BCL Industries Limited (524332) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the BCL Industries Limited Q4 FY '21 Earnings Conference Call. [Operator Instructions] I now hand the conference over to Mr. Mahavir Jain from Aditya Birla Money. Thank you, and over to you, sir.

Hi. Good morning, everyone. We welcome you to Q4 FY '21 Earnings Conference Call for BCL Industries. On the call, we have with us Mr. Kushal Mittal, Joint MD of BCL Industries; and Mr. Pankaj Jhunjhunwala, Director of Svaksha Distillery. To start with the call, we will have a brief update from Mr. Kushal on the results, after which we will open the floor for questions-and-answer session. Over to you, sir.

Thank you for the introduction, and thank you all for joining us. Good morning, and welcome to the earnings call for quarter 4 and year ending of the financial year 2021. Firstly, let me start by saying that I hope everyone is keeping safe and well. For the ones who are participating for the first time, let me give you a brief background about the company. BCL Industries Limited is a diversified business house in manufacturing and development with business interest spread across a variety of industry verticals, namely, edible oil and vanaspati, distillery and real estate. The company started off in 1976 with a solvent extraction plant of 40 tonnes per day extracting oil from rice bran. Over the years, the company has grown to become one of the largest fully vertically integrated edible oil manufacturers in all of North India, having a total capacity of 1,020 metric tons per day. Furthermore, we forayed into the business of distillation by setting up our own grain-based distillery accessory of extra neutral alcohol of 100 KLPD, along with a bottling plant in Bhatinda. The capacity of the same was later doubled to 200 KLPD as the business grew. In order to further grow our distillation business, the company is now installing a state-of-the-art distillery of 200 KLPD with a 10-megawatt co-generation power plant in Kharagpur, West Bengal. And you are well aware of the impact due to resurgence of COVID-19, our top priority at this moment is the safety and wellbeing of our employees, customers, vendors and all stakeholders. We have implemented various preventive measures in line with the guidelines issued by the government health care departments to ensure that safety comes first. Now to go on about our financial highlights for the fourth quarter ended of financial year 2021, the total income of the quarter was at INR 431 crores with an increase of 91% year-on-year. EBITDA for the quarter was at INR 27 crores with an increase of 98% year-on-year. And EBITDA margins were at 6.31%. Net profit was at INR 13 crores, which has increased by a staggering 280% year-on-year, and PAT margin were reported at 3.08%. For the full year of financial ending 2021, total income was at INR 1,436 crores, which was an increase of 55% year-on-year. EBITDA stood at INR 86 crores, which was a 37% increase year-on-year and EBITDA margin at 6.43%. PAT for year was at INR 42 crores, which was a 63% increase year-on-year and PAT margins were almost 3%. Coming on to the operational highlights for the financial year. I would like to start with the Distillery segment. BCL Industries Limited continues to be one of the largest suppliers of grain-based ethanol in the nation with tender to supply 4.5 crore liters for the sugar year 2020-'21. Since we're also experiencing great demand for ethanol, BCL has continued to supply our standard quantity during the second wave of COVID-19 as well without any hindrance. With the target set by the government to 20% ethanol by 2023, the company forecasts greater quantity of ethanol being tendered by all distilleries, resulting in greater margins for ENA moving forward. The stable work for the new-state-of-art distillery is ongoing, but due to the continuous lockdowns in the states like West Bengal and Maharashtra, where a lot of the machine suppliers are, the cyclonic conditions in Bengal and do the oxygen shortage and bit of labor trouble, the project is experiencing some delays, but we're slowly and steadily moving forward to ensure that the project comes into commissioning for the second half of the current financial year. The revenue of Distillery segment stood at INR 467 crores for the year. With regard to the Edible Oil segment, the company has experienced an exponential increase in its revenue from the edible oil due to an increase in demand for the company's own brands and the increase in edible oil prices globally. The company has received positive feedback from distributors for its homogenous brand, and we expect to build on this positive momentum in the coming quarters as well. Due to an increase in the edible oil prices globally, farmers in India were able to get a very remunerative price for their oilseed preservation as in the mustard seed that just came into the market, which has led to an increase in availability of oilseeds. This has made even more oilseeds available for processing, which is our company's expertise, leading to an increase in revenues and profitability in the segment. The revenue of the Edible Oil segment for the full year were at INR 979 crores. Lastly, the real estate segment went through a temporary slowdown for the lockdown period, but the company expects the sales to pick up in the coming quarters. This year, the company recorded a revenue of around INR 22 crores. In its attempt to reduce the financial burden of the company, BCL continues to utilize the revenues from Real Estate to liquidate debt. With that, I would now like to open the floor for questions.

[Operator Instructions] The first question is from the line of [ Dipesh Karia ] from [ Manya Finance ].

Am I audible?

Yes. You're audible.

First of all, congratulations on an excellent set of numbers. And from the entire investor community, I would like to thank and show my gratitude towards the management of giving INR 5 dividend to the public shareholders, an excellent move, and it will increase our competence [ in the first quarter ]. Now just wanted to ask about the increase in the capacity at Bhatinda. What is the CapEx -- approximately CapEx we are planning? And how much is the loan we are taking? And what is the cost of capital?

Yes. Firstly, thank you for your positive remarks. So for the Bhatinda expansion, the project cost for the same will be around INR 150 crores to set up a new 200-KLPD biofuel plant in the same premises. Out of that, our file has been approved for the interest subvention scheme for funding of INR 120 crores. So we have applied for the same as a couple of banks. And we expect positive results very soon because the government is very encouraging in this matter. And we have to give in biweekly updates, too asking about how we are going to raise the finances. And we've gotten very positive responses from the banks as well regarding the project.

Okay. And what is the subvention approximate?

So that is 6% or half of your finance cost, whichever is higher.

Whichever is higher. So we can expect that we would get this loan at around 3% net?

Whichever is lower, whichever is lower.

Whichever is lower. Okay, okay. So approximately 4.5%, 5%, we should get this done, right?

Yes, yes.

And are we using this entire -- or what are you planning to do? Are we using this entire capacity for ethanol? Or are we going to use it for ENA also?

Just ethanol.

Just ethanol. And what is the approximate realization we are expecting?

See, the approximate realization, that depends on the ethanol prices set by the government in the coming 2 years. So it's really hard to comment on that as of now.

All right. Right now, the ethanol prices are somewhere around INR 51, INR 52, right?

INR 51 [ to INR 55 ].

Okay. Why is there a difference between ethanol prices a lot of sugar companies get and what we get?

See, that depends on the cost of production and the raw material costs. So there is a formula that is used, and I don't think I'm the right person to comment on the sugar prices. So this I would follow up...

I understand. is there a difference between the ethanol what we produce -- the quality of ethanol, which we produce and what the sugar companies produce?

No. The quality is same.

The quality is same. Okay. So it will be more helpful for the government to buy it from us than sugar companies?

Yes, it will but we also have to support the sugar industry, so that's why. But for the future, the government is focusing more on grain. So currently, the grain industry is supplying close to 40 crore liters of ethanol in 1 year. And the government wants to take this to 400, and whereas they want to keep the ethanol coming from sugar around the same. So there's a big focus on ethanol coming from damaged grains from the government side.

I also read in your press release that we are the biggest manufacturers in ethanol right now.

Yes, so we are. Been the largest for the last 2 years as well.

Is there any other competitive capacity coming around India at the same time? I mean around 1 year ago?

There are people expanding, but I don't want to comment on that. I would rather just speak about my company.

[Operator Instructions] The next question is from the line of Giriraj Daga from KM Visaria Family Trust.

A couple of questions from my side. So first, a clarification. If I come to Slide 9 of the presentation where you had mentioned the volume and the realized revenue from the Distillery segment, what I want to understand is that when I calculate the realization of ENA, that has fallen from INR 55 to INR 41, while the ethanol realization has gone up from the INR 43 to INR 50. So can you just explain this a bit of analogy, like why this is moving like this?

So you're saying -- so ENA prices have softened in the past year. I don't know where you're getting the INR 41 from, but -- so they were around INR 55 to INR 57 a year ago -- or in the last financial year before this. And they have come down to around INR 48, and that's due to the raw material prices coming down in the past 2 years. I'm not...

We had mentioned about INR 117 crores of revenue from ENA in this FY '21 against our volume is 28,634 kl.

Just a second. You're talking about the...

I'm talking about INR 116.9 crores of revenue against 28,634 kiloliter of revenue -- volume.

Okay. Right. There seems to be -- I'll have to recheck this figure, but be..

Just to add to it, primarily the prices of ENA has been down in the last 1 year because the demand has also been less in form of consumption, I would say, because of the various lockdowns, which has happened. And that is the reason the company has focused to continue with ethanol.

Okay. So given a choice, can we dive at 100% to ethanol? Is there possibility now we have some long-term contracts where we'll still be fulfilling that ENA requirement?

So it's not about contracts. That's actually designed in such a way that currently we cannot divert more than 60% of our quantity to ethanol. And we also want to keep it this way. We don't want to divert our entire quantity to ethanol on such a short notice because we don't want to lose our ENA customers and who come to us because they get a constant supply of good quality ENA. We don't want to lose them firstly. And secondly, the cost of production of ENA is slightly lower than ethanol. So we don't want to make that switch completely.

Okay. So this looks this year, ENA and ethanol looks optically at 28,634 kl of ENA and 400 -- almost 40,000 kiloliter of ethanol.

Yes. Around 4 crore liters of ethanol.

Okay. So my question -- next question is what is the FY '22 target in terms of volume? So how much ENA and ethanol, combined, what we are targeting compared to FY '21?

Total quantity will not change. It will stay around -- will be around 7 crore liters or slightly lower of both ENA and ethanol produced. So for this year, we're targeting 4.5 crore liters of ethanol and the rest of ENA.

Okay, okay. But sir, you mentioned the sugar here also. So this would be running from December to November. But that would be broadly the same target for FY '22 also?

To FY '22, you mean up until 31st March, right?

March 20, yes.

There's about 4 months. So we'll probably tender around the same amount of quantity next year also depending on the prices. It's hard to predict now. It should stay around that.

Okay. And we'll get benefit from our West Bengal unit?

So Pankaj, you can speak on that.

Yes. Definitely, we are going to have a benefit from the West Bengal unit for 2 reasons primarily. One, West Bengal is in an ENA-deficit state and there is an import duty, which is being levied by the West Bengal government for the bottling plant inside the state that when they're importing, they have to pay about [ 3 centiliter more ]. So we are going to have locational advantage with respect to the same. So that is going to increase the margin by a good percentage. And second, of course, West Bengal is also going to open up our gate for the Northeastern India, where we can supply to the bottlers. At this moment, we have not really decided that we'll go for a complete ENA in-house, but the plant has been devised in such a way that we can produce even 200 KLPD in-house completely. But the final decision is yet to be taken.

No. I was looking to when we'll start this commissioning initiative as of now.

That should be done within this financial year positively. We were targeting December. And of course, because, of course, the second wave of COVID, and as Kushal said, because of continuous cyclone and weather movement out here, there has been a bit of delay. But the plant is in the full swing. I would say more than 60% of the work has already been completed. And barring the monsoon, which are going to be at peak for the next 2 months, we definitely hope by December we should be able to commence production at the plant.

So will we get 1 quarter of production? Or is it a bit more like a ramp-up rate and we could only begin from FY '23?

I believe we get 1 quarter of production comfortably. I positively feel that.

Okay. And my second question is around -- like next side of question is on this other segment, which is oil. So this year, we saw good revenue ramp-up while also the EBIT margin saw some decline. So it should be fair to assume that we are working on an EBIT per kg rather than the percentage margin. And if that is the case, like what kind of EBIT growth we are assuming in vanaspati segment for FY '22?

See, for this Edible Oil segment, to explain the segment, let me first start by saying that our company has various segments within this edible oil. So we also have an oil mill, a solvent extraction unit and a refinery. So the EBITDA margins improved slightly when the company is able to utilize each and every segment of the industry, which means when we have edible oilseeds, 2 process. So for that, there is some value addition in the oil mill. There's some further value addition in the solvent extraction unit and there is some further value addition in the refinery business -- in the refinery segment of the industries. And that's where our company's expertise is. Since India is going back to the AtmaNirbhar Bharat move when it comes to edible oilseeds and the government is pushing towards cultivation of edible oilseeds and the farmers have been getting a good price, we saw a bumper crop of mustard coming to this quarter. And that, I would say, has led to some increase in the EBITDA margin for the quarter that was just passed. And we expect the EBITDA margins to stay around that, might improve a little, but not by too much. And it just all depends on how much edible oilseeds are available for processing in the coming year.

Okay. So like can we do -- say we're able to do INR 29 crores. So can [ we ignore ] the 20%, 25% growth possible since you're guiding earlier also, this kind of revenue growth possible in our Edible Oil segment. So can EBIT also move by 20%, 25% next year or it can be higher also?

We're hoping for a 20% growth, we expect a 20% growth. I don't think it will be much higher than that.

The next question is from the line of Rakesh Laroia from Old Pine Advisors.

Am I audible?

Yes.

Sir, I have a very simple question. Like in the new plant in West Bengal, so are we getting that 5% extra benefit in the terms of...

Yes, you can say that. I will not say exactly 5%, but yes, we are getting much of it in the state of West Bengal in the new plant.

So are you talking about the interest subvention? What are you -- by 5%?

Yes, yes, yes.

Really. So our file for the interest subvention has been approved for the Bengal plant. But there is a condition in the application that only if we divert 75% of our quantities towards ethanol and only then we'll be qualified. So I don't think that as of now, we wish to do that because the Bengal has good margins when it comes to ENA. So although our files have been improved, and it's a very positive document when it comes for all the approvals, we don't think we will be taking full advantage of that interest subvention program.

Right. And so post this expansion, so where will be our total capacity as like with ethanol and ENA?

So our total capacity would be 400 KLPD in total when we account for ethanol and ENA. And around 60% of that capacity we expect to be diverted to ethanol and the rest for ENA.

Right. So you have done roughly around INR 1,400 crores this year closing FY '21. So if you are guiding for 20% growth conservatively for FY '22, so we can assume that you can do roughly INR 1,600 crores to INR 1,700 crores top line?

Yes. We're hoping for -- we're hoping and working towards a 20% growth in our Edible Oil segment. For any further growth in our Distillery segment, we'll have to increase our capacity because we're currently working at 100% capacity utilization. So that all depends on how many months of working we can get from Svaksha. Currently, we're expecting 1 quarter of working to be added from Svaksha Distillery. So it all depends -- the Distillery growth depends on that.

Okay. And finally, like 80% of the Edible Oil is presently imported in India. So where BCL as a company stands, and how are your original brands which you have added over the years? How they are facing in the market and what changes you are seeing in the last 1 year being locked down also. I think it was substantial growth, better volumes due to price hikes or sustainability in the market. So what is your take on that?

Yes. So I've explained this earlier also, what we experienced during the first lockdown was that since India is heavily an import-based economy when it comes to edible oil, there were these big refineries that were set up, import-based refineries. And during the first wave of COVID-19 when the lockdown was quite strict, most of these units were not able to resume production very soon. It took them a while, whereas we started our plants at a record time. Within a week of the lockdown, we were able to come into full production as our both distillery unit and edible oil unit. So once that has -- during that time, what happened was that a product in our own homogeneous brand was able to reach at peak. There was a lot of customers who wouldn't because there was a shortage of these other brands. And they really appreciated our brand, the product because, we have a big history -- we have a long history in our brands home cooked and multi. And once it teaches the kitchen initially and the consumer accepts the product, then it's very easy to get to that customer again, where it's hard to get a customer for the first time. So since then, we've seen a good increase for our own brand, and we are working towards our marketing aggressively, working along with our distributors to keep increasing our homogeneous sales.

Right. And considering FY '22 and how we closed in last quarter, so considering and more production coming up by Q2 and/or Q3 end. So -- but company has taken -- you have taken any steps to improve your EBITDA margins in the times to come because we are getting the top line, but if EBITDA margins improved, then the whole game changes?

See, we have to be realistic with the business that we're in. I think we're quite good when compared to the industry standards. But we are working towards increasing our capacity utilization, which might help for improving our EBITDA margins, but let's not be too unrealistic. Whatever the industry norms are, we'll be working in the same constraints as well.

[Operator Instructions] The next question is from the line of [ Bala Murali ], an individual investor.

Could you please throw some light on the existing...

I'm sorry to interrupt. Sir, you're not quite audible. If you could come a little closer to the phone?

Yes, yes, yes. Am I audible now?

Yes.

Could you please throw some light on the existing capacity of distilleries and after the expansion, what would be the capacity of the distillery?

Right. So currently, we have 1 distillery in Bhatinda, which is 200 KLPD. And the work for Svaksha Distillery, which is a subsidiary of BCL, also another 200 KLPD distillery in West Bengal is under full swing and we expect them to commission the plant by December of this year. And with that being added, there will be total capacity of 400. And we've also started to work for -- to double the capacity at our Bhatinda unit by adding another 200 KLPD of only ethanol plant. So for that project, we've gotten the CLU, our file has been submitted to MoEF for the processing of the environmental clearance and it's moving quite swiftly. And our project has been approved by DFPD for the interest subvention scheme to expand capacity of ethanol in the country. And we hope to add that capacity in -- by December of next year. And with that added, it to be a total capacity of 600 KLPD.

The next question is from the line of [ Abhishek Kapoor ], an individual investor.

Congratulations to the management for a good set of numbers. Sir, I have 2 questions. If you look at the trade receivables with respect to last year March, we have gone up by INR 100 crores. So is it possible for you to provide some breakup with respect to Edible Oil and Distillery segment?

I won't be able to provide you with the exact breakup right now, but the receivables have increased because we have increased the quantity of ethanol being supplied. So that is not on cash basis. So one is that. And this -- because of the increase in the capacity utilization of our Ethanol segment, some parts are on credit like the rice industry. So a bit of that is from that.

So is it that we will be maintaining these kind of receivables going forward next year as well, INR 100 crores? Or we can endeavor to reduce them?

We will try to bring it down, but with the increase in the business, it might stay around that.

Okay. Because if we see the revenue-wise increase, it is more on the substantial side potentially on the Edible Oil segment, not in the Distillery idea. So that trade receivables are on the higher side of the Edible Oil segment. Can we say that?

Yes, yes. Yes, you would say that they're more from the Edible Oil segment, but also from the Distillery segment due to an increase in the quantity supplies of ethanol.

Okay. Okay. And what is the inventory level of Real Estate we have, finished?

So for both of our projects, I think we sold over 75%. So another -- I think the realizable value for the remainder stands around INR 35 crores.

INR 30 crores to INR 35 crores, sir?

Yes, yes.

[Operator Instructions] The next question is from the line of [indiscernible], an individual investor.

Congratulations for the good set of numbers. The first question I have with the impetus on the Edible Oil segment, do you foresee any CapEx in the near future? That's the first one. And how do you see the debt panning out with couple of expansions in place over a period of a year or 2?

Yes. So there are no CapEx plans in the Edible Oil segment for the near future with the CapEx -- all the CapEx are in the Distillery segment. When it comes to the debt, the company is mostly funding the Svaksha Distillery by internal accruals. So with that plant coming into commissioning, we don't expect it to increase our debt by a lot. But for the CapEx at the Bhatinda distillery, the company wishes to raise INR 120 crores, which has been approved by -- in the interest subvention scheme. So that will increase the long-term debt by that in the coming 2 years.

Okay. And sir, the Edible segment again has sub-categories within it. Are you able to share the capacity utilization within Edible Oil segment because the ethanol part looks 100% occupied, right?

So the exact capacity utilization, I'll -- I think that might have been included in the presentation.

I apologize if I missed that.

But -- so the solvent and the refinery are working for 200%, whereas the oil mill is currently at around 25% to 30% capacity utilization. And the rice segment is currently around 60%.

Great. One last question. Now that the ethanol looks, from the government side of view, the policy is fully supportive of edible oil so kicking in and all that, what's the vision for the management with regard to 3 years or 5 years? I'm not looking for numbers or anything, but what's the direction they are headed to because these are 2 probably complementing, but 2 different segments.

Do you mean Edible Oil and Distillery, 2 different segments? .

Yes. Or what's the vision with regard to the company? Where do you see yourself in the next 5 years? You have 2 things, which are doing fine. Is there something new you want to ensure? Do you want to build on this Or do you have some number that you want to hit? What's the vision for the management?

So the vision for the management is to continue to be the largest supplier of grain-based ethanol in the nation and be part of this biofuel policy and play a big role in it. So for the next 2 years, the company hopes and expects to have a total capacity of 600 KLPD when it comes to the Distillery segment. Besides that, we're also working on something, but it's a little initial. So for example, GAIL had introduced a tender to join a JV along with them to establish a 500 KLPD distillery, biofuel distillery. Our company has submitted our tender for the same, but very initial to talk about. But we do expect to increase our distillery capacity in the coming years. Whereas when the Edible Oil segment comes into place, our current facility, we want to utilize the capacity to 100% with the increase in the oilseed cultivation in the nation. And from there, we'll decide how to take this segment forward.

Yes. Great, great. I'm not sure if you're in a position to comment with that deal venture that you're talking about. Would that be on the higher side of the EBITDA margin?

It's in very initial stages to make any comments on that.

The next question is from the line of Sagarika Mukherjee from Elara Capital.

Congratulations on good set of numbers and good year ahead. Sir, one big question that I have is that your extraction capacity utilization that you mentioned in Edible Oil 20, 60, 100 kind of thing. Can you just explain what is the interrelation between the 3 in terms of like, let's say, growing your Edible Oil business. While you say there is no CapEx required, but one of the capacities is actually at 100 while the others are 20 and 60, so if you could just explain the relation?

Right. So I'll explain this to you. So there are 3 different processes in this segment. So first, you buy an oilseed from the market, right? You take it to the oil mill where you crush it. And what is left over is your -- what you can call virgin oil. And on the other side, you have case that is left. So the cake still has some residue of oil in it. So we further take the cake to the solid extraction plant where further oil is extracted from the cake. But the oil extracted for the solid extraction plant requires refining to be human -- to be set for human consumption. So what we're currently experiencing is that although our refinery is working at full capacity utilization, we have to buy a lot of the crude oil from the market or we have to import it to further refine it. But if our oil mill comes into full capacity utilization due to availability of oilseeds in the market, then with the amount of crude that we have to buy from the market to keep our refinery running 200% will decrease quite a lot, which adds value addition to each and every process. Am I clear when I explain it?

Sure, sure. So the margins in, let's say, an oil mill, if you just -- you, I mean, get the oilseed and just crush it in your oil mill, the margins are higher in that segment? Or is it higher in the extraction and the refining segment?

See, if all -- if my entire process in my factory is working and I'm getting value addition at each and every step, then, of course, my EBITDA margin will be a little higher. So we benefit when there is more and more oilseeds available in the market. And with the policies that are in place today and the encouragement from the government, we expect this to improve in the next 2 years. It is a long-term policy so it will take its time.

Sure. Sir, if structurally the MSP for oilseeds and the import duties on crude oil, et cetera, of various forms keeps on increasing, and if along with that it leads to general inflation in oilseed also, does it really increase our margins permanently till the point this is happening? Or does it not affect the margins at all for us?

It'll affect our margins slightly. Yes.

It improves the margin slightly.

It will improve our margin side, but not too drastic.

Okay. Okay. Sir, secondly, as ENA or ethanol blending capacity, which one do you think is a better business proposition between the two?

I think they're both good business when mixed together. I wouldn't say which one is better or which one is worse. There's good demand for both the products. But with the ethanol push in the nation and the government wanting to increasing -- wanting to increase the supply of ethanol from [indiscernible] by tenfold, that is very attractive for now.

Right. And just what is the realization of ENA today in the market?

So ENA is around INR 48 a liter.

Okay. So both of them are roughly around the same prices, roughly?

Yes.

And you're saying the margin also is not very different between the two and even the capacities are quite fungible between the 2?

Yes.

The next question is from the line of [ Kay Pisha ], an individual Investor.

Hello. Am I audible?

Yes.

Sir, congratulations on a great set of results. So my question to start is, in the Edible Oil business, the revenue growth has been good, but is it primarily driven by better realizations? Or has there also been volume growth? And if you could quantify the same?

Yes. So the increase has been due to both. Of course, there has been an increase in the edible oil prices globally. And -- but also at the same time, we have seen that there has been good volume growth by our company as well. So if I were to quantify the increase to volume growth and to the increase in prices, I'd say 40% of the increase in the revenue is due to the prices in the global market increasing and about 60% is driven by our increase in quantity supply.

Okay, sir. And the next question would be that on the Real Estate business, how much inventory is left in terms of apartments? And when do you anticipate that this will be sold?

So we think it's another 1.5 years process to sell real estate. Didn't have the best year last year. But we expect another 1.5 years to be done with the inventory.

Okay. Sir. And lastly, I would want to ask is what is the growth outlook in terms of revenues for FY '23 with the West Bengal being commissioned?

For FY '22, '23?

Yes, sir.

So by FY '22, '23, we expect to get full revenue from the Bengal unit. We have -- we expect a full year of the Bengal unit running at full capacity with utilization. And by then, we're also hopeful that by the second half of that financial year, we are hopeful that we'll be able to commission our Bhatinda capacity as well. So that might increase -- that might add to the revenue as well.

The next question is from the line of [ Janas Koteja ] from [indiscernible].

Sir, in terms of the inventory on the Real Estate, so what's the value of the inventory?

Around INR 30 crores to INR 35 crores realizable value.

Okay, okay, okay. Sir, and on the working capital side, sir, there has been a huge increase on the receivables side. I mean what would be the reason for the same?

As I already mentioned, one being that we've increased the supply of our ethanol, which is not on a cash and carry. And then also because of the increase in the revenues from the Edible Oil segment, there was an increase in the trade receivable as well.

Okay, okay, okay. Sir, and what's the cycle -- receivable cycle based on the edible oil and on the ethanol?

For the ethanol, it's 21 days from the day it is received at their depot. So it takes about 5 days for us to transport because we're sending most of our ethanol to the drug. So on an average, around 25 to 26 days. And on the Edible Oil segment, it depends. A lot is on cash and carry, some is on credit. Rice is on a longer term of credit. So it depends.

The next question is from the line of [ Abhishek Kapoor ], an individual investor.

This question is with respect to West Bengal distillery. If I understood correctly, we are looking towards ENA side rather than ethanol. Am I correct, sir?

I mean, Pankaj, you can take this one?

So as I said earlier as well, we have not yet fixed on which exactly stream we are going to pursue in or not because the production is only going to commence by December. We'll be looking at the rates then and then take a call. ENA fetches a much better realization in the state of West Bengal and ethanol prices are absolutely fixed for the country. So that decision will be taken eventually once the plant commences. But yes, we have the capacity to produce both of them.

Sir, in that case, the subvention scheme which you talked about, that if we go towards ethanol rather than ENA, then we can avail that subvention. So what would be the time limit? Is it that once the project is completed, till that time we can take the decision?

Okay. So the interest convention scheme, as Kushal said, is only once you produce 75% of ethanol. And -- but at the same time, this plant has been pursued with promoter accruals and internal reserves and surplus so far. We have not taken any loan so far on this project. So at this moment, only towards the end if we feel there is a shortage of fund, then we may be taking the scheme, though our plant is already approved for the subvention scheme by the government.

Okay. Okay. Right, sir. In case we are going for ENA, do we have any tie-up with any of the brands for marketing of that?

Yes, BCL has been in this line for over 15 years. So there are a lot of tie-ups for ENA. All the major bottlers, including UB or [indiscernible] they're all buying from us. So we don't see any doubt of market out there.

The next question is Dinesh Kotecha from KRIC Capital.

I hand only 1 question. In the earlier con calls, you had given assurance that we will become debt-free by 2023. Is that on or it will be delayed?

Yes. So our assurance for that we will be long-term debt free, and currently, there's not much long-term debt on the company. The working capital debt will remain as we're growing. But now with the aggressive expansion plan, we expect to raise funding for the Bhatinda capacity. So we expect to be debt-free in the terms of our existing long-term loans, but that will be added debt.

Yes. And just secondly, I just wanted to know, the Q4 results were really better because the bottom line growth was more than the top line growth. I mean will this really continue further? Or how can you look at it?

See, we -- a lot of things worked our way in the last couple of quarters, one being more edible oilseeds being available in the market, which is good for the margin and also the grain prices being soft in the market for the Distillery segment. We are expecting this to continue for the near future. And so we hope to sustain this.

And sir, last question. I think the Real Estate, you said the inventory is between INR 30 crores to INR 35 crores and it will be completed by the end of the next year, March '22. So after that, the Real Estate segment will stop, am I right? And that money will be utilized for repaying off loans?

Yes, that's correct.

The next question is from the line of [ Dipesh Karia ] from [ Manya Finance ].

Many of my questions have been already answered. Just a couple of them. But first, at the new expansion, which we are planning in Bhatinda of 200 KLPD, is the cost of land also included in the INR 150 crores or the land already exists for us?

The land has been included in the cost.

Okay. So we have acquired -- we have already the land or we are going to acquire?

We've already acquired the land.

You already acquired the land, okay. And going ahead, what is the right -- what is the debt situation, what is the long term and what is the working capital debt?

Yes. So the debt situation as of now is around INR 170 crores in working capital. And we have about INR 22 crores left in term loan, which is on our Bhatinda distillery, which was the loan that we had taken on the Bhatinda distillery, and we are ahead of the repayment schedule. And INR 28.71 crores is currently in terms of lease rent discounting. So the company owns building in Gurgaon, which has been leased out to HUL. And we also own a cinema in Bhatinda. And the rent from this -- from both is sufficient to serve both the loans. And also we have around, I think, a little over INR 13 crores in terms of transportation loan that we had taken on about 33 tankers that the company had purchased in the help of transportation of ethanol and edible oils.

Okay. So this INR 28 crores, which we are getting from Hindustan -- HUL, right?

Yes.

Yes. So that is subject to -- I mean it's a long-term contract? How is it? I mean every 3 years, are we going to get a 10% increase? Is that the...

It's a 6-year long lease.

It's a 6-year long lease, okay. With any increase in any of the years? Or is it going to be a standard one?

I think it's around 12% increase after 3 years, we just resign the lease with them.

Okay, okay, okay. And is there any CapEx also required for Svaksha Distillery?

Yes. Pankaj, you can answer on the updates regarding that.

No. At present, the CapEx for Svaksha is already sorted as we said. And we have already invested more than 50% of it in the plant. 60% of the construction has already been completed. Yes, we should be commissioning it by the second half of this financial year.

So there won't be any additional CapEx required for Svaksha?

No. At this moment, it looks absolutely sorted with the current accruals and internal reserve and surplus we have.

Okay. So only the working capital, whatever will be required?

Yes, yes, yes, absolutely.

Fine. That's great. So going ahead, and how are we going to -- I mean, are we going to get the entire INR 150 crores spending in this financial year or are we going to distribute it over a period of time?

So INR 150 crores includes a working capital margin of INR 15 crores as well. So the planned CapEx is only about INR 135 crores and a part of which was already spent in the financial year '19, '20. And yes, the balance will be spent within this financial year because the plant has to commence.

Right. No, I'm talking about the Bhatinda expansion.

Okay. Bhatinda expansion Kushal will be able to.

So the Bhatinda expansion, what exactly is e question, I'm sorry?

We are planning to do an expansion with about INR 150 crores and we're going to take INR 120 crores as debt. I'm saying that -- and since you are going to commission them by December 2021, how is it -- how is this CapEx going to be distributed?

December 2022.

'22, I'm sorry.

Yes. So the CapEx will -- I think it will start from, I think, November and December onwards of this year and it will be distributed as we go ahead. So the first priority is Svaksha. And once that plant comes into commissioning, we'll move on to the CapEx for the Bhatinda plant.

Okay. And just 1 last question about the GAIL venture. Now I don't want any -- I mean I know that it's too preliminary. But have we applied for the entire file the 500 KLPD? Or is it less?

So they want to set up a 500 KLPD plant along with the private partner. And we have submitted our documents to show interest for the same. I think the deadline for everyone to submit this document is still going on. I mean, so it's too early to comment.

Is there any time line given by GAIL as in by this date, they will be able to announce?

I mean, no time line has given by them.

The next question is from the line of [indiscernible], an individual investor.

I was under the impression that the Bhatinda expansion is on the current plan, but you indicated to the previous gentlemen that this is a newly acquired land. So is that correct?

No. So the land -- no, this is not newly acquired. The land was already acquired.

Okay. So Mr. Mittal in his previous con calls had kindly explained the whole process of new facility being set up with acquisition to the land conversion and so on and so forth, it's a very extensive process. So would that -- with this land -- would that reduce any kind of time gap with regard for the commercialization where the conversion and the acquisition time is already captured, so that reduced the commercialization time?

Yes, yes, that is correct. So because acquisition of land and getting the CLU done is -- it takes its time. So we thankfully have done the same already. So now the next step is to get the environmental clearance and get the excise permit for the same, which is moving on quite a good speed because the government has brought in relaxation for people looking to expand capacity for existing units, we're looking to expand capacity in the ethanol industry, some MoEF rules have been realized. So yes, you're very correct. Once we receive all the approvals and our current focus is on Svaksha bringing that into commercialization, and as soon as that's done, the orders will be placed and we expect to bring the plant into commissioning by 10 months after the orders are placed.

Great. Any thoughts on inorganic acquisition? I understand the capacity itself are insufficient. But any thoughts?

No.

The next question is from the line of [ Dipesh Karia ] from [ Manya Finance ].

Yes. Just one correction, it's the [indiscernible]. And just 1 last question, 1 clarified question that the amounts that you're getting from HUL is per annum, right? Or is it over a period of 6 years?

I mean it's monthly rent that we receive over 6 years that we will receive.

What is the monthly rent?

I think it's around INR 22 lakhs, around that.

INR 22 lakhs, okay. Okay. Okay. Okay. I actually heard INR 22 crores, that's why.

No, no, no. There's this INR 28 crores of loan taking in terms of lease discounting over 2 buildings. One is that and the other one is a cinema that's been leased to Cinépolis. So we -- so that gives a separate rent.

So how much is the total rent which we get?

I think it's around INR 42 lakhs per month.

INR 42 lakhs per month. So that takes care of the entire interest as well as the repayment also, right?

Yes, yes.

The next question is from the line of Dinesh Kotecha from KRIC.

Sir, during the question, I read in the notes you are -- or in fact, the management instead of holding 62% stake, you have waived the dividend for your part, I mean, you said that with your own dividend. Now that was a good gesture or good management on your part. But any specific reason for waiving the dividends?

Yes. Because we're expanding our capacities quite aggressively, it requires a lot of CapEx. And so that's why we decided to hold it.

But really appreciate that you have taken this initiative on your own for the betterment of the company.

Thank you, thank you.

That was the last question. I would now like to hand the conference over to Mr. Kushal Mittal for closing comments.

Yes. Thank you, everyone, for joining us. Hope we were able to answer your questions to the best of our ability. And we'd just like to assure that your company is doing well. We are growing. The business is doing very well. Despite all the turbulences caused by the pandemic in the last year, we were able to have our best year. And we expect to improve in the coming years as well with all your support. And thank you, again, for joining us.

Thank you. On behalf of BCL Industries Limited, that concludes this conference. Thank you for joining us, and you may now disconnect the line.