Avadh Sugar & Energy Limited Q4 and FY24 Earnings Conference Call Summary
Key Management Presentations
• Date: May 15, 2024
• Participants: Mr. Devendra Kumar Sharma (Whole-Time Director and COO), Mr. Dilip Patodia (CFO)
Operational and Financial Highlights
• Sugar Mills: Operates four mills in Uttar Pradesh; expanded sugarcane pressing capacity.
• Revenue: Decrease in Q4 revenue due to lower sugar uptake and no exports.
• Full-Year Performance: Increase in EBITDA and PAT, indicating improved operational efficiency.
• Focus Areas: Sustainable growth, debt reduction, and financial flexibility.
Industry Developments
• Sugar Production: Anticipated stable production; need for government support for exports.
• Inventory Levels: Higher levels impacting short-term borrowing.
Production and Sales Metrics
• Sugar Production: 9% increase in Q4 to 33.37 lakh quintals; 18% rise in domestic sales.
• Exports: No exports this quarter; previous year had 7.22 lakh quintals.
• Average Sugar Realization: Increased by 11% to INR 3,776 per quintal.
• Ethanol Production: Rose by 7%, but Q4 sales dropped by 26% due to policy changes.
Challenges and Future Projections
• Sugarcane Crushing: 11% decline due to disease and flooding; varietal changes planned.
• Projected Crushing Levels: Anticipated recovery to 560-570 lakh quintals, dependent on monsoon.
Capital Expenditure Plans
• New Ethanol Plant: INR 151 crores investment to increase capacity from 325 KLPD to 425 KLPD.
• Expected ROCE: 27-28%; operational within 15-18 months post-clearance.
• Distillery Projects:
• Hargaon: Increase capacity from 10,000 to 13,000 TCD, completion by 2025.
• Rosa: Awaiting approval, INR 147 crores investment, operational by FY 2025-26.
Strategic Insights
• Global Inventory Impact: Minimal expected impact from Brazilian floods.
• Ethanol Supply: Supplied 95% of orders; adjusting production based on molasses availability.
• Feedstock Strategy: Balancing molasses and grain usage for flexibility.
Unique Selling Proposition
• Geographical Presence: Strategic positioning in Uttar Pradesh for stable performance.
• Sustainable EBITDA: Targeting maintenance of INR 300 crores under current policies.
• Biogas and CNG Initiatives: Exploring production from sugarcane byproducts; feasibility studies ongoing.
Conclusion
• Engagement: Invitation for further inquiries; appreciation for participant engagement.