Release Date: May 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- BCL Industries Ltd (NSE:BCLIND, Financial) successfully commissioned a 100 KLPD ethanol plant at Svaksha Distillery, increasing total capacity to 700 KLPD.
- The company has entered the biodiesel segment and plans to set up a 75 KLPD biodiesel plant in Bathinda, with all necessary clearances obtained.
- BCL Industries Ltd (NSE:BCLIND) reported a 21% year-on-year increase in total revenue, reaching INR2,209 crores for FY24.
- The distillery segment experienced remarkable growth, with ethanol production reaching 129,949 KL and revenue touching INR853 crores.
- The company plans to gradually exit the edible oil business, focusing more on the ethanol and biodiesel markets, which are expected to drive future growth.
Negative Points
- There was a dip in margins due to price inflation in maize and broken rice, impacting the company's profitability.
- The company faced challenges with the sudden stoppage of FDA rice supplies, which affected raw material availability and increased costs.
- Despite the increase in revenue, the EBITDA margin for the fourth quarter stood at 8.5%, which may be considered modest given the overall growth.
- The company is awaiting environmental and statutory clearances for the 150 KLPD ethanol expansion at Bathinda, which could delay further capacity increases.
- The edible oil segment faced global volatility, and the company plans to exit this business, which may involve transitional challenges and potential revenue loss.
Q & A Highlights
Q: You mentioned expecting a bumper crop for maize. When will the plants start receiving the new maize stock?
A: We have already started receiving the crop in both plants. With the bumper crop in Bihar and increased sowing in UP and Punjab, we expect better placement in the current quarter. Prices have cooled down from peak levels and are within MSP.
Q: If maize availability is year-round at MSP, what kind of EBITDA margins can you generate?
A: There will be an improvement in EBITDA margins. Last year, the sudden stop of rice supplies from FCI affected us, but now with increased maize sowing, we expect substantial improvement in the company's performance.
Q: For FY25 and '26, can you guide us on ethanol plus ENA volume numbers and the total salable volume for ENA plus ethanol, plus bioethanol?
A: We can produce 700 KLPD of ethanol and 400 KLPD of ENA. Combined, it will be around 23 crore liters, with 70% ethanol and 30% ENA. For biodiesel, we expect around 2 crore liters per annum starting from FY25-26.
Q: Regarding the Svaksha 100 KLPD, are the numbers included in this Q4 results?
A: No, the plant started mid-April, and stabilization came in the last week. We are now achieving 100% capacity from about two weeks back.
Q: Government plans to form a corporation to procure maize from farmers and supply to ethanol producers. Any update on that?
A: NAFED has been tasked with procuring maize, but our company has strong links in all maize-producing states, making direct procurement more cost-effective for us.
Q: What is the average price of maize for this quarter?
A: The landed cost is around INR23,000 per metric tonne, compared to INR24,200 last quarter. This reduction will help us perform better.
Q: Post elections, do you expect restrictions on damaged crops to be lifted, and will you shift back to FCI crop or stick to maize?
A: We will stick to maize throughout the year due to the government's differential pricing policy and the benefits of forward integration, such as oil extraction from DDGS for biodiesel.
Q: What kind of margins are you expecting from the biodiesel segment?
A: While exact numbers are not available, the margins will be substantial due to the low cost of raw materials, as the finished product of one plant will be the raw material for another.
Q: What CapEx does the company have planned, and how will it be funded?
A: The total CapEx for the biodiesel plant is around INR160 crores, with INR90 crores funded by banks and INR70 crores from internal accruals and existing equipment.
Q: When will the biodiesel segment start contributing to revenue, and what is the peak revenue expected?
A: The biodiesel plant will contribute around INR200 crores in peak revenue. We expect to utilize 60-70% capacity in the first year and 90-100% subsequently.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
