At a Glance
Balrampur Chini Mills Ltd is India’s OG sugar daddy — literally. As one of the largest integrated sugar companies, it mills, distills, and powers through ethanol and co-gen businesses. But after a sugar-high stock rally, can it handle the bitter macro mix of falling sugar prices and ethanol uncertainty?
🍾 1. TL;DR – Is Balrampur Chini Still Juicy?
- Stock is up 35% in 1 year, 18% CAGR over 3 years, and a staggering 35% CAGR over 5 years
- But sales growth? A sorry ~3% CAGR over 5 years
- FY25 Net Profit dipped to ₹437 Cr vs ₹534 Cr last year
- OPM fell from 14% in FY24 to 13% in FY25 – a bit too lean for comfort
- Debt has surged to ₹2,627 Cr in FY25 from ₹2,009 Cr in FY24
- Despite a weak sugar cycle, ethanol still powers part of the story
- Promoters just got a juicy gift: 5.67 Cr shares moved to trusts, raising holding to 28%
📦 2. What Does Balrampur Chini Actually Do?
In One Line:
Sugar, Ethanol, and Power — all in one millennial-friendly ESG-approved combo.
Segments:
| Segment | Contribution | Notes |
|---|---|---|
| Sugar 🧁 | 60-65% | Still the bread and butter (or jaggery and roti?) |
| Ethanol 🚗 | 25-30% | Hero product riding on India’s flex-fuel push |
| Co-gen Power ⚡ | 10% | Sell excess electricity back to the grid — classic PSU move, but private |
Their ethanol capacity has expanded significantly, now over 1,050 KLPD, and likely to hit more depending on sugarcane availability and government whims.
📉 3. The 5-Year Financial Recap — Sweet or Sour?
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 4,812 | 4,846 | 4,666 | 5,594 | 5,415 |
| EBITDA (₹ Cr) | 714 | 707 | 522 | 786 | 704 |
| Net Profit (₹ Cr) | 480 | 465 | 284 | 534 | 437 |
| EPS (₹) | 22.85 | 22.77 | 14.09 | 26.49 | 21.64 |
| ROCE (%) | 17% | 16% | 10% | 13% | 11% |
| ROE (%) | 22% | 22% | 14% | 12% | 12% |
| Dividend Payout % | 11% | 11% | 18% | 11% | 28% |
⚠️ Profit peaked in FY24 — then dropped by ~18% in FY25.
💰 4. The Valuation Section – Is This Sugarcube Overpriced?
- CMP: ₹595
- Market Cap: ₹12,000 Cr
- TTM EPS: ₹21.64
- P/E: ~27.5x
- Book Value: ₹188 → P/B: 3.16x
Historical PE Band:
| Metric | Value |
|---|---|
| 5-Year Median PE | ~14-18x |
| Current PE | 27.5x 😬 |
| Dividend Yield | 0.50% |
So yes… market is pricing it more like a tech stock than a sugar mill. 🍩
🧠 5. What’s Working for Them?
- 🏭 Ethanol Policy Tailwinds: Government’s 20% ethanol blending target = strong demand
- 🔄 Integrated Model: From cane crushing to ethanol to power — full stack
- 📉 Inventory Control: Debtor days at just 10, lean working capital cycle
- 💸 Payout Boost: Jumped to 28% payout in FY25 – investors finally getting mithai
🫠 6. And What’s Not?
- 📉 Sales Growth? Missing. 5-year CAGR of 3% = deadweight
- 🔺 Rising Debt: ₹2,627 Cr now, up 30% YoY – capex or stress?
- 🔥 Volatile Margins: OPM swinging between 8–27% quarter to quarter
- ❓ Interest Capitalization Suspected: Screener hints this isn’t pure PAT
📊 7. Fair Value (FV) Range – Sweet Deal or Sugary Bubble?
Let’s be conservative and value this on normalized earnings:
Case 1 – P/E of 18x on FY25 EPS ₹21.64:
→ ₹389
Case 2 – P/E of 22x (if ethanol continues growth story):
→ ₹476
Case 3 – Aggressive ethanol + sugar cycle bounce, P/E 25x:
→ ₹541
🎯 EduInvesting FV Range: ₹390 – ₹540
CMP ₹595 = Fully Valued to Overpriced
🎁 Bonus: Promoter Restructuring Drama
- Saraogi Trusts got gifted 5.67 Cr shares in June 2025
- Promoter holding now ~28% (total promoter + trust ~42.87%)
- Market liked it = stock rallied 7% in two days
- But no cash exchanged — value shifted, not created
🧂 Final Thoughts: Buy Mithai, Not the Stock?
Balrampur Chini is a classic case of:
“Great integrated business, average capital efficiency, currently expensive.”
If ethanol goes big and sugar prices rebound — this stock could re-rate again.
If not… it’s just another sweet story with a diabetic twist.
✍️ Written by Prashant | 📅 June 21, 2025
Tags: Balrampur Chini, Sugar Stocks, Ethanol India, PSU Power Sellback, Saraogi Trusts, NSE Sugar Rally, India Ethanol Policy, Smallcap Stocks 2025, EduInvesting
