Bannari Amman Sugars hits new life-time high, surges 17%

Shares of Bannari Amman Sugars (BASL) continued their northward movement, hitting a new high of Rs 2,850. The stock has so far rallied 17 per cent on the BSE in Monday’s intra-day trade and was quoting higher for the fifth straight trading day, zooming 35 per cent in one week. In comparison, the S&P BSE Sensex has risen 4.3 per cent during the period.

On November 30, 2021, BASL announced that  the CARE Ratings reaffirmed the credit ratings for the credit facilities availed by the company from bankers.

The ratings assigned to the bank facilities of BASL continue to factor in the well- established and long track record of the company in the sugar industry, integrated nature of operations with income from distilleries and power including income derived from the granite business, CARE Ratings said in rationale.

BASL is the flagship company of the group and boasts of a successful operational track record of over 30 years in the sugar industry. The company is engaged in the manufacture of sugar, industrial alcohol, bio products, granite products and generation of power through sugar co-gen and windmills.

BASL is in the process of incurring capex of Rs.150 crore spread across FY20 - FY22 for the purpose of expanding its distillery capacity in Karnataka from 60 KLPD to 150 KLPD and addition of capacity to manufacture ethanol from B-heavy molasses and sugarcane juice. This apart, BASL plans to modernize its distillery in Tamil Nadu for a total expenditure of Rs.50 crore beginning February 2021. The same is expected to be completed by end of Q4FY22 and aid the company in increasing the alcohol yield.

The ratings, however, continue to be constrained by the lower sugarcane recovery rates, susceptibility of the revenues and profitability to the demand-supply dynamics, susceptibility to agro-climatic conditions, cyclical and highly regulated nature of the industry, the rating agency said.