Ethanol production drives BCL Industries profitability in Q1; brokerage gives buy call
In an exclusive interview with Zee Business, Kushal Mittal, joint MD of BCL Industries said that the major contribution in the growth came from the subsidiary company Svaksha Distillery. Its plant in Kharagpur achieved good capacity utilization.
Distilleries company BCL Industries' net profit in the first quarter increased by 5 per cent to Rs 18.6 crore on YoY basis. The firm had reported a net profit of Rs 17.8 crore in the corresponding quarter of the previous financial year. The company's total income in the quarter surged by 14.1 per cent on YoY basis to Rs 429 crore while the margin expanded to 9.3 per cent from 7.9 per cent.
In an exclusive interview with Zee Business, Kushal Mittal, joint MD of BCL Industries said that the major contribution in the growth came from the subsidiary company Svaksha Distillery. Its plant in Kharagpur achieved good capacity utilization.
"The existing plant in Bhatinda is already functioning on 100 per cent capacity utilisation. The plant's capacity has now been doubled and it is expected that the topline will improve further. We have successfully commissioned 200 KLPD Ethanol expansion at the Bhatinda facility along with a 10MW Power plant. This takes the plant's distillery capacity to 400 KLPD," he said.
To a question on margin, he said that the distillery sector can see a margin of 15-18 per cent going forward. "The government has made some changes on the policy front for ethanol and the market scenario will become clear in the coming days. The edible oil segment can see an EBITDA margin of 4 per cent," he said.
On the government's push to grain-based ethanol, he said that all the facilities of BCL have maize processing capability and that government should further consider increasing ethanol prices from damaged grain and maize in the future.
Meanwhile, brokerage house InCred Equities has given a buy rating on BCL Industries shares. It said that July saw the commissioning of 200 KLPD ethanol plant and rice straw boiler in Punjab and the same will contribute to profitability going ahead.
"The ethanol segment did well for the company, however, the oil division was a no-go, on expected lines," the brokerage said in its report while giving a buy call for a price target of Rs 790.
Shares of BCL Industries, a part of the Mittal group, have delivered a positive return of 30.91 per cent in the last year and 93.15 per cent in two years. It has delivered a multibagger return of 863.29 per cent in three years.
Incorporated in 1976, BCL Industries is the largest grain-based manufacturer of Extra Neutral Alcohol (ENA) and ethanol in the country. It is engaged in the agro-processing industry for more than four decades.
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