Balrampur Chini Mills Limited reported resilient performance for FY26 despite a significant INR30 per quintal increase in sugarcane prices. The company successfully navigated seasonal challenges, crushing 1,043 lakh quintals of cane. Management highlighted progress on its PLA project, targeting 35% EBITDA margins, and expressed optimism regarding future ethanol pricing revisions to support the blending program amidst a robust 15-month internal expansion timeline for new capital projects.
Financial and Operational Resilience
The company concluded FY26 on a stable note, with the sugar segment showing resilience despite higher input costs. Sugarcane prices rose to INR400 per quintal from INR370, yet the company offset this impact through improved operational efficiencies and a 5.2% increase in crushing volumes compared to the previous year. Gross recovery remained steady at 11.24%.
Strategic Growth in PLA
Balrampur Chini is advancing its integrated value chain with a PLA project backed by a revised capital expenditure of INR3,080 crore. The Board has also approved a new lacto-gypsum processing plant at Kumbhi. Management noted that the company is well-positioned to become a lowest-cost global producer of PLA due to the captive availability of sugar and bagasse, which eliminates significant logistics and energy costs.
Ethanol Blending and Future Outlook
Ethanol remains a key priority, with the company producing 27 crore liters in FY26 and targeting a capacity of up to 35 crore liters. While margins were pressured by the absence of price revisions for the juice and B-heavy routes over the last three years, management indicated that positive discussions with the government have begun. The company maintains a cautious approach to tender participation while monitoring global commodity trends to optimize its production mix.
Market Dynamics and Expansion
The company anticipates its next phase of expansion to be completed within 12 to 18 months, with new commissions expected in the third quarter of 2026. With domestic sugar prices remaining supportive and inventory levels at historical lows, the company is focused on maximizing value extraction and driving long-term stakeholder returns.
Source: BSE
