Financial Information:

Net sales grew by 18% YoY to Rs 412.23 crore for the quarter ended March 2012 driven by the growth across the segments. However, operating margins fell by sharp 930 bps YoY to 17.8% and accordingly there was 22% fall in operating profit to Rs 74.15 crore. But after the sharp 892% growth in other income to Rs 2.62 crore, PBIDT fell by 19% to Rs 76.78 crore. Also the 30% fall in interest cost to Rs 16.81 crore was negated by the 47% rise in depreciation to Rs 24.71 crore. Eventually, PBT fell by 35% YoY to 35.26 crore. Further, after drastic rise in effective tax rate by 3350 bps to 36.7%, PAT fell by sharp 58% YoY to Rs 22.32 crore.

Highlights of the Call:

• Revenues from the Sugar division (63% of sales) grew by 18% YoY to Rs 415.02 crore for the quarter ended March 2012 on the back of higher volumes & better realizations. However, At PBIT level it posted Rs 15.88 crore loss as against Rs 6.53 crore profit in the corresponding previous period. This was due to the higher cost of production on account of higher landed cost of cane.
• The sugar production grew by 9% YoY to 2.30 lac tones in Q4'FY12. Also, the sugar sales grew by 12% to 0.97 lac tones. Further, the free sugar realizations improved by 3% to Rs 29.81 per kg for the same period.

• The total cane crushing by Dhampur for sugar season 2011-12 was higher by 13% to 3.75 MT. The recovery is at 9.23%.

• The inventories were at 1.99 lac tones as on 31^st March 2012. Further, the average cost of inventories is Rs 27.91 per kg combined for sale & levy sugar.
• Revenues from the Power business (27% of sales) grew by moderate 5% to Rs 181.02 crore for the quarter ended March 2012. However, segment margins witnessed sharp 570 bps fall YoY to 31.4% and accordingly segment profit declined by 11% to Rs 56.80 crore.
• It has generated 24.6 crore units of power in Q4'FY12 and out of this Rs 15.4 crore units were supplied to UPPCL. Power realizations were improved 1% to Rs 4.05 per unit for the same period.

• The Company's exportable co-gen capacity is at 85 MW available for the full year. Further, the realization expected to continue above Rs 4.0 per unit in the sugar season.

• The Company will continue with power sales even during the off-season given improved bagasse availability due to higher cane crushed. In case of any shortage of bagasse it will use the bio-fuels to run the plant.
• Revenues from Chemical/Ethanol business grew by 27% to Rs 59.30 crore for the quarter ended March 2012 on the back of higher sales volume combined with enhanced realizations. Also, segment margins expanded by 80 bps YoY to 25.7% and accordingly there was 31% growth in segment profit to Rs 15.27 crore.
• The production of Chemicals grew by sharp 83% to 87.8 lac kg in Q4'FY 12. Also, the sales grew by sharp 71% to 69.9 lac kg for the same period. The average realization for chemicals grew by 10% to Rs 46.64 per kg.
• The Chemical/Ethanol business expected to contribute positively largely led by improvement in volume and realizations from chemicals.
• The production of RS/Ethanol grew by 46% YoY to 126.6 lac bulk litre for the quarter ended March 2012. However, sales witnessed 12% decline to 95.9 bulk litre. The average realizations for the Spirits/Ethanol/ENA stood at Rs 26.68 per KL compared to Rs 26.14 KL in the corresponding previous period.

• The sugar production expected to be 26 MT (as against 23 MT) for 2011-12. Also, the consumption is growing at sustained rate of 3% at~22-23 MT.
• Recently, Government permitted sugar exports under Open General Licensing (OGL) without any quantitative restrictions. This is likely to improve domestic sugar prices on the back of decrease in demand-supply gap. Also, the Indian sugar prices expected to benefit from the exports despite the fall in the international prices on the back of rupee depreciation.
• The domestic sugar prices are at Rs 30 per kg (ex-mill) and expected to be in the range of 30-31 per kg going forward.
• The international sugar prices recently witnessed fall and it expects to be range bound going forward. This was due to the lower production from the Brazil will result in lower surplus.
• The Cane arrears are on the rise in Uttar Pradesh followed by Maharastra on the back of higher cane prices and lower yields.
• The higher sugarcane availability to facilitate increased volumes in ancillary business and expected to reduce volatility and augment earnings. Notably, the stable power prices to further improve earnings from co-gen power segment. Also, in Chemicals, ethanol and RS likely to augment earnings.
• The term debt stood at Rs 522.2 crore as on 31^st March 2012 compared to Rs 516.2 crore as on 31^st December 2011. The current SDF (Sugar Development Fund) loan (Rate of interest 4%) stands at Rs 148.80 crore.