Dear Shareholders,
Good morning to all of you!
First and foremost, let me express my heartfelt appreciation to each member of our
dedicated team, whose unwavering commitment and hard work have made our organization a
symbol of excellence. It is your perseverance and dedication that have propelled us to
greater heights, even in the face of challenges.
As you know the sugar industry has played a pivotal role in the economic and social
fabric of our nation. We have not only been a significant contributor to the nation's GDP
but also a major source of livelihood for thousands of farmers and workers across the
country. As we continue to grow, we must never forget our responsibility towards the
well-being of our community and the environment.
Given that context, I am grateful that on the business front it has been a highly
satisfactory year being consistently strong and profitable.
Our Revenue from Business Operations is Rs. 27,994 Lakhs as compared to the previous
F.Y of Rs. 12,423 Lakhs. There is increase of 125% in Revenue from Business Operations as
compared to the previous year due to production of Ethanol from June 2022. The Profit of
the Company recorded an increase of 132.66% at Rs. 1,322 Lakhs as compared to the previous
F.Y of Rs. 568 Lakhs. The Earnings per Share is Rs. 1.48 as compared to the previous EPS
of Rs. 0.91. The Company has shown the consistent performance and growth over the years.
Your Company's financial position is sound to take care of future growth through internal
accruals. The Indian government has been actively promoting the use of ethanol in the
country's fuel sector through the Ethanol Blended Petrol (EBP) Programme. This initiative
aims to blend a certain percentage of ethanol with petrol to reduce the nation's
dependence on fossil fuels, lower greenhouse gas emissions, and encourage the adoption of
renewable energy sources. The government set ambitious targets of achieving a 10% blending
of ethanol with petrol (E10) by 2022, with a further goal of reaching 20% blending (E20)
by 2025. These targets are part of the government's broader strategy to boost the
production and consumption of ethanol in the country.
To facilitate the growth of ethanol production, the government devised a policy to
incentivize sugar factories to produce ethanol directly from sugar cane juice. This move
presented numerous opportunities for sugar factories to generate ethanol during the
crushing season using sugar cane juice as a feedstock, and also to produce ethanol from
B-Heavy molasses and grains during the off-season, ensuring a minimum of 300 days of
ethanol plant operation.
Furthermore, the government fixed attractive prices for ethanol and committed to
procuring the entire production through long-term off-take agreements and frequent
tenders.
New Beginnings
Responding to the government's Ethanol Blending Programme, the Company took proactive
steps in 2020 to establish an Ethanol Plant. These steps included engaging engineering
firms to design the plant's layout and structure, planning the process flow, specifying
equipment requirements, identifying reliable suppliers, appointing skilled technical
personnel, and ensuring regulatory and environmental compliance. Additionally, the Company
secured the necessary finances from banks and other financial institutions to cover the
estimated cost of Rs. 99.31 Crores for the 65KLPD Ethanol plant, raising bank finance to
the tune of Rs. 73.56 Crores.
In 2022, the Company successfully commissioned the Ethanol Plant, with production
commencing on 31st May, 2022. During the current Financial Year 2022-2023, the Company has
achieved a significant milestone by producing 99 lakhs of Ethanol using feedstocks such as
sugarcane syrup and B-Heavy molasses. Moreover, the Company explored additional sources
for ethanol production, including grains like rice, FCI, surplus rice, broken rice, and
maize. The surplus production of ethanol from grains marks another positive development in
the Company's progress toward supporting the Ethanol Blending Programme's objectives.
Expansion Plans
The Company has decided to implement a strategic shift towards sugarcane and ethanol
production, which has proven to be significantly more profitable than traditional sugar
production and sales. In light of this decision, the Company aims to expand its existing
ethanol production capacity from 65 KLPD (Kilo Litres Per Day) to 110 KLPD. The estimated
cost of this expansion project amounts to Rs. 54 Crores.
To finance the expansion and cover the cost of the existing capacity, the Company
intends to secure a loan of Rs. 40 Crores from Banks and Financial Institutions. The
projected timeline for completing the expansion plan is set for the year 2024.
The result is that the Company stands at an inflection point not just on account of a
new beginning with a fresh perspective but also because of the buoyant prospects in its
sector that are expected to sustain.
I welcome our shareholders to this exciting and rewarding journey.
My best wishes to you all! Thank you!