Balrampur Chini Mills Ltd reported mixed financial results for Q4, with net profit declining 30.4% year-on-year to ₹160 crore from ₹229 crore in the same period last year. According to reports from CNBC TV18, revenue increased 6.7% to ₹1,604 crore compared with ₹1,504 crore in the corresponding quarter of the previous year. However, EBITDA fell 22% to ₹285 crore from ₹365 crore, while EBITDA margin compressed significantly to 18% from 24.3% in the year-ago period. The profit decline was primarily attributed to higher operational costs and potentially lower recovery rates in the sugar segment, which offset the ₹100 crore increase in top-line revenue.
The company announced a ₹3,080 crore investment commitment for FY27 to establish India's first industrial-scale bioplastics (Polylactic Acid) manufacturing facility. As reported by CNBC TV18, this strategic pivot represents a transition from cyclical sugar markets to high-value biopolymers, with the 80,000-ton PLA plant construction confirmed for Q3 FY27 operational start. The investment marks India's first industrial-scale entry into bioplastics, creating a diversification strategy that aims to insulate the balance sheet from sugar cycle volatility. However, recent management discussions reveal significant cost escalations - the PLA project cost has increased by ₹230 crore from the original ₹850 crore estimate, primarily due to currency movements (euro rising from ₹90 to ₹110) and logistics disruptions for imported European machinery. Management noted that ₹50% of this additional cost is eligible for Uttar Pradesh government subsidy, effectively reducing the net incremental outgo to ₹115 crore.
The company faces significant financial challenges with non-current borrowings jumping from ₹489.49 crore to ₹908.25 crore year-on-year, as reported by CNBC TV18. To address these funding pressures, Balrampur Chini Mills has announced plans to raise up to ₹450 crore through a preferential issue of equity shares. The substantial increase in debt and current borrowings of ₹2,261.10 crore could strain future profitability due to higher finance costs and repayment obligations. Recent management discussions reveal additional funding requirements - the company is taking ₹200 crore debt at 6.75% interest rate to support incremental capex, while a ₹650 crore fundraising proposal has been approved to support the PLA project and other initiatives. The transcript indicates minority shareholder sensitivity around approximately 5% dilution from the equity component.
The company attributed margin pressure in the sugar business to an 8% increase in Uttar Pradesh sugarcane prices from ₹370/qtl to ₹400/qtl by the Uttar Pradesh government, as reported by CNBC TV18. According to Chairman and Managing Director Vivek Saraogi, "The sugar segment delivered stable performance during the quarter despite a hike of 8% in sugarcane price y-o-y from ₹370/qtl. to ₹400/qtl. by the Uttar Pradesh government, which led to reduced margins. This was partly offset by higher sugar sales volumes coupled with a marginal increase in realisations." The distillery segment results remained subdued as the government did not increase ethanol procurement price from juice and B-heavy route for three consecutive years. The current profit dip represents a transitionary data point as the company sacrifices current margins to build a futuristic chemical platform.
According to the company's statement, sugarcane crushing in the quarter was 1.6% higher year-on-year at 622.2 lakh quintals. For the entire season, the company crushed 1,043 lakh quintals, which is 5.2% higher than the previous season. Gross sugar recovery before diversion in Q4FY26 was lower by 9 basis points at 11.59%, while gross sugar recovery before diversion for the season was 11.24% compared to 11.28% in the previous season. Shares of Balrampur Chini Mills Ltd ended at ₹537.15, down by ₹3.20, or 0.59%, on the BSE following the results announcement. The revenue growth of ₹100 crore suggests steady volume throughput despite the bottom-line compression.
The company's board approved the re-appointment of Vivek Saraogi as Chairman and Managing Director for a period of five consecutive years beginning April 1, 2027. As reported by CNBC TV18, the re-appointment was approved based on recommendations of the Nomination and Remuneration Committee and the Audit Committee, and remains subject to shareholder approval at the ensuing annual general meeting. The company stated his office will not be liable to retire by rotation. Saraogi's statement emphasized the company's resilience despite margin pressures, highlighting the stable sugar segment performance and the strategic importance of the bioplastics investment in building long-term value.
