Key Result Highlights:
- Sugar performance improves in standalone operations: Owing to strong growth in both domestic sugar sales volume (28% y-o-y) as well as export volume (23% y-o-y), sugar segment posted robust revenue growth of 39%. Moreover, average export realisation, which was strong at Rs35/kg vis-à-vis average domestic realisation of Rs27/kg during Q1FY13, helped SHRS post PBIT margin of 11.2% (up 580bps y-o-y). However, due to early completion of crushing in the current sugar season, by-product volumes were lower y-o-y. Nevertheless, this was offset by the sugar segment and the company posted strong EBITDA growth of 31% y-o-y. But, steep jump in interest expense to Rs114mn (owing to higher debt, higher interest rate) in Q1FY13 vis-à-vis Rs51mn y-o-y resulted in core PAT declining 58% y-o-y.
- Steep hike of 20% in sugar price in past one month: While average sugar realisation for SHRS was at Rs27/kg in Q1FY13, it has shot up about 20% over the past one month to Rs33/kg currently due to concerns over monsoon and an incremental demand coming ahead of the festive season. This is likely to augur well for the company’s standalone operations’ profitability.
Outlook and valuations: While SHRS’ operational performance is likely to improve in standalone operations over the next two quarters owing to higher realisation and in Brazilian operations due to better cane availability expectation, debt concerns persist. Hold
Click here to read the full report
Edelweiss is one of the leading financial services company based in Mumbai, India. Its current businesses include investment banking, securities broking and investment management. They provide a wide range of services to corporations, institutional investors and high net-worth individuals.
For more information please write in to firstname.lastname@example.org
Disclaimer: The author has taken due care and caution to compile and analyse the data. The opinions expressed above are only the views of the author, and not a recommendation to buy or sell. Neither the author nor IndiaNotes.com accept any liability whatsoever arising from the use of any of the above contents.
- Time to invest in sugar sector for long term; upside potential 60-80%
- Shree Renuka Sugars: Bleak domestic production outlook
- Shree Renuka Sugars: Back on track
- Shree Renuka Sugars Q5FY12: 11% YoY growth in EBIDTA to Rs3.3b
- Four key triggers for Shree Renuka Sugars
Have a question?
Also On IndiaNotes.Com
- IL&FS Transportation: A demand for road development, buy
- Coal India OFS: Investors recommended to subscribe under retail category