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Magadh Sugar & Energy Ltd.

BSE: 540650 Sector: Agri and agri inputs
NSE: MAGADSUGAR ISIN Code: INE347W01011
BSE LIVE 15:40 | 15 Dec 187.20 -2.80
(-1.47%)
OPEN

197.00

HIGH

197.00

LOW

185.00

NSE 15:31 | 15 Dec 185.00 -3.80
(-2.01%)
OPEN

197.95

HIGH

197.95

LOW

183.75

OPEN 197.00
PREVIOUS CLOSE 190.00
VOLUME 878
52-Week high 364.00
52-Week low 160.05
P/E 3.16
Mkt Cap.(Rs cr) 189
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 197.00
CLOSE 190.00
VOLUME 878
52-Week high 364.00
52-Week low 160.05
P/E 3.16
Mkt Cap.(Rs cr) 189
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Magadh Sugar & Energy Ltd. (MAGADSUGAR) - Chairman Speech

Company chairman speech

Dear Shareholders

Our country is witnessing rapid transformation across all major sectors of the economy.At the same time the rate of GDP growth is one of the highest in the world. MoreoverIndia has become the sixth largest manufacturing country in the world rising from itsprevious ninth position. The government's focus on wide-ranging reforms is driving theeconomy forward despite a largely volatile global economic scenario.

Among the major reforms that were implemented during FY 2016-17 GST deserves mentionin this context. It was a radical step to bring the entire country within the ambit of auniform indirect tax structure. The rapid rollout of GST will strengthen the economyconsiderably going forward.

The performance of the agricultural sector and agro-based industries play a major rolein a developing economy like India. The Government of India announced Budgetary support in2017 to enhance the income of farmers significantly in the next five years and toaccelerate rural development. These measures will also benefit the sugar industry whichis witnessing a gradual recovery. However it is worthwhile to mention in this contextthat from a long-term perspective India's sugar industry remains highly cyclical anddependent on domestic and international supply-demand fluctuations.

Operating in such a scenario we are striving to strengthen our operational efficiencies augment sugar revenues increase the proportion of value-added products andcreate a shared sense of purpose with all our stakeholders.

INDUSTRY SCENARIO

Despite persistent challenges India's sugar industry contributes significantly to thecountry's socio-economic well being. The industry caters to the growing domestic demandfor sugar and generates surplus energy to help meet the country's growing energy needs.

Sugar production in India saw a sharp fall in 2016-17 leading to a firming up of sugarprices. The performance of states in India's sugar landscape was distinctly diverse.Maharashtra and Karnataka continue to face issues because of drought. The states have notrecovered yet despite a decent monsoon in 2016. Maharashtra Karnataka Andhra Pradeshand Telangana also suffered a significant low cane production. On the other hand UttarPradesh had a substantial increase in sugar production.

During 2016-17 sugarcane production in Bihar faced some headwinds in the form oferratic rainfall and cyclone resulting in an overall lower production. Recently theBihar cane industry has set an ambitious target of increasing the sugar cane production inthe state to 315 lakh metric tonne (MT) over the next cropping seasons (2017-22). The areaunder sugar cane cultivation was 2.49 lakh hectare in 2011-12 which increased to 2.64lakh hectare in 2016-17 by ‘sustained motivational campaigns'. The State Governmentaims to further increase the cane cultivation area to 3.50 lakh hectare by 2022. Theoverall increase in cane cultivation will lead to proportionate increase in overallproduction.

BUSINESS PERFORMANCE

During the year we streamlined our operations to augment strengths of our businesseslocation-wise. We completed the restructuring of Oudh Sugar and Upper Ganges; and therationale behind this decision was to enhance efficiencies and commercial synergies amongmultiple businesses. Post the restructuring sugar business undertakings of The Oudh SugarMills Ltd and Upper Ganges Sugar & Industries Ltd categorised geographically in thestate of Bihar stand transferred and vested in Magadh Sugar & Energy Limited.

Moreover the restructuring will enable us to focus on each business segmentindividually. This will lead to concentrated efforts towards food processing and teagarden business. We are confident this move will let us address the dynamics of eachbusiness with confidencewhile improving our shareholder's value.

I am especially pleased that our proactive approach towards cane development augmentedour performance. Our process innovations and experiments with new varieties of sugarcaneenabled us to reinforce our market prominence. We performed efficiently crushing cane atrecord levels and maintaining optimum recovery at the same time. Our co-generation andethanol production also maintained satisfactory levels.

The welfare of the farming community remains one of our top priorities. We prioritizethe needs of farmers and ensure that arrears outstanding to them are cleared on time. Wealso help them with our insights for better farming practices.

WAY FORWARD

We are striving towards sustainable growth and our key priorities for the futurecomprise the following:

I am especially pleased that our proactive approach towards cane development augmentedour performance. Our process innovations and experiments with new varieties of sugarcaneenabled us to reinforce our market prominence.

• Focus on reducing high-cost debt and strengthening our debt equity ratio;

• Leverage synergies of our newly restructured business model;

• Enhance efficiencies of our machinery;

• Grow the portfolio of value-added products;

• Achieve better working capital management and rationalisation of cost structure;

• Align our corporate objectives with the aspirations of our stakeholderfraternity

We are consistently investing in enhancing the capabilities of our people throughneed-based training and coaching. At the same time we continue to build better relationswith our farmers whose support remains the key foundation for our future growth.

On behalf of the Board and the entire leadership team I thank all our stakeholdersbusiness partners as well as customers for their continued guidance and support.

Thank you

Chandra Shekhar Nopany

Chairperson