Balrampur Chini Mills Ltd., incorporated in the year 1975, is a Mid Cap company (having a market cap of Rs 7271.25 Crore) operating in Sugar sector.
Financials
For the quarter ended 31-03-2021, the company reported a Consolidated Total Income of Rs 1027.25 Crore, down -5.17 % from last quarter Total Income of Rs 1083.29 Crore and down -41.85 % from last year same quarter Total Income of Rs 1766.61 Crore. Company reported net profit after tax of Rs 232.00 Crore in latest quarter.
Investment Rationale
The brokerage is incorporating FY24 numbers given new distillery is likely to get commissioned by November 2022 while its full impact would be felt in FY24E. Though BCML has faced a considerable drop in sugar production this sugar season due to red rot, it believes changing sugarcane variety would help regain lost sugarcane in its catchment area. With increase in distillery capacities & expected increase in sugar prices, it estimates 17.7%earnings CAGR in FY21-24E. It estimates free cash flow above Rs 500 crore every year for next three years, which is likely to increase payout (dividend, buy-backs) to 60%. It values the stock at 14x FY23 earnings with a revised target price of Rs 515 (earlier Rs 385) & maintain BUY rating.
Promoter/FII Holdings
Promoters held 41.10 per cent stake in the company as of March 31, 2020, while FIIs held 22.64 per cent, DIIs 12.75 per cent and public and other 23.51 per cent.
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