DBOLNSEAugust 02, 2023

Dhampur Bio Organics Limited

5,390words
75turns
6analyst exchanges
3executives
Management on call
Gautam Goel
MANAGING DIRECTOR DHAMPUR BIO ORGANICS LIMITED
Nalin Gupta
CHIEF FINANCIAL OFFICER DHAMPUR BIO ORGANICS LIMITED
Nikhil Saboo
SKP SECURITIES LIMITED
Key numbers — 40 extracted
4.27 million
602,000 metric tons of cane in QI FY'23. Our total cane crush for the sugar season 22-23 stood at 4.27 million tons of cane as compared to 3.97 million tons of cane last year, and overall growth of about 7.4%
3.97 million
Our total cane crush for the sugar season 22-23 stood at 4.27 million tons of cane as compared to 3.97 million tons of cane last year, and overall growth of about 7.4%. During this quarter, we diverted 31,1
7.4%
lion tons of cane as compared to 3.97 million tons of cane last year, and overall growth of about 7.4%. During this quarter, we diverted 31,149 metric tons of cane for syrup-derived alcohol versus 38,
9.62%
across Asia, the Middle East, Africa, and Europe. Our net sugar recovery for the quarter stood at 9.62% in Ql FY'24 compared to 9.23% in Ql FY'23, but the gross recovery for the overall season declined
9.23%
Africa, and Europe. Our net sugar recovery for the quarter stood at 9.62% in Ql FY'24 compared to 9.23% in Ql FY'23, but the gross recovery for the overall season declined by 0.26% as compared to the p
0.26%
Ql FY'24 compared to 9.23% in Ql FY'23, but the gross recovery for the overall season declined by 0.26% as compared to the previous year. We have increased our cane development efforts to reverse this
25.45 million
ful commissioning of a farmer-grade sugar plant. Our ethanol production this quarter increased to 25.45 million liters as compared to 20.95 million liters, and our total sales of ethanol of23.87 million liters
20.95 million
sugar plant. Our ethanol production this quarter increased to 25.45 million liters as compared to 20.95 million liters, and our total sales of ethanol of23.87 million liters out of which 5.22 million liters of
rs,
ethanol production this quarter increased to 25.45 million liters as compared to 20.95 million liters, and our total sales of ethanol of23.87 million liters out of which 5.22 million liters of ethanol wa
23.87 million
sed to 25.45 million liters as compared to 20.95 million liters, and our total sales of ethanol of23.87 million liters out of which 5.22 million liters of ethanol was diverted out of syrup, against 3.96 millio
5.22 million
pared to 20.95 million liters, and our total sales of ethanol of23.87 million liters out of which 5.22 million liters of ethanol was diverted out of syrup, against 3.96 million liters in the same quarter last
3.96 million
.87 million liters out of which 5.22 million liters of ethanol was diverted out of syrup, against 3.96 million liters in the same quarter last year. DB® While ethanol derived out ofB-heavy molasses sold
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Guidance — 20 items
Gautam Goel
opening
“And this will be followed by an update on a financial performance by our CFO.”
Gautam Goel
opening
“Post these expansions, our crushing capacity will be enhanced to 29,500 TCD from the current 22,000 TCD.”
Gautam Goel
opening
“This new distillery is expected to be operational in Q2 FY'26.”
Gautam Goel
opening
“The project shall be partly funded by term loans which are eligible for the 50% interest subvention scheme of the Government ofindia.”
Gautam Goel
opening
“Most of the trade house have factored a 2 million to 3 million tons of sugar exports from India, and in the event of no exports from India, Brazil will be the only origin left to fill the deficit, which has the potential to take the markets to new historical highs.”
Gautam Goel
opening
“A higher risk of drought due to the El Nino has resulted in trade reducing the production forecast by almost 1.5 million tons to 8.2 million tons.”
Nalin Gupta
opening
“We believe steady cash flows and profits from our operations and the opportunity to avail the interest subvention scheme of Government of India will maintain our balance sheet strength.”
Gautam Goel
opening
“It gives me immense pride and satisfaction to inform you that we will be publishing our first sustainability report this year aligned with the Global Reporting Initiative standards.”
Management
qa
“On the first phase, looking at the raw material supply and everything else, we plan to install a 250 KLPD on B.”
Management
qa
“We expect another INR125 crores for completing the residual capex as of today's costing and today's market scenario.”
Risks & concerns — 7 flagged
Domestic prices are firm as a result of lesser production and news of weak monsoons.
— Gautam Goel
A higher risk of drought due to the El Nino has resulted in trade reducing the production forecast by almost 1.5 million tons to 8.2 million tons.
— Gautam Goel
However, there is a downside risk to this estimate.
— Gautam Goel
Sir, if you could give us some color on the impact of the point which you, in your opening remarks mentioned about FCI stopping the rice towards the distillery players.
— Saket Kapoor
So, profitability is going to be difficult to make a comment on right now.
— Management
It is very difficult to quantify at this point of time and maybe some of this information is something which could be a little proprietary in nature and cannot be disclosed at this stage.
— Management
It would be very difficult for me to comment on an individual distillery capacity, but this is the broad outlook.
— Management
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Q&A — 6 exchanges
Q
Hi, good afternoon, couple of comments, congratulations. We are glad you have announced some capex. I think the second ethanol plant was quite necessary to balance the surplus molasses that we have. A couple of questions on that front. One, is that you have mentioned that it's a 250 KLPD. It costs around for INR240 crores, it's expandable by almost 50%. So what would that expansion if you were to undertake cost today? It may be a different number two years out, but I'm just curious?
Management
Hi Nimis, would you like to complete all your questions or would you like me to answer this? Yes, and then just two comments. One is that you continue to give your results early and have a con call which is much appreciated and you have a new format for your presentation which is actually quite nice, Yes. Thank you. Thanks, Nimis, thank you for your kind words as always. So, on our distillery, Nimis we've - as we discussed, we've - environmental clearance is enabling us to do 300 kiloliters per day on dual phase capacity, which as per UP government's policy could enable us to do up to 375 KLPD
Q
Hi sir, thanks for taking my question. So, my question is very basic for my understanding. One, I would like to understand when we say that our cane crushing capacity is at 22,000 tons per day. Is my understanding correct that our annual capacity would be at 80.3 lakh tons and if that is the case our utilization would be at around 50%? Is that the right way to look at it?
Management
So, Parth this is on a the sugar season in North India is to the region of about depending on different places about 180 days plus minus 10 to 15 days. So, 22,000 tons will actually give you about close to 4.4 - 4.5 million tons of cane. Okay, perfect, perfect. That helps a lot. And also similarly on the biofuel segment where our total capacity is at 3,12,000 that would total to around 1,140 Lac BL, is that the right number to look at on full utilization basis? Yes, roughly. It would be about 350 days, but you have to take some amount like we project about a 90%, 95% capacity utilization becau
Q
Yes. Namaskar, sir, and thank you for the opportunity. Firstly sir really thankful for the in-depth presentation that has been provided to the investing and analyst community, and we hope for the continuity of the same. Sir, if you could give us some color on the impact of the point which you, in your opening remarks mentioned about FCI stopping the rice towards the distillery players. So, what kind of disruption will it create in the ENA market and what will be the impact on companies like us who are using molasses as a feedstock? DB®
Management
Thank you, Saket ji. The FCI rice was fundamentally not earmarked for the ENA market, it was your mark for the ethanol program. So, we don't anticipate any disruption on the ENA program, but yes, the market, the broken rice which was available in the free sale market, the prices of those have gone up. So, that will also result in upward movement of the ENA price for the portable segment. Now this FCI sort of restriction that just happened in the last sort of one week. So, the total extent and how it plays out, when the government will keep this restriction in place is very early days right now
Q
Good afternoon, sir. I would like to know, sir, what is our current ethanol capacity that we can sell to the OMCs in the current financial year sir?
Management
So, in terms ofB heavy, our ethanol capacity is 3,12,500 liters per day in this financial year. The expanded capacity will come into play in FY'26 only. So we'll continue with the existing capacity for this year. So, around 11 crores liters of alcohols will be manufactured. Out of that, around 10% would be utilized towards our country liquor manufacturing, rest of that would be more or less supplied in ethanol, fuel-based ethanol. So that country liquor takes care of our levy molasses requirement? More or less, yes. That depends upon, very often UP government has this nasty habit of changing t
Q
Hello. Congratulations for the good set of numbers. I would like to know that why the FCI has suspended the surplus hedge for production of ethanol and would there be any difference if companies produce ethanol from broken rice instead ofFCI? Does this suspension look temporary or does it look in the longer run?
Management
Good afternoon, Adityaji. The FCI suspension, we can't comment right now whether it is temporary, long term, medium-term, that is for the government's wisdom. The broken rice prices have gone up, but you see the ethanol contract prices have been fixed by the OM Cs. As of now, from what we are given to understand, the free sale market, the broken rice price market, the market prices for those have made it unviable for that to be supplied to the OMC against the ethanol program in most of the areas. We are also given to understand the DDGS prices have come down. Now this coupled with higher fuel
Q
Thank you all. Thank you for your participation. And if you have any more questions, please do not hesitate to send us a mail and we'll reply to them promptly. Once again, thank you for taking your time out. Thank you very much. Good day.
Nalin Gupta
Thank you very much. Have a good day.
Speaking time
Management
30
Saket Kapoor
12
Udit Gupta
9
Moderator
8
Parth Kotak
5
Nimis Sheth
4
Gautam Goel
2
Nalin Gupta
2
Aditya Suran
2
Nikhil Saboo
1
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Opening remarks
Nikhil Saboo
Thank you. Good afternoon, ladies and gentlemen. It is my pleasure to welcome you on behalf of Dhampur Bio Organics Limited and SKP Securities to this financial result conference call. We have with us Mr. Gautam Goel, Managing Director and Mr. Nalin Gupta, CFO. We will have the opening remarks from Mr. Gautam Goel and Mr. Nalin Gupta, followed by Q&A session. Thank you, and over to you, Mr. Gautam.
Gautam Goel
Thank you, Nikhil. Good afternoon all. I'd like to welcome everyone to DBO's Q 1 FY'24 earnings conference call. I will start with a synopsis of the company's operations and the industry's prospects. And this will be followed by an update on a financial performance by our CFO. In this quarter, we crushed 550,000 metric tons of cane as against 602,000 metric tons of cane in QI FY'23. Our total cane crush for the sugar season 22-23 stood at 4.27 million tons of cane as compared to 3.97 million tons of cane last year, and overall growth of about 7.4%. During this quarter, we diverted 31,149 metric tons of cane for syrup-derived alcohol versus 38,703 metric tons during the same period last year. And the diversion for the season stood at 591,325 metric tons, as against 192,192 metric tons for the sugar season 21-22. Sugar sales during Ql FY'24 stood at 97,967 tons, which included exports of6,581 tons, as against the sugar sales of98,964 tons in Ql FY'23. I'm pleased to report that we have e
Nalin Gupta
Thank you, Gautam and good afternoon to all of you. I will start with the key highlights of the quarter. Our revenue from operations for the quarter increased from INR495. 7 crores to INR67 6 crores. The key drivers for an increase in revenue are higher sugar realization, ethanol sales volume and revenue for our country liquor segment. Ethanol we sold in this quarter increased from 20.89 million litres in QI FY'23 to 23.86 million litres in Ql FY'24. We sold 593,000 cases of country liquor during this quarter. Profit before tax for Ql FY'24 increased to INR16.78 crores from INR12.4 crores in Ql FY'23. Profit after tax in Ql FY'24 increased to INRl0.95 crores from INR8.79 crores in QI FY'23. In QI FY'24, our sugar segment reported a revenue ofINR455 crores as compared to INR428 crores last year in the same quarter. EBIT in sugar segment stood at INR20.57 crores in QI FY'24 as compared to INR9.3 crores in QI FY'23. Our average sugar realization for Ql FY'24 increased to 37.62 per kg agai
Gautam Goel
Thank you Nalin. Before we move to questions, I would now like to give a brief highlight of our ESG initiatives. We strongly believe that a company should give back to the society and this is articulated in a guiding principle, sustainability and balance and inclusive growth. This principle applies to how we do business and how we interact with and develop our ecosystem. We have been deeply involved in ecological initiatives such as sustainable growing and irrigation, social initiatives such as health camps, schools, higher learning and upscaling, sports, especially squash, include diversity and getting more women into our workforce and employee empowerment programs. It gives me immense pride and satisfaction to inform you that we will be publishing our first sustainability report this year aligned with the Global Reporting Initiative standards. This report will provide an overview of our ESG initiatives and importantly evaluate their impact and performance so we can continue to improv
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