Release Date: August 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Successful commissioning of a new 100 KLPD ethanol-dedicated plant at Svaksha in Kharagpur, increasing total distillery capacity to 700 KLPD.
- Robust maize harvest from Bihar has led to improved margins in the ethanol and ENA production segment.
- Significant progress in establishing a 75 KLPD biodiesel plant at Bathinda, with all necessary statutory clearances in place.
- Total revenue for Q1 FY25 reached INR660 crore, marking a 47.3% increase year-on-year.
- EBITDA for Q1 FY25 was INR57 crore, resulting in an EBITDA margin of 8.48%, up by 36% year-on-year.
Negative Points
- Raw material prices for maize have increased from INR23 per kg to INR25 per kg, impacting cost structures.
- ENA volumes decreased by 40.38% year-on-year, reflecting a significant drop in this segment.
- The company is planning a phased exit from the Edible Oil business, which may lead to transitional challenges.
- Working capital requirements are high, with about INR90 crore to INR100 crore tied up in receivables from OMCs.
- Uncertainty around the timeline for the commissioning of the new biodiesel plant, which might extend beyond the planned April of next calendar year.
Q & A Highlights
Highlights from BCL Industries Ltd (NSE:BCLIND, Financial) Q1 FY25 Earnings Call
Q: Could you please throw some light on the raw material prices in Q1 and the current position in Q2?
A: On average, raw material prices for maize were around INR23 per kg in Q1, which has increased to INR25 per kg in Q2.
Q: When can we expect the biodiesel plant to be operational?
A: We are aiming to commission the biodiesel plant by April of next calendar year, though it might extend by one or two months.
Q: Is there still room for increasing ethanol and ENA volumes?
A: Yes, there is room to increase volumes up to 60,000 KL, although occasional shutdowns for maintenance might affect this.
Q: How do you see the impact of maize prices on margins in Q2?
A: Maize prices are currently elevated due to strong demand from various industries. However, with upcoming harvests in MP and Rajasthan, prices might stabilize.
Q: What is the status of the 150 KLPD ethanol plant expansion?
A: We are in the final stages of obtaining the necessary permissions and expect an update soon.
Q: How will the government's ethanol blending in diesel affect biodiesel demand?
A: It should be an addition rather than a substitution, as both biodiesel and ethanol blending are being promoted to support different sectors.
Q: What are the current maize prices and any plans to allow GM maize?
A: Maize prices are averaging around INR25 per kg. The government is focusing on hybrid seeds and high-yield crops, but GM maize remains a political issue.
Q: What is the CapEx plan for FY25 and how will it be funded?
A: We plan to invest INR140 crore in a 75 KLPD biodiesel plant and a new power plant, with INR90 crore expected to be funded through debt and the rest from internal accruals.
Q: What is the expected revenue and EBITDA margin for the distillery business?
A: We expect a top line of approximately INR1,750 crore from the distillery segment alone, with sustainable margins. The overall EBITDA margin for the company is expected to improve significantly.
Q: What are the plans for the edible oil business and the prime land it occupies?
A: We plan to exit the edible oil business in a phased manner and monetize the prime land, which is around 26 acres, located in the heart of the city.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
