say even over there. And uh this year the distribution up till now has been actually very very favorable. This also 7:46 7 minutes, 46 seconds indicates that there might be a couple of winter showers which as we have been stating for the past one year increases the yield and recovery and plant gain a 7:55 7 minutes, 55 seconds lot. So we're quite hopeful for the weather conditions this year. Um and I just want to also highlight that last year even though we had about a 10% 8:04 8 minutes, 4 seconds lower cane area our crushing only dropped by uh 1.75% uh 1.5 1.75%. 8:12 8 minutes, 12 seconds And uh this just shows uh the on ground activities and work for yield and disease uh management uh which have 8:19 8 minutes, 19 seconds resulted in our positive even in a bad year. So where everybody is uh declining we are able to uh sort of get something 8:27 8 minutes, 27 seconds better out of it and in favorable weather conditions I think we should keep the outperformance up. Um our pest 8:34 8 minutes, 34 seconds and disease uh control is very very uh tight. Uh we have negligible uh I would say pest and disease uh uh encroachment 8:43 8 minutes, 43 seconds of any kind. Our rat management has actually been a big kicker which we saw a bit of last year and we should see even better in the upcoming uh season. 8:51 8 minutes, 51 seconds So now even in eastern UP we have managed to uh do a paradigm shift where now the farmers have started to come out 8:58 8 minutes, 58 seconds and do raton management without us having to tell them. So this actually accounts for 50% of our crushing and this is where we have gotten the uh bump 9:07 9 minutes, 7 seconds up. This could result in in yields of course uh and uh this will help keep our crushing stable. Uh also I want to 9:16 9 minutes, 16 seconds mention that the crushing will start early this year since the festivals are also earlier and the weather conditions are touch up till now touch looking uh 9:24 9 minutes, 24 seconds good. So we see a positive year for uh keen upcoming. Uh then if we move on to PLA I just want to talk a little bit 9:31 9 minutes, 31 seconds about the market uh in India about PLA because I think that that's a a point which comes up in every conversation. Uh 9:38 9 minutes, 38 seconds so just to begin with we will uh begin our commissioning in October and in our first year we uh we'll probably have uh 9:46 9 minutes, 46 seconds about a 50% uh capacity utilization uh with quality in the first year. So um we 9:52 9 minutes, 52 seconds are already on our way to importing and selling under our brand name. We have touched it's also there in the presentation so this doesn't need to be 10:00 10 minutes written down. Uh we have touched uh more than 175 customers directly already. We are catering to 50 plus uh we have 30 10:09 10 minutes, 9 seconds plus trials going on uh with different uh companies of good caliber and uh you know we are creating a lot of awareness 10:15 10 minutes, 15 seconds with our bioon uh uh wheels. This is giving us a lot of tailwind when it comes to uh showing people the 10:22 10 minutes, 22 seconds possibilities whether it is uh at the government places whether it is at big brands and uh things like that. Uh the 10:31 10 minutes, 31 seconds uh the other thing is that uh we expect that by the time our plant is at full capacity our plant should be sold out 10:39 10 minutes, 39 seconds within the country. Uh having said that uh we will of course uh sort of take the best price that we can get whether it is 10:47 10 minutes, 47 seconds inside of the country or outside and we don't see at all a challenge there. Uh I just want to also mention that Karnataka 10:54 10 minutes, 54 seconds and Kerala state governments are uh giving a lot of push for uh circularity, compostability and even in the north 11:01 11 minutes, 1 second Rajasthan, Gujarat governments, all the CPCBs are taking it very positively and even at the central government levels we are getting lot of positive response 11:10 11 minutes, 10 seconds from all the departments. So uh we are very confident and we're very excited to go forward with this. Thank you Ramad. 11:22 11 minutes, 22 seconds Thank you and good afternoon everyone. I hope all of you had the opportunity to go through the results presentation that 11:29 11 minutes, 29 seconds has been shared. So for the benefit of time at our disposal, I would request the moderator to open the forum for Q&A session. Thank you. 11:39 11 minutes, 39 seconds Thank you sir. 11:41 11 minutes, 41 seconds We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchstone telephone. If you wish to 11:50 11 minutes, 50 seconds withdraw yourself from the question queue, you may press star and two. 11:54 11 minutes, 54 seconds Participants are requested to use handset while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. 12:05 12 minutes, 5 seconds First question is from the line of Sanjay Manal from Dam Capital. Please go ahead. 12:12 12 minutes, 12 seconds Uh hi sir. uh have one question on the ethanol. Uh since now we have uh reached almost uh average 19% kind of a ethanol 12:21 12 minutes, 21 seconds blending. Uh what is your view from the demand conditions uh say next few years? 12:26 12 minutes, 26 seconds uh uh uh what is your discussions with the government about increasing the blending from 20 to 25% and uh uh you 12:34 12 minutes, 34 seconds know how how the demand probably will be pan out uh over the few next few years and and what probably also will be the contribution of sugar cane based feed 12:41 12 minutes, 41 seconds stock and uh grain based feed stock uh so so what are what what exactly your discussions with the government on this 12:48 12 minutes, 48 seconds yeah hi Sanjay thank you so I'll I'll answer what Sanjay has asked in a little more so if you saw there was some 12:56 12 minutes, 56 seconds article recently published by CM which was talking about the issues in engines 13:04 13 minutes, 4 seconds beyond 20 government of India has come out with a very clear clarification yesterday promote where they have not 13:10 13 minutes, 10 seconds only spoken about this misnomer being a misnomer they've also very clearly given 13:17 13 minutes, 17 seconds and detailed the benefits in terms of forex etc and they've gone on to say how 13:25 13 minutes, 25 seconds they back the ethanol program per se. So even BIS standards are being fixed 13:32 13 minutes, 32 seconds probably they would move from 26 onwards. They have detailed a road map or they are in the process of putting up 13:40 13 minutes, 40 seconds a road map from 20 to 22 then 25 to 27. So demand conditions don't worry me. 13:49 13 minutes, 49 seconds Government's commitment to the program doesn't worry me especially after what we have read yesterday. It is a very detailed paper but you could share with 13:55 13 minutes, 55 seconds some of the investors if you sound it's in public domain. Lastly, what we are dealing with right now is the 14:03 14 minutes, 3 seconds ethanol pricing. I am very hopeful especially since government has said it's such a beneficial program. 14:10 14 minutes, 10 seconds Uh why not do what they've not done for two years. We are in active persuasion with all government sources for juice be 14:20 14 minutes, 20 seconds both prices and this year being a surplus year. So let me put my thinking 14:26 14 minutes, 26 seconds on the table a bit. Last two years the environment was not that of surplus. 14:34 14 minutes, 34 seconds Next year the first year we are entering surplus production. So the government's attitude when there is a surplus and when there 14:42 14 minutes, 42 seconds is not a surplus very different. So if you saw in the yesterday years they have given about 10 rupees a kg. I'm talking of real time back from maybe 10 12 15 14:52 14 minutes, 52 seconds years back I don't remember uh 10 rupees a kg which is one/ird of the export price as subsidy just to 15:00 15 minutes handle the surplus and the areas. So I think next year we are very positive and I personally feel that the ethanol price 15:09 15 minutes, 9 seconds would increase because this is the only thing which will kickstart the diversion and maybe take it to even beyond 4.5 15:17 15 minutes, 17 seconds million is the need of the hour beneficial for the country and owing to the surplus I guess there is not much of 15:26 15 minutes, 26 seconds an option and I'll also tackle the MSB question minimum sugar price We are again actively lobbying for both MSP and 15:35 15 minutes, 35 seconds exports. But I guess exports will happen when the production figures get much clearer. If you do recall last year in 15:43 15 minutes, 43 seconds January, even with a wafer thin surplus of 1 million, the government did allow 1 million to go out. So given the prospect 15:53 15 minutes, 53 seconds of the surplus being larger, I personally feel that should also happen in around the same time. I mean, one 16:00 16 minutes can't commit. It's uh maybe as soon as government gets confidence promote that the production is what it is being envisaged. 16:10 16 minutes, 10 seconds So these are the you know comments on ethanol demand, ethanol pricing, MSP and 16:17 16 minutes, 17 seconds export. I thought let me brief the house once for all. Thank you. 16:23 16 minutes, 23 seconds Uh and sir what is your view on the uh proportion because last few years the maze uh ethanol production has gone mean maze ethanol diversion has been a lot 16:32 16 minutes, 32 seconds higher than the molasses. So uh you think that government this year will balance this out? 16:37 16 minutes, 37 seconds Yes. Yes. So two parts to this. The demand could not have been fulfilled by the sugar industry owing to lack of raw 16:45 16 minutes, 45 seconds material fully and the year previous to that they just put a grinding all suddenly on diversion. So the demand 16:52 16 minutes, 52 seconds needed to be fulfilled. Maize came and did the gap filling. Now current year if you see the there have been some 16:59 16 minutes, 59 seconds unintended consequences of maze area increasing. So I think if Sanjay I get your question correctly. What if there 17:07 17 minutes, 7 seconds is an over supply we will get our share is the answer. 17:12 17 minutes, 12 seconds Maybe m gets curtailed for all you know we get our share because again we go back to the basics. Basics is there is surplus. Surplus needs to be diverted. 17:22 17 minutes, 22 seconds If not diverted, sugar price will suffer. That is the reason why this will happen. That is diversion. Your ability 17:31 17 minutes, 31 seconds if it's 45 million, government will take that and exports also should happen. 17:36 17 minutes, 36 seconds Should the production figure come to what we are thinking it would go to? 17:43 17 minutes, 43 seconds Uh right. Right. So, so one question uh I have on the sugar recovery side. uh last year we uh across UP we have seen a 17:51 17 minutes, 51 seconds significant decline in the recovery uh given the fact that the uh as you have mentioned the rainfall and uh has been a well spread and so is it possible that 18:00 18 minutes we can go back from again 11.3 to 11.7% uh or uh new varieties have been 18:06 18 minutes, 6 seconds hampering that so I think definitely there is a uh there is a chance I mean and I would 18:15 18 minutes, 15 seconds think up to now a good chance for that to happen. Our varietal balance is on a really good front. I would say uh the 18:22 18 minutes, 22 seconds red rot uh len 38 is only about 7% which is super healthy. So that will also give 18:30 18 minutes, 30 seconds us maximum of what it gives and uh the rest of our varieties are also I would say best in the state uh best in the 18:38 18 minutes, 38 seconds country even you know but uh so we are very very hopeful. So Sanjay basically if you know I'm to hazard a guess 11 18:47 18 minutes, 47 seconds promote we went to dropped by4 last year approxim so if we went to 11.3 28 18:54 18 minutes, 54 seconds 28 from 11.72 something like that so I would definitely feel very positive in trend towards recovery but maybe not 19:02 19 minutes, 2 seconds 11.72 in one year maybe 2 years but yes a definite uptick from 11.28 to it 19:09 19 minutes, 9 seconds halfway maybe it's too tough to say now I can say yeah but positively inclined towards increase in crushing from last year's 19:18 19 minutes, 18 seconds figures and positively inclined towards recovery so as we speak today the weather is conducive for 100%. But let two months pass. 19:28 19 minutes, 28 seconds Yes. 19:30 19 minutes, 30 seconds Right. Right. So and and sir my last uh question is on the PLA. Uh so as you mentioned that you have been importing 19:36 19 minutes, 36 seconds uh PLA uh uh to sort of develop the market. So at what price or what would be the landed cost of PLA and will in 19:44 19 minutes, 44 seconds future that uh imported uh price will define the your realization for uh the product. 19:51 19 minutes, 51 seconds So actually we are not at liberty to disclose the figures like this uh due to NDAs and things that we have. uh but obviously we are uh since we are 20:00 20 minutes importing ourselves and uh we are doing everything we are very cognizant of uh everything as we go I sorry I can't give you too much of 20:08 20 minutes, 8 seconds so I I I'll just try and put the basics on the table again so the demand generation and the price would both go 20:16 20 minutes, 16 seconds hand in hand we are hoping for a lot of mandates from the governments which is in their sort of own thinking and within 20:25 20 minutes, 25 seconds their own mindset that maybe it's from some departments which will eat up more than we can make and therefore it should 20:33 20 minutes, 33 seconds be positively inclined towards the price. 20:36 20 minutes, 36 seconds So we are hopeful on both sides our ability to produce and our ability to sell. 20:44 20 minutes, 44 seconds Perfect. Perfect. Uh sir, thank you. 20:46 20 minutes, 46 seconds Thank you very much uh for and you know the price fluctu tomorrow it might not be. Maybe there 20:54 20 minutes, 54 seconds are some you know government puts in some restrictions to uh sort of beef up the Indian industry. 21:03 21 minutes, 3 seconds So there there are lots of things we are working on. 21:09 21 minutes, 9 seconds Right sir right sir. Uh thanks thanks for all the answers sir. Thank you. 21:17 21 minutes, 17 seconds Next question is from the line of Prashant Biani from Ara Capital. Please go ahead. Yeah, thank you for the opportunity. Uh Mr. Saragi, what would 21:26 21 minutes, 26 seconds be your view on uh any changes in SAP that may happen this year? 21:33 21 minutes, 33 seconds Yeah. So SAP is in all likelihood go up would go up. Sorry. 21:40 21 minutes, 40 seconds We are thinking that let's be I'll be brutally honest. 21:44 21 minutes, 44 seconds uh SAP might go up for two years and that may not be all that bad if supported by the measures which we have 21:53 21 minutes, 53 seconds spoken about which I briefed Tom Sanjay Mana's questions because a it will help our crushing to go up B that maybe the 22:03 22 minutes, 3 seconds need of the R for the upcoming UP election and it will also what do you say 22:11 22 minutes, 11 seconds yeah it will give us a lot of raw material for are ethnome and we are hoping see in a period of 10 22:18 22 minutes, 18 seconds years you don't do go through a couple of years of you know glitches so I'm hoping it's a glitch my evidence would 22:27 22 minutes, 27 seconds be this year's ethanol pricing if it happens I I'm we'd be delighted and we hope that our recovery in two 22:34 22 minutes, 34 seconds years will make up for cost increases right and sir slightly related question the lower acreage of cane that we are 22:43 22 minutes, 43 seconds seeing in up is it a result of uh because the varietal change has happened from 0 to 38 to others farmers have seen 22:51 22 minutes, 51 seconds lower yields on newer varieties and hence uh it is resulting in decline in their income. U is the lower acreage 23:00 23 minutes relating to that and any SAP increase can compensate for that? Yes. 23:06 23 minutes, 6 seconds So uh see it's it's never just one factor right for a whole state. Uh so definitely this has a part to play. 23:13 23 minutes, 13 seconds Secondly, people are trying to experiment with a different blend of crops a little bit to see how they can get a better realization and uh 23:20 23 minutes, 20 seconds definitely the SAP going up will uh increase the acreage back. I think the acreage has bottomed out for up to be very honest. Um there does need to be a 23:30 23 minutes, 30 seconds healthy balance of crops to see price of uh each and every crop otherwise over supply of any crop is not good. 23:36 23 minutes, 36 seconds So I'll just complete my thought on this. The uh idea is a variety also finds its home. It finds its yield. It 23:45 23 minutes, 45 seconds finds the correct soil, the correct time to be planted. So how muchever we say until the farmer faces the brunt of 23:54 23 minutes, 54 seconds negativity and some see the fruits of positivity that I think is now let's say 14201. 24:01 24 minutes, 1 second It's a beautiful variety. It must be planted at the correct time. So those who planted the correct time yesterday last year saw fantastic yields. So I'm 24:10 24 minutes, 10 seconds saying all these small experiments with SAP will definitely take our area up and 24:17 24 minutes, 17 seconds our payment and uh you know I'll leave it there. 24:23 24 minutes, 23 seconds Sure. And sir one unrelated question mainly relating on the government side sir any government to government exports 24:29 24 minutes, 29 seconds which happen time and again we hear uh exporting to south Asian countries and few other geographies how does the sale happens actually and at what price does 24:38 24 minutes, 38 seconds it happens is it through companies through government's buffer stock or through trader stock uh it won't impact any sugar companies 24:47 24 minutes, 47 seconds so you can let this question go okay that's it from my Thank you. 24:56 24 minutes, 56 seconds Yes. 24:57 24 minutes, 57 seconds Next question is from the line of Nikil Agarwal from Kotak non-discretionary PMS. Please go ahead. 25:04 25 minutes, 4 seconds Uh yes, good afternoon sir. Uh so just a quick question on the PLA. Uh we have seen all year that many companies have 25:12 25 minutes, 12 seconds used uh BAS to make uh biodegradable paper products. uh while the products do look quite impressive uh but the price point is where the demand gets impacted. 25:23 25 minutes, 23 seconds Uh my point being do you actually see customers paying a premium for the product that you are making because in this case in in the case of 25:32 25 minutes, 32 seconds biodegradable products it did not it I don't see that working out. I mean you've given examples of Starbucks but that's fine. What about other uses? 25:42 25 minutes, 42 seconds So I just want to remind you of one very simple thing that our production capacity will be 80,000 tons and India's 25:50 25 minutes, 50 seconds consumption of plastic is 15 million tons. Uh so first let's put that into great perspective. Uh secondly I the 25:58 25 minutes, 58 seconds short answer to your question is yes people will pay a premium where they see functionality and opportunity to create 26:06 26 minutes, 6 seconds a better uh atmosphere. if they don't do it willingly, I think the governments uh and there are many big companies who 26:14 26 minutes, 14 seconds want to uh you know lower their virgin plastic consumption uh unrelated to any government mandate also. So while I 26:22 26 minutes, 22 seconds understand what you are saying uh it doesn't affect it when it is such a it's not even a drop in the ocean. So this question is not uh relevant in my mind to be very honest. 26:33 26 minutes, 33 seconds Okay. Uh okay. Got it. I'll maybe take this up with you offline. Uh another question uh on the game production. Just 26:41 26 minutes, 41 seconds wanted some clarity for FI26. You said that uh it was 18% up uh compared to 26:48 26 minutes, 48 seconds last year. It's expected to be 18% up on an overall basis. 26:54 26 minutes, 54 seconds Yeah, that we spoke about the country level, right? 18%. And what about UP? Up we said would be flat. 27:04 27 minutes, 4 seconds Okay, understood. That's it from me. Thank you. Thank you. Thank Thank you. 27:09 27 minutes, 9 seconds Thank you. Before we move to the next question, a reminder to the participants to ask a question, you may press star 27:15 27 minutes, 15 seconds and one. Next question is from the line of Shalesh Kanani from Centrum Broking. Please proceed. 27:23 27 minutes, 23 seconds Uh good afternoon everyone and congratulations on the performance given that it was a low crushing quarter this time around. Uh so my line got dropped 27:31 27 minutes, 31 seconds in between so apologies in case this question has been already answered. uh uh uh one is on our uh PPT we have 27:39 27 minutes, 39 seconds mentioned that the utilization rate of production capacities in bioplastic worldwide is 58%. So that number seems 27:47 27 minutes, 47 seconds to be little bit on the lower side. So can you uh highlight top reasons for the same and how our facility different 27:56 27 minutes, 56 seconds sorry I I didn't understand your question. Could you repeat it please? 28:00 28 minutes Sure. So uh in our PPT we have mentioned that globally bioplastics worldwide capacity utilization is somewhere in the range of 58%. Right. 28:12 28 minutes, 12 seconds Oh okay okay sure. Okay. 28:14 28 minutes, 14 seconds Yeah. So that that obviously looks on the lower side. So uh so what yeah so what are the reasons for that and how 28:22 28 minutes, 22 seconds would our uh facility would be a little bit on the higher side or how we are going to tackle those uh hurdles. 28:29 28 minutes, 29 seconds So uh definitely 58% is uh on the lower side definitely but uh I don't think uh 28:36 28 minutes, 36 seconds okay so it is it is basically coming from China this uh thing it is if we look countrywise uh I don't think this 28:45 28 minutes, 45 seconds figure is like this at all. uh China has one single facility of 300,000 tons which is not able to ramp up capacity is 28:52 28 minutes, 52 seconds what I understand not for want of a market but for want of their own internal technology or whatever those 29:00 29 minutes things so I don't think that this is the way to sort of look at this question uh the market is definitely there globally 29:07 29 minutes, 7 seconds we are barely 1% in bioplastics and PLA would be even like half of that so 5% of global uh uh consumption so That's one 29:16 29 minutes, 16 seconds thing and we don't see this as a challenge arising. In fact, we we get more questions like you know when will you be able to supply us full so that we 29:25 29 minutes, 25 seconds can change over full state governments, central governments, everyone is looking to this and like I was mentioning earlier also. So you know states like 29:34 29 minutes, 34 seconds Kerala and Karnataka are pioneering their own PLA based milk package, water bottles that this is without anything related to Balpur's efforts. So things 29:43 29 minutes, 43 seconds are happening automatically as well. uh and uh they are in that case much more expensive at the end of the day than what we would end up being once we have the domestic production. 29:53 29 minutes, 53 seconds So we only the only question we get asked when will your domestic production start so that we may actually make a strategic shift. Uh this is where we are coming from. 30:03 30 minutes, 3 seconds Fair enough. Uh just one clarification in your opening remarks ma'am you said that we would be 50% utilization within 30:10 30 minutes, 10 seconds the first year. So I assume that is 12 months not that financial year FY27 right? 30:17 30 minutes, 17 seconds No we are hoping 6 months in that 6 months stabilization etc. 30:22 30 minutes, 22 seconds So ramp up to ramp up to maybe total 100% in 6 months is what we want. So we 30:29 30 minutes, 29 seconds are it's too early to say more than let me attempt yeah please let me attempt to answer the way I know 30:38 30 minutes, 38 seconds best that is trait it is something new it is is it something alien to us a lot 30:45 30 minutes, 45 seconds of it is fermentation so it's not so alien our excellence has been lifetime in manufacturing so we are hoping that 30:52 30 minutes, 52 seconds with the best technology partners and you know our watertight contracts we should be able to deliver the quality 30:59 30 minutes, 59 seconds of you know the level the quality of PLA which is desired we should do that I don't doubt that the efforts being put 31:07 31 minutes, 7 seconds into marketing the license or the dialogues with the states and various departments of the center etc and the 31:16 31 minutes, 16 seconds mandates are moving in the right direction so it's it's you know if if I'm an outsider it's a leap of faith on the 31:23 31 minutes, 23 seconds management so trust us and we should perform But it's something new for us also. But it's not you know we a shot in the dark. 31:35 31 minutes, 35 seconds It's a well researched well thought out well planned program. 31:41 31 minutes, 41 seconds Yeah. Uh thanks that's helpful. Uh absolutely we have confidence in the management of Baluru to deliver this. Uh thanks for that Abra. Uh so coming to 31:50 31 minutes, 50 seconds our grain ethanol volumes. Uh this around I think we have done highest in terms of quarterly run rate. Correct. So 31:57 31 minutes, 57 seconds uh and also I believe from the increase in real average realization we have done predominantly through maze. So uh can 32:04 32 minutes, 4 seconds you just kind of uh give some unit economics in terms of how profitability availability and costing is for various 32:11 32 minutes, 11 seconds feed stocks and how maze is looking at the current prices. 32:16 32 minutes, 16 seconds uh Sales going forward also for for the period up to October before the start of the new season we will predominantly do 32:24 32 minutes, 24 seconds G mage based only now to give a profitability indication on the basis of two months of performance is not the 32:31 32 minutes, 31 seconds right thing maybe at the end of next quarter earnings score we will be in a better position to present that the main 32:39 32 minutes, 39 seconds reason why I'm uh saying this it all depends upon the procurement price of mage in the next Yes, right now we procate everything we 32:48 32 minutes, 48 seconds and just to tell you this will never move the needle for Balraur. 32:52 32 minutes, 52 seconds It is it is good because it covers our fixed cost of the distill and gives you some money. So this is a good filler for 32:59 32 minutes, 59 seconds our Meapur unit. Yes, well desired but this is not a you know game changer either way for the company. Am I right? 33:07 33 minutes, 7 seconds Maximum around 5 crores liter on an so if you supply 5 cr then you make 3 crores is 15 crores. Yes is very welcome with the coverage of fixed cost. But 33:16 33 minutes, 16 seconds that's the that's the range basically just just the reason I was asking is that because uh this is the first time 33:24 33 minutes, 24 seconds we have seen those volume so and in the past our commentary always has been what you have highlighted right it is not that a profitable route so I was just 33:32 33 minutes, 32 seconds wondering in case there has been a sharp drop in prices or we have got free stock remunative yeah so I thought I'll just clarify that it was a very brief short uh drop in 33:41 33 minutes, 41 seconds prices but you know as businessmen we decide to procure when the price what we think may be the right price and today 33:48 33 minutes, 48 seconds if we go to buy it's more expensive even if we are able to secure the entire requirement of where do you keep it 33:56 33 minutes, 56 seconds that sell price of due is extremely important yeah that's that's because of so many distilleries that earlier was let's say 34:04 34 minutes, 4 seconds when we began business of this grain our DDGS price for rice was 26 29 34:11 34 minutes, 11 seconds it went up 29 29 so today that is what 1920 17 18 18 and our maze DTGS price is 156 34:20 34 minutes, 20 seconds 15 and and without bag as the energy source it's even worse if coal is your energy source then you're 34:30 34 minutes, 30 seconds yeah fair enough uh thanks thanks for that clarification and just last question from my side u I was little curious I I just wanted to confirm my 34:37 34 minutes, 37 seconds understanding is right or not uh our net recovery numbers for the quarter I know the question is very small and it is 34:44 34 minutes, 44 seconds minus fuel but it was 11.38% versus 11.15% last year right and last year 34:51 34 minutes, 51 seconds diversion was kind of little limited right so is it predominantly because yeah so is this predominantly because our facility in our earlier cause we had 34:59 34 minutes, 59 seconds said has shifted from B to C that the uh net recovery post diversion was on the higher side this time 35:06 35 minutes, 6 seconds no no so any recovery figure we give you is apples to apples so it's reduced to see so for pre- diversion This quarter we 35:14 35 minutes, 14 seconds had 11.57 with 12.18 in the corresponding quarter of last year. Right. 35:22 35 minutes, 22 seconds Okay. Fair enough. Thanks a lot sir and best of luck. Thank you. Thank you. Thank you. 35:31 35 minutes, 31 seconds Next question is from the line of Kishan Parvwani from JM Financial. Please go ahead. 35:37 35 minutes, 37 seconds Yeah. Hi. Hi. Hi. Good afternoon. Uh and thank you for taking my questions. Mhm. 35:43 35 minutes, 43 seconds All good sir are all good. Hope everything's well at your end. 35:48 35 minutes, 48 seconds So couple from my side. First on the long-term debt of PLA uh that you have uh raised 460 crores. It's mentioned in 35:57 35 minutes, 57 seconds the presentation that the repayment of this term loan will begin from 3QFI 29. 36:03 36 minutes, 3 seconds So till that time uh there'll be no interest outflow. Is that correct? and when will the 5% interest payment uh will start? 36:15 36 minutes, 15 seconds So the principal repayment of this start as we mentioned in the PPT but we are paying interest on a monthly basis we 36:24 36 minutes, 24 seconds will get the 5% interest subvention claim from the government of UP after the commencement of our commercial. 36:33 36 minutes, 33 seconds Okay after the commencement. Okay, got it. Um and just a continuation on the same uh what's the projected borrowing 36:41 36 minutes, 41 seconds for FI28 and u and interest outflow once PLA is up and running because I think after you mentioned after the so just 36:48 36 minutes, 48 seconds wanted to understand that so this entire 1650 crores would be borrowed within 36:57 36 minutes, 57 seconds FI27 FI27 maybe 1 1500 crores within FI27 and 37:04 37 minutes, 4 seconds 15200 crores in the first quarter of I28. 37:09 37 minutes, 9 seconds Okay. Fair enough. And um I think Vive G you uh mentioned in your uh opening remarks and probably to uh answer to one 37:18 37 minutes, 18 seconds of the earlier participant as well. Uh did you mention that you expect the PLA plan to run an optimum utilization 37:26 37 minutes, 26 seconds within one to one and a half years of commercialization starting October 26? 37:33 37 minutes, 33 seconds I would be very disappointed if it took me one and a half years or one year. 37:39 37 minutes, 39 seconds Okay. I mean we'd be delighted to see what is the target max 6 months. Okay. 37:45 37 minutes, 45 seconds We have the world's best people. Let let me explain why. We have the world's best people who have supplied globally and who have succeeded globally. Right? 37:56 37 minutes, 56 seconds They are part of our process. There's a watertight contract on their head and plus we fancy ourselves as good uh 38:05 38 minutes, 5 seconds manufacturers with sharp eye on detail having done fermentation business all our life along 38:12 38 minutes, 12 seconds which is the distally part which is a significant portion of this business. So 6 months. 38:20 38 minutes, 20 seconds Okay that's that's a great news sir and we are equally excited uh so that uh you know ramp up that's fast. So 38:28 38 minutes, 28 seconds uh in in that context uh have you kind of internally planned for uh you know a 38:36 38 minutes, 36 seconds phase two where because 6 months and then you know that that gives you a strong visibility for the going uh you 38:44 38 minutes, 44 seconds know coming years as well and also the enough cash flows of the uh capeex that you are already putting in. 38:52 38 minutes, 52 seconds I I our rampur's DNA and personality is we focus on achieving one and then 38:59 38 minutes, 59 seconds looking at the second. I don't to dream so much. I want to achieve and then dream. Having said that there is enough scope left in the plan to expand in this very layout and construction. 39:11 39 minutes, 11 seconds So first when we have planned we plan to go bigger but lay out until until we are able to do that which is definitely the desire. 39:20 39 minutes, 20 seconds So as I said have faith. We do have uh that uh for sure. 39:27 39 minutes, 27 seconds Putting our best foot forward and let me just assure you putting our best foot forward with the best possible people everywhere. 39:36 39 minutes, 36 seconds Okay. Noted sir. and uh given uh you know with your uh expertise uh in 39:43 39 minutes, 43 seconds fermentation and and given you know uh for for the polymerization you'll also get uh lactic acid so uh is there a 39:51 39 minutes, 51 seconds possibility of exploring other chemical compounds uh is a is R&D already looking 39:59 39 minutes, 59 seconds at it or or do you intend to look at uh those possibilities in the future such as like propane glycol etc. 40:07 40 minutes, 7 seconds Look definitely the short answer is yes. 40:11 40 minutes, 11 seconds Uh the R&D team uh you know R&D was a important subject in Praur and today it's the hottest new topic. uh so I 40:19 40 minutes, 19 seconds think we all over a lot of things at first uh we are all over our existing process uh which is to upcoming 40:26 40 minutes, 26 seconds and then all of the possibilities are definitely at uh you know in yeah good R&D team internally external 40:35 40 minutes, 35 seconds consultants we we are on the job great to hear that sir and thank you Aantika for uh pitching in also thank 40:44 40 minutes, 44 seconds you so much and wish you all the best sir thank you thank Thank you. 40:49 40 minutes, 49 seconds Thank you participants. To ask a question, you may press star and one. 41:00 41 minutes As there are no further questions, I would now like to hand the conference over to the management for the closing comments. 41:07 41 minutes, 7 seconds Thank you everyone and I must appreciate uh the line of questions put forward this time by our investors. It delights 41:16 41 minutes, 16 seconds me to hear such pertinent and to the point questions. Thank you very much for your understanding. 41:24 41 minutes, 24 seconds Thank you. Thank you very Thank you very much. 41:28 41 minutes, 28 seconds Thank you sir. On behalf of Bal Rampur Chini Meals Limited that concludes this conference. Thank you all for joining us and you may now disconnect your lines.