Crisil Ratings stated that the ratings continue to reflect the company’s dominant market position in the sugar and allied sectors in north India, which has added diversity to its revenue profile; established relationships with farmers; superior operating efficiency and strong financial risk profile.
These strengths are partially offset by susceptibility to cyclicality in the sugar business and regulatory changes, including movement in the state advised price (SAP) for cane in Uttar Pradesh and minimum selling price (MSP) for sugar or regulations around distillery operations.
The ratings also consider risks associated with the ongoing polylactic acid (PLA) project, which will require sizeable investment and is in early stages.
The business risk profile of BCML continues to be strong driven by diversity in revenue profile and integrated operations.
The financial risk profile remains comfortable supported by steady cash generation and controlled debt levels.
Balrampur Chini Mills is one of the largest integrated sugar manufacturers in India. The company’s operations are forward integrated, into manufacturing ethanol, using molasses (a by-product of sugar), and power, using cogeneration from bagasse.
As of December 2024, the company had reported profit after tax (PAT) of Rs 124 crore (Rs 236 crore a year earlier) on net revenue of Rs 3,912 crore (Rs 4,159 crore).
The scrip slipped 1.52% to currently trade at Rs 440.30 on the BSE.