Balrampur Chini Mills Limited (BALRAMCHIN) Earnings Call Transcript & Summary

Good day, and welcome to Balrampur Chini Mills Limited Q2 and H1 FY '24 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Jenny Rose from CDR India. Thank you, and over to you, ma'am. [Technical Difficulty] Ladies and gentlemen, due to a technical difficulty, I will now hand the conference over to Mr. Anoop Poojari. Please go ahead.

Thank you. Good afternoon, everyone, and thank you for joining us on Balrampur Chini Mills' Q2 and H1 FY '24 Results Conference Call. We have with us today Mr. Vivek Saraogi, Managing Director; Ms. Avantika Saraogi, Business Lead; and Mr. Pramod Patwari, Chief Financial Officer of the company. We would like to begin the call with brief opening remarks from the management, following which, we have the forum open for a question-and-answer session. Before we start, I would like to point out that some statements made in today's call may be forward-looking in nature and a disclaimer to this effect has been included in the results presentation shared with you earlier. I would now like to invite Mr. Saraogi to make his opening remarks.

Thank you, Anoop. Good afternoon, everyone, and thank you all for joining us on Balrampur Chini's Q2 and H1 FY '24 Earnings Call. I trust all of you have had the opportunity to go through our results presentation providing details of our operation and financial performance. I will initiate the call with an update on the current developments on the sector, followed by our company's key highlights for the period under review. So I'll begin with production. As based on our latest estimates, India is set to witness a decline of 8% on the gross level, and gross level is expected to reduce from 36.2 million tonnes to 33.7 million tonnes. This is only -- mainly owing to the yield and insufficient rainfall in Maharashtra and Karnataka, thereby leading to a lower yield. However, our company's view on the current season net production is about 29.5 million tonnes -- it's between 29 million tonnes to 30 million tonnes, so we could say 29.5 million tonnes, net of diversion. This would still be ahead of the expected consumption of about 28.5 million tonnes. However, the government has adopted a cautious view because of sugar opening stocks and decided not to allow sugar exports for the time being. This has exerted an upward pressure on the global prices, which have surged to a 12-year high, surpassing $0.28 per pound. Moving on to an update on ethanol. The Indian government remains committed on its ethanol program, which it aims to achieve 20% blending by '25, '26. However, recently, OMCs have observed a decline from the -- observed a decline in the ethanol blend percentage, which was owing to a halt in the FCI rice allotted last year. Looking ahead, central government OMC's anticipated -- they are about to announce the price which we had expected should have come by now. But as per past behavior, the prices are expected to follow the percentage hike in FRP, which is about 3%. On the business front, our company delivered a commendable performance in a seasonally weak quarter. We reported a healthy improvement in volumes and realization across our sugar and distillery divisions that supported our overall performance. Further, our profitability this quarter benefited from higher crushing in the previous season, which spilled over into April and recovery achieved in the previous season. After achieving an impressive 16% growth in crushing during the previous season, our field teams have been actively collaborating with the farmer to plant improved variety, expand area under cane, which would both boost yield and recoveries. We've also worked very hard, and the disease at our end is minimal compared to last year. Avantika will take you through it. That is because of the serious reduction in 238 in our area. As we go into this season, we are hoping, and whatever is to be seen on the ground, for a 10%-plus crushing in the current season over last year. In conclusion, the company is dedicated in generating value for all its stakeholders. Keeping this objective in mind, the company has announced an interim dividend of INR 3 per share. Pramod, last year was INR 2.5, isn't it?

Correct.

So an enhancement of INR 0.50. As we move ahead, we remain committed to harnessing synergies between Sugar and Distillery segments, which have been the key drivers of our sustained success. I will now request Avantika to give you an update on the cane. Avantika?

Thank you, everyone. Just an update on the cane front. As already highlighted by Mr. Saraogi, that we have got an around 10%, 11% increased area under cane. This should result in the concurrent increase in crush. We will reassess post-ratoon crush, but we are quite positive and hopeful. Weather has been kind to us in our part of the world, so we -- the yields are looking good. As expressed as well, the disease is almost mitigated, I would say. There has been a further 20% reduction in 238 as compared to last year and which is -- which has been all replaced by good, high-yielding sugar varieties like 118, [ 15023 ] and 14201. And we expect a higher recovery on this front as well. Another thing which we were able to control and now we are proud to say, that we have almost negligible amount of top borers, which also contributes to a loss in yield and recovery which we have faced over the last years and the whole state has been facing over the last year or 2. This is also negligible in our part. The ratoon management efforts have been commendable. Mobilization efforts by the team have been commendable of re-propping of fallen cane as well, because there was a bout of wind and gust in the month of October which could have impacted our yields. But the mobilization on the ground was superb, and I don't think we will see any losses on this here part as well. That's it. Thank you very much.

Pramod?

So good afternoon, everyone. I hope all of you had the opportunity to go through the results presentation, which has been shared with you as well as uploaded on the stock exchange and company's website. So I would now request the moderator to open the forum for Q&A session. Thank you.

[Operator Instructions] The first question is from the line of Prashant Biyani from Elara Securities.

Sir, given the current situation of cane crop in Maharashtra and Karnataka, plus the stoppage of FCI rice in grain ethanol, but government's firm stance on ethanol blending, how much could be the blending rate this year? And how much of it do you see coming from cane and how much from grain?

Pramod, would you like to take that? Yes, just a minute. Yes.

Government recently came out with a tender quantity of INR 825 crores. We are yet to see the outcome of that tender. We don't -- really don't know how much the participants have participated in that. But whatever internal sense we are getting, we think around 3 million tonnes of diversion of sugar into ethanol is possible even in the -- under the current circumstances. Majority of supply this year is expected to come from grain route. Sugar -- for sugar, we have a limited availability of feedstock.

But however, the current tender, Pramod, points towards a 31 lakh ton diversion already.

Yes.

Right.

Right. Sir, secondly, in Maharashtra cane growing areas, same as Eastern UP, we saw a deficit rainfall. But it has benefited the Eastern UP cane growers as well as mills, but not in the case of Maharashtra and Karnataka. Obviously, there was a timing issue on rainfall. But sir -- I mean Avantika, madam, can explain how did it benefit the Eastern UP growers, but not the Maharashtra ones? Slightly technical, but just for understanding better.

Not a problem at all. Firstly, if we look at total cumulative rainfall, Eastern UP was still around 96%, 97% of usual. So our deficit was probably not as much as Maharashtra to begin with. And secondly, it was very well dispersed and early rains were not there. The problem which we have faced in the last 2 -- not 2 years, but -- not last year, but 2 years before that, when we had the 875 and 888 total crushes. The issue was that the rains came very early, so our cane did not get the time for tillering, and therefore number of millable canes were not formed. This year, we -- this year and even last year, early rains were not there, so there was profuse tillering and we've got more number of millable cane. And that's why we see it's healthy in our areas. Then rightly, even the rains were a bit too delayed and we were fearing. But then the rains came, and they were very well dispersed. I would say 1 week intervals, 1.5-inch, 2-inch rain, 3-inch rain. This is very healthy for a cane crop, and it spread all the way until September. In Maharashtra, it was too little. They didn't have reserve, I guess.

No. So the Ujani Dam, et cetera, it's basically the yield in Maharashtra is bad because of a very, very stunted ratoon crop and scanty rainfall. It East UP, as Avantika said, we did get distributed rainfall. And having been in the business for over almost 4 decades now personally, one can assess the health of the cane once you are able to see the growth which you see at this point in time.

Plus, one big advantage which is there in UP, which Maharashtra is difficult, is that the farmers have irrigation resources.

And we have groundwater at a very lowered table.

Yes. So it's much easier to even revive in the event of less rain.

Right. And just lastly, what would be the most remunerative for you to produce right now between sugar and different types of ethanol?

So I'll attempt to first answer this, Pramod, on the concept, and then would request you to take it up. So you see we -- just assume we are able to crush 12%, 13%, 14% higher than last year. To be able to store that much sugar is going to be tough. So we will get into a game plan, which we have, whereby we've increased our C maybe. So that planning will get debated. So we might increase our C-heavy, improve our sugar production. However, the juice production would continue because that is decently remunerative. And when you have 3, 4, 5 assets running on the ground, you need to be able to distribute your cane. Otherwise, UP will be stranded with too much sugar. So we would distribute our assets based on our assessment of the cash flow and after the prices are announced, which we hope would get announced very soon.

Next question is from the line of Sanjay from DAM Capital.

I have just 2 questions. One is, what is the grain ethanol economics after the price rise which has happened in a few months back? And what would be the proportion of maize in your ethanol feedstock? I just want to understand that.

Right. It's a very good question. So we are -- the grain price announced right now for DFG is pretty remunerative, and we hope to sort of go whole hog on that. So Maizapur's asset, we would hope to utilize much more. So our emphasis will be on rice. We would hope to procure it timely at a very decent remunerative price to give us a very decent return on that, right? Maize would come in as a filler towards the end because maize alone is not a great crop to crush if maize is equated to gain. So maize is not the best thing on earth, so we would put that as a filler.

So will you also change the Maizapur composition from, say, maybe juice to B-heavy or somewhat, I mean, 50%-50% kind of...

With juice fully, it would be decently remunerative. And off-season, which is when the crushing stops and the syrup stops, we would go to rice and add some fillers of maize as the time progresses. Largely rice.

Okay. Okay. And one question on the levy molasses policy, which I think [ you would link ] sort of policy which has come now of 26% on C-heavy and 19% B-heavy. What would be impact for us on that? And is it because of that, we are increasing our C-heavy also?

I don't think there is any favor of any feedstock, C, B, juice. All liabilities are now made equally. So there is no change in that in terms of it's less on C or more on B. [Foreign Language]. That's not the situation.

So is there any impact from last year to this year because of the increase in the levy part?

Yes. Obviously, the last year, the C-heavy reservation was around 20%, which has gone to 26% this year. So as and when we produce ENA, it will automatically get captured in our profit and loss account. So this, we have been doing for so many quarters on a continuous basis. It doesn't change our life. It's, in a particular quarter, the production of ENA becomes higher.

We'll account for it in that time.

We will account for that accordingly in that quarter.

Okay. Understood, sir. And just last on the proportion of 0238 in the '23-'24 season and the new varieties. Just that last one.

So again this is a projected figure, of course. So we expect only 25% of 0238.

In this season, current season.

In the coming crushing year. And where -- the peak was 80%-plus. So you can imagine the downturn. And in the season beyond that, you would see it in single digits.

'24-'25, single digits.

Single digits. And in proportion, the other variety, so 118 has increased by more than half of that, so it will increase by around 11%, 12%. And all the other varieties combined have filled the rest of the 9%. That's all types.

Including 15023.

Yes, yes. We'll get a good -- we'll first then be crushing a sizable quantity of 15023, so we should see the favor of that, but in the latter part of.

In the second half of the season.

Okay. This 25%, you are saying, 0238 for overall Balrampur, or specific company?

The group.

Next question is from the line of Shailesh Kanani from Centrum Broking.

Congratulations for a good set of numbers in a seasonally weak quarter.

Shailesh, your voice is not coming clearly. Can you please speak a little louder? A little louder, please?

Is this better now?

Yes, thank you.

Congratulations for a good set of numbers for the quarter. Sir, my couple of questions. One is with respect to growth front. On growth, just been more than 1 year when we had completed our last CapEx plans on the Distillery front. And I know we are doing a minor CapEx for 2,000 TCD on the sugar front. But any plans for future allocation of expected cash generation? If you can throw some light on that.

So yes, we did speak last year, and we have spoken on all calls. And by the time the CapEx got over last year, it's been, yes, 11 months, 12 months, 10 months, definitely. So the company is now in command of the CapEx internally. By in command, I mean the all capacities which were envisaged that will fulfill efficiencies have been fulfilled. The juice distilleries in Balrampur and Maizapur are online. Hence, now what can I say? We are in discussion, and you will hear very soon as when the Board clears it. But yes, one is actively looking at it in a company -- in the company. Pramod, what else can I add now?

[indiscernible]

Okay. So nothing as such concrete on the drawing board. Is there any scope for -- since we are expanding our command area as well. And so we are banking that availability of cane is on a rise. So is there a scope for further expansion on the Distillery front?

So just let me explain. Our crushing last year was 1,030 lakh quintals. Let's assume we do 1,150 lakh quintals or 1,160 lakh quintals. What can our current distillation and our crushing capacity absorb? The answer is between 12 crores quintals and 12.5 crores quintals, easy. So until we go to that figure, there is no purpose of expanding. You need to sweat your assets more. So when you cross that 12.5 crore quintal crushing mark, which I am very hopeful would happen maybe in a year from now -- after this crushing pressing season, also, that is when one can look at it. Also, the policies will play out till then, one can see the demand/supply situation, et cetera, et cetera. So that is one phase. That one -- we have currently -- we 24/7 look at it. And the distillery expansion, et cetera, whatever is required, is not such a tough job once the basic machinery and permissions are in place. On the second front, you people know the act better than I do, the law better than I do. As and when the Board says something, only then can we come to the exchanges or anybody else.

Fair enough, sir. That's helpful. Sir, second question is with respect to SAP price. What are our expectations, means any indication? Because I think crushing thus far has started and there is no indication on SAP price. So can you guide us with this? Any idea on that?

So let me -- right. I will take you through all the variables which might be sort of creating any anxiety or hope in people's minds. So SAP should be announced hopefully by the end of the month. So right now, there's festivals and all that. So I don't know, it can make it 5, 7, 10 days more. What is the hope is impossible to answer. But yes, I only know that our honorable CM is a man of great understanding and grassroot knowledge. I'll just remind everybody, not that I'm expecting a 0 rise, nobody is. In 2019, UP did not raise cane price in the season which was going into the next election. So if I rewind 5 years from now, FRP was raised, SAP was not raised. So this is just to give you a flavor of the human being who's at the helm of affairs. So his understanding, his ability, we trust. And we hope he will take a rationale decision. So I'm not worried-worried. But yes, there will be an increase. I don't think the increase will be very, very alarming. So that is one side. The ethanol prices have yet to be announced. They would be announced in the next 10, 12 days, Pramod, after Diwali? That's the hope.

[ In 10 days. ]

So they will be looking at a method where they would ask more from grain. Hopefully, grain parts would surprise on the upside. The sugar part, they are very clear, you must first make at least 290 lakh tonnes net. Being responsible citizens, as businessmen, we also agree with that. So therefore, the attempt should be once you get clarity on that, government keeps on giving tenders, monthly basis. And any time anything happens, we've seen incentives come in, et cetera, et cetera. So government will take a practical view. Ethanol price would increase -- that is to the best of my ability. You can't hold me to it. I can only tell you what I know and what I think, that prices will increase on the ethanol front on all three feeds, C, B and juice. How much they increase? The average minimum should be not less than 3%, Pramod, that is [ most of all ]. The rest is to be seen. So that is one. The production we are talking of the tender fill till now, Pramod has told you, 31 lakh tonnes is the diversion, which is evident from the tenders filled till now. Now has everybody filled the tender? To my mind, maybe no. Why? The price has not been announced. So we feel that even when the prices come, they would give a revised window or an enhanced window to change your quantity. So that is when you will get to know the full sort of quantity. Next, as you progress and after 15 to 20 days from now, all over India, we will understand the yield of the ratoon crop in UP, Maharashtra and Karnataka. That is when you will be able to get the first flavor of 50% of the season. I'm hoping half-and-half in ratoon, just approximation. So you will get an ability to predict the first half of the season. Thereafter, when January end comes, you will get some ability to predict the second half. Yes, the view is bearish on production. The view for '24-'25 is even -- wait. So we are in '23-'24 right now. View for '24-'25 is even bearish both for Maharashtra and Karnataka. So our sugar economics should stay in place. But the government and the industry, having put up assets, need to allocate resources to all assets. Now I am not talking like a sort of CSR human being, I'm talking as a businessman. Basically, if we produce too much sugar, we'll have problems selling it. I'm going to produce my -- Balrampur will produce it's lifetime highest sugar, probably, Pramod, right? Lifetime-highest crushing?

Previous high was 1,095 lakh quintals.

1,095 lakh quintals. So we're looking to cross that. And therefore, resources will be allocated to the best of our ability. I think by the time the final prices come and our tender goes, I think one will get to know what we've done. So I try to cover the entire spectrum and hopefully I've been successful.

That was quite useful. Just one last query. We had contracted certain quantity for ethanol last year. And obviously, because of the FCI embargo, we were not able to completely fulfill that. So any update on that, if you can highlight on it?

Penalty on that? What is the question?

Yes, yes. Since there was a contract and it was a shortfall from our end, do not...

All over India, this has happened. Not our mill. Balrampur Industry is in the same boat. Having said that, we've represented and my hope is there will be no penalty because there was a counter obligation on the government to give me FCI rice. The counter obligation, having not been completed, our obligation I don't think will call for penalties.

The next question is from the line of Rajesh Majumdar room B&K Securities.

Yes, sir. Just 2 questions. One is the inventory valuation of...

Rajesh, your audio is not coming clearly.

Yes, am I audible now?

Yes, Rajesh.

Sir, your voice is coming muffled. Can you please speak through the handset?

One second, one second. Yes. Am I audible now?

Yes, yes. Thank you.

Yes. So sir, I have just 2 questions. One is on the inventory valuation of sugar. It is showing INR 37.60, which seems to be very high. I mean, how does this increase so much this quarter? Any particular reason?

So this is on the basis of accounting standard provision, cost of market price, whichever is high. And if you see our cost for the 6-month period ended was INR 41.69. So against INR 41.69, we valued at INR 37.60. Just to give you some perspective, in the last year also H1 '23, the cost of production till September was INR 76.00, but the inventory was valued at around INR 35.00. Ultimately, the INR 76.00 got cracked to a level of around INR 33.00 by the year-end when the production kicks in.

So there will be a sharp fall once the production kicks in. That's fine. But I have not seen this kind of an increase in the last 2, 3 -- 3, 4 years in terms of onetime jump in the valuation. So that's why I was wondering, anything in particular?

So the market price of sugar on the reporting date is much higher in comparison to the last 2 years.

So it's cost of market, whichever is higher. So if this year, the price of market is higher, you got to the cost. Let's assume the cost last year was INR 40, and your market was INR 36 or INR 35, you value at INR 35, no? This year, the cost is INR 37, market is INR 40, so it comes at INR 37. Hence, if you saw last year, INR 35, which is because of this factor. Correct, Pramod?

So this year, cost is in INR 41.00. Average cost of valuation is INR 37.60.

That's helpful. And secondly, sir, I see a sharp jump in the power realization in this quarter. Now I know you've given a qualifier that you started supplying power to open market in one of the units. So is this likely to be a strength going forward?

Yes. One of our units have already exited the PPA, and you can see there is a positive effect. There's another one which is exited that will start selling power from December. So we would have 2 units which have exited PPA and have gone into the open market. And the pricing is definitely on INR 1-plus accretive. We also -- the tariff revision is coming up in 2024. And seeing the demand/supply position of power, one is looking -- I'm positively inclined towards that revision, too.

Right. And sir, my last question is what is the remunerative price of juice for you to consider a further expansion?

Juice. Pramod?

So before considering that, we need to have a visibility on availability of feedstock. This was explained in great detail few minutes ago, that this year, we are expecting to crush around 11.5 crores quintal of cane; and probably in a year's time, we will touch 12 crores quintal, 12.5 crores quintal. Till that time, our distillation capacities are fully utilized.

He is, I think, asking what will...

[indiscernible]

I think -- what we have given to the government is INR 72.

What we have represented to the government to make a onetime adjustment of around -- raised the price to around INR 71 per liter. That was prior to announcement of this FRP.

So if you take 3%, add to this. So our paper to the government, which is based on our study by professionals, is to attract fresh capital towards distillation from juice, should be INR 73-plus. Is that your question?

Yes, sir. So if it is just a 3% hike, that's about INR 2. So that's not remunerative yet. Is that the right way to look at it?

Not to attract fresh capital.

The next question is from the line of Krutika Vispute from Tata PMS.

My questions have been answered.

Next question is from line of [ Dhvaneet Savla from Savla Family Office. ]

Hello, sir. First of all, congratulations on a good set of numbers. I have 2 questions. Firstly, it is my thought process that what we should be looking at the numbers from a year-on-year basis rather than a quarter-on-quarter basis. So based on that, this yearly expectation, how much incremental revenue and profitability are we looking at from each of our businesses? And if you could give us a kind of a guidance for all 3 businesses separately. And secondly, my other question with regards to the treatment of B-heavy and C-heavy molasses. Recently, the UP government has asked to treat B-heavy and C-heavy molasses in the same way, and the levy on that was supposed to be parallel. Is there any comment on that?

Pramod, we have explained three times. Pramod, attempt fourth time.

So as far as the guidance is concerned, we don't believe in giving...

We don't give guidance.

We don't give revenue guidance and the profitability guidance.

Yes. And we haven't given in the past, so it's not proper.

It's not proper. Your next question was with respect to...

Liability, etc.

So last year is a history now. The government has come with a fresh policy where there is no preference between any of the feedstock. All are at par in terms of 26% of reservation.

And liability, ENA will...

Yes. And we are in the business of making ENA and supplying the country liquor in lieu of our obligation. As and when we produce ENA, that automatically gets captured in our profit and loss account because ENA fetches a lower realization.

So just a follow-up on that. Is there any personal preference for us to produce ENA from one particular kind of feedstock, be it cane or B-heavy or C-heavy? Or that depends from season to season?

This is a good question. Our preference is always to produce from C-heavy.

Any particular reason for that, sir? Or it is just...

The economics plays out better that way. And even for years in the past, we've produced 95% from C-heavy.

Absolutely.

The next follow-up question is from the line of Prashant Biyani from Elara Securities.

Yes. Sir, have you made any ethanol from open market purchase of any grain in Q2?

Yes, we did a bit of maize and a bit of rice. Pramod will just tell you.

[indiscernible] reductions from grain in H1, in quarter 2...

I think he's asking about the second half, isn't it?

Yes, sir.

1.53 crore liter ethanol production out of rice.

In the second half.

In the second quarter.

In the quarter under question.

Yes.

And this is all from open market purchase?

All from open market.

There were some part of it also. Open market, I think we bought about 4,000 tonnes of rice and about 3,000 tonnes of maize. Open market, we had bought 4,000 tonnes of rice approximately and 3,000 tonnes of grain.

Sir, what would be your blended grain ethanol realization for Q2?

I think that has been given in the presentation.

No, sir, it is not. Just blended grain. It's not...

Blended alcohol was around INR 58.

Okay. We'll get back to you. We'll get back to you.

So average blended realization, including ENA and everything for second quarter, was INR 57.19.

But he is only asking for the grain portion.

You are asking only about grain?

Only, not B, not C, grain. Grain. We'll come back to you.

[Operator Instructions]

INR 58.5.

Grain, FCI was INR 58.5 now.

INR 58.5 being the FCI right now.

Right. But Pramod, the [Foreign Language]. Sorry, sorry.

Yes, that is in October.

So till September, it was INR 58.5.

The next question is from the line of Marshall, an individual investor.

Regarding this molasses policy of UP government, what we understood was that, from 20th of April 2023, this is B-heavy molasses, which is supposed to be sent like previously 73% of 20% of C, also has to be -- was equated to give levy at the same 20%. And companies able to take a hit because the valuation of B-heavy molasses was only about INR 1,000, INR 1,100, but it was supposed to be sold at INR 200 or whatever the levy. So on this account, what was the -- like this is, you can say, loss booked in our P&L during this September quarter, number one? And then whether this notification of UP government of this policy has been done away, and like is no more applicable for the current molasses year starting from 1st November.

So if you see our numbers, in the last year also, we diverted almost 23% to 24% of our cane under C route to produce ethanol. That largely takes care of our ENA obligation. As we have said in the past also, as and when we produce ENA, the losses on account of that automatically gets captured. And if you see our numbers in the quarter gone by, production out of ENA was around 1.6 crores liter in the quarter. To that extent, there will be an automatic adjustment.

No. So if you don't mind, can you just give a little bit explanation on this policy itself? That like if you produce more than 20% of your -- from C molasses, then you don't have to sell at levy? Or how does it work?

Let me attempt to answer. This is not such an important question, but we are facing it 10 times, I'll answer it. So 0.73 is the ratio which you said -- no, or 73%. So if you take 26% C and multiply that by 0.73%, you get to 19%. So that is how the liability would be calculated. What the figure will come to is what we will produce and give to the government for Balrampur, correct? Last year's policy expires on 1st in November. This is the new policy, correct? So in last year, we have supplied ENA, we've accounted. This year, we'll supply ENA, we'll account. When we produce, it will be produced during the season. And it will be produced -- you store the C molasses, run your distillery also. Their liability has to be met in 12 months. We produce, store. Whenever we produce -- Pramod, produce till liability book, or cut your supply there?

Produce, produce.

So the moment we produce, we book it. What you see in the accounts is the blended realization. The blended realization is lowered or truncated downwards by steep prices. So when you see the blended realization is accounted during the quarter. So my -- therefore, Balrampur's liability is determined because we don't do supply molasses. That is a losing business compared to ENA. So we convert the levy molasses into ENA and supply equivalent quantity. Now that is booked in the manner I've explained. Am I clear now?

Yes. No. So this is a bit clear. Maybe I'll just take it offline also. So this is like -- like this notification is still valid? Or they have withdrawn from the current amount of molasses here from November '23?

From 1st November, they have announced this new policy. So when a new policy comes, the old is finished, no?

So in the new policy, what is the treatment for this particular -- regarding B-heavy molasses?

Please take it offline. I'll explain to you.

Your good name, sir? I will just come back to you.

No. You can go to our CFO, Pramod Patwari.

The next question is from Nitin Awasthi from InCred Equities.

I had just one question around the molasses policy, but it's been asked 100 times right now and I know that you have been very annoyed by it. I have a very specific question, don't want to go around the policy and what and why and how. If that can be answered, it'd be very nice. Just the -- in absolute terms, we had a policy last year. The government increased that through a notification which is not available in the public domain, through various routes. And you specifically supplied to the government via the ENA route. So was the absolute quantity increased for the ENA route also? And if so, has that already been booked? That's all.

So let me explain, I'm not -- I'm sorry if I sounded agitated. My apologies. Be very clear on 2 things. Balrampur will account for what is to be accounted. You get the cleanest balance sheet in the country, in my view. So we take pride in our accounting. So don't worry. Two, let me explain again. So last year, B was accounted for at 20%, right? In some way, that is a bit of an improvement from that. C was accounted for at 21% to 26%. So probably that's an improvement. B also, there were some ratios which were put into place which were erroneous. So to some extent, technically, this policy might be more practical than the last policy. It is a big drag, yes. So we have accounted for all our ENA to be given, which is not accounted for will get accounted for during production, and that will get booked in that manner, correct? So there should not be any feeling of that the liability is not accounted for. It gets accounted for during -- via production. Right, Pramod? Have I been able to explain?

Correct. Correct.

Yes, have I been peacefully able to explain now?

Yes, sir, you have.

Yes, so there's nothing to worry. I'm feeling a sense of worry in the investor, of my shareholders, my precious shareholders. There's nothing to worry, guys. And all policies will get challenged, we'll do our legal bid. What happens? That, one can't guarantee.

Thank you very much. Ladies and gentlemen, I will now hand the conference over to the management for closing comments.

Thank you very much. I hope we have been able to answer all your questions satisfactorily. Should you need any further clarification or would like to know more about the company, please feel free to contact us.

Thank you, everyone.

Thank you.

Thank you very much. On behalf of Balrampur Chini Mills Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.