Key takeaways of the conference call

• The net revenue of the company for Q1 FY09 increased by 99% at Rs 269.95 crore. The sugar business revenues were up by 148% at Rs 269.23 crore due to higher sales volume and improved realizations. The co-generation revenues at Rs 57.27 crore compared to Rs 27.73 crore on account of increased exportable surplus capacity from 60MW to 80MW while the Ethanol/Chemical revenues were down 60% Y-o-Y at Rs 11.6 crore mainly due to lower volume.

• The net profit for the quarter was significantly up at Rs 13.67 crore, 452% higher Y-o-y mainly due to turnaround in sugar division.

• Reduction in cultivating area for sugarcane is to result in decline in cane supply leading to lower sugar production and firmer sugar prices.

• The management expects sugar production of 17-18 million tonne against earlier estimation of 22 million tonne in the country, due to low cane availability and lower recovery.

• In UP the sugar production would be about 4.5 to 5 million tonne (7.3 million tonne in last sugar season) and in Tamil Nadu the sugar production will dip to 1.8 million tonne against 2.3 million tonne in last season.

• Impact of lower cane availability may result in a planned shut down for Dhampur sugar in February / March 2009. The company expects its sugar unit to run for 120-130 days (capacity utilization to also decline) and co-gen and distillery units to run for maximum of 135-150 days.

• During the quarter the company crushed 1.17 million tonne cane (1.03 million in Q1 FY08) and produced 1 lakh tonne of sugar (0.90 lakh tonne in Q1 FY08). The recovery during the quarter stood at 9.1% against 9.6% in corresponding previous quarter.

• The company expects to crush 2.8 million tonne in this season and at approx. 9% recovery level, the annual sugar production would be about 252,000 tonne of sugar against 361,000 tonne in sugar season 2007-08, thus would be lower by about 30%. So far till date company has crushed 1.55 million tonne of cane.

• The sugar realization during the quarter was about Rs 17.9 per kg. Company was carrying a fair amount of inventory from sugar year 2007-08, which it could sold at higher prices. The company has sold 1.3 lakh tonne of sugar during the quarter (0.60 lakh tonne in corresponding previous quarter) against production of 1 lakh tonne

• The sugar realization has further increased now and current sugar prices are about Rs 21 per kg.

• The company has sold 613.3 lakh units of power during the quarter (38% higher Y-o-Y) at realization of Rs 3 per unit.

• In ethanol /chemical operations the sales volume of chemicals was down by 63% Y-o-Y at 1607 tonne while that for ethanol was down 79% Y-o-Y at 1404 kilo liter. This business faced input cost pressures led by increase in price of raw material without corresponding increase in realizations.

• Out of 270 KLPD distillery capacity the company has about 30 KLPD ethanol supply contracts with Oil companies, which will expire by September 2009.

• The company has net debt of Rs 611 crore at 31^st December 2008. The company is swapping higher cost debts from SDF loans (Sugar Development Fund) @ rate of interest of 4%. SDF Loans of Rs 15.88 crore disbursed out of Rs 95.32 crore already sanctioned by Govt. of India.

• The management expects that the sugar production in the country may go down further in next year.