Release Date: November 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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E I D Parry India Ltd (BOM:500125) reported a surplus in the global sugar balance for the sugar year 2024, indicating a stable supply-demand scenario.
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The company is experiencing good volumes in its distillery business, despite some margin dilution.
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The consumer product group has shown progress with the expansion of distribution and the launch of new products.
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Ethanol blending targets are on track, with a goal of 20% blending by sugar year 2026.
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The company is focusing on geographical expansion in the South for its staples and sweetener businesses, with plans for further growth.
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The company faced challenges in sugar recoveries due to poor monsoon conditions, impacting costs and margins.
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There is a short-term tightness in sugar availability due to lower Brazilian output, causing price volatility.
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The sugar division experienced a reduction in sales volume due to a lower release quota.
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The refinery business is under pressure due to decreasing white premiums, affecting profitability.
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The cogeneration business faces challenges, particularly in certain states, impacting overall performance.
Q: Can you provide more insight on the refinery operations for the second half, considering the decrease in white premiums? A: (CFO) The white premiums have decreased recently, but we have a forward book that hedges against this. We expect the premiums to recover with improved demand from December. While we may not reach the levels of H1, we are hopeful to make ends meet in the second half.
Q: What is the outlook for the sugar business, especially after the monsoons? A: (CEO) We face challenges in Tamil Nadu due to structural issues, but Karnataka shows robust outputs. We expect these challenges to resolve over six months to a year. Monsoons have been favorable, but recovery challenges related to soil fertility may persist for some time.
Q: Could you discuss the growth plans for staples and sweeteners, and any geographic expansion? A: (Director) We are focusing on the South for both staples and sweeteners, with some presence in Mumbai and the East. The release quota for sweeteners was low, affecting growth. We aim to grow our non-sweetener business and are exploring tolling arrangements to manage production constraints.
Q: What is the current advertising and promotion expenditure for the consumer product business, and what is the share of modern trade and e-commerce? A: (Director) E-commerce, quick commerce, and modern trade account for 25-30% of our business. Advertising and promotion expenditure is around 10-12% of total sales and is expected to remain at this level.