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Shree Renuka Sugars Ltd.

BSE: 532670 Sector: Agri and agri inputs
NSE: RENUKA ISIN Code: INE087H01022
BSE 00:00 | 30 Mar 4.34 0.39
(9.87%)
OPEN

3.95

HIGH

4.34

LOW

3.61

NSE 00:00 | 30 Mar 4.25 0.35
(8.97%)
OPEN

3.90

HIGH

4.25

LOW

3.75

OPEN 3.95
PREVIOUS CLOSE 3.95
VOLUME 397914
52-Week high 12.53
52-Week low 3.20
P/E
Mkt Cap.(Rs cr) 832
Buy Price 4.34
Buy Qty 7088.00
Sell Price 4.34
Sell Qty 2084.00
OPEN 3.95
CLOSE 3.95
VOLUME 397914
52-Week high 12.53
52-Week low 3.20
P/E
Mkt Cap.(Rs cr) 832
Buy Price 4.34
Buy Qty 7088.00
Sell Price 4.34
Sell Qty 2084.00

Shree Renuka Sugars Ltd. (RENUKA) - Chairman Speech

Company chairman speech

The nation's sugar sector has turned a new leaf in the history byencouraging its ethanol programme. The huge leap in the amount of blending from 2.1% inFY2016-17 to 7.2% in FY2018-19 is commendable. The sector has also witnessed favourablepolicy support from the Government such as stabilising the Minimum Sale Price of sugar.The Government has also worked towards keeping cane arrears to a minimum despite the glutin FY2018-19. The sugar sector is looking forward to better times.

Dear Shareholders

FY19 has been an extremely eventful year for India's economy as well asthe sugar sector. Despite the global slowdown India's GDP still grew at 6.8% inFY2018-19. The business environment was stable and shall continue such with there-election of the existing Government with a huge majority. Policy deviations areexpected to be consistent and the same agenda of growth is likely to continue. Thedisruptive decision of implementing 'one nation one tax initiative' the Goods andServices Tax overcame its initial hiccups and has strengthened the nation's fundamentals.The monetary disruption due to demonetisation in the previous fiscal has also beencontained.

REVIEW OF FY2018-19

Renuka had a good financial year 2019.

The performance of the Company was much superior to previous years'both in crushing refining and ethanol production. We crushed 41.89 million metric tonnesof cane in the year under review as compared to 31.62 million metric tonnes in FY2017-18.Our refinery operations in Kandla grew by 20 bps y-o-y.

The refinery refined 1.1 million metric tonnes of raw sugar inFY2018-19 as compared to 0.83 million metric tonnes in FY2017-18. This is the highestquantity of sugar refined since the inception of the plant. We produced 121129 kilolitres of ethanol in the year under review as compared to 75277 kilo litres in FY2017-18.

Our Company also showed a robust commercial performance. Our refinerygross margins improved from 9.81 % to 18.2% year-on-year. Our distillery margins were at40.5% with the robust governmentsupport and our ethanol production was also up by 51 %.

Renuka's Madhur brand the flagship sugar brand in Indiaincreased its market reach with wider distribution in Haryana Madhya Pradesh AndhraPradesh Telangana and Punjab. Plans are afoot to grow Madhur in newer geographies with asteep curve.

PERSPECTIVE ON THE UPCOMING FISCAL

In the coming year sugar production could reduce due to dry weatherand lowerwater availability in parts of Maharashtra and Karnataka. It is estimated thatsugar production may fall from 33.2 million metric tonnes to 28.2 million metric tonnes in2020 a reduction of 19.5%year-on-year. However with huge opening stock of 14.5 millionmetric tonnes in the FY 2019-20 season as against a normal stock reguirement of 5 milliontonnes surplus shall continue to put pressure on the market. I expect the drive towardsexports to continue and the ethanol blending programme to keep gaining momentum due to thepush on maximising production of ethanol from B-molasses and sugarcane juice. We alsobelieve that the Government shall continue with Minimum Sugar Prices policy to arrest anyscope of downward spiral ofsugar prices in this sectoral glut.

HALTING THE UNENDING CYCLE

The sugar sector is highly cyclical.

Currently with the development of new cane-growing technigues and theavailability ofsuperior cane varieties and fertilisers there has been continuous surpluscane production in the nation. To break this excess production the Government isundertaking various steps to ensure all the industry stakeholders remain profitable. Onesuch step is the updated National Policy on Biofuels-2018 which envisages a target of 20%blending of ethanol in petrol by 2030. The policy has widened the scope of divertingsugarstocks for ethanol procurement. The Government is taking numerous steps to bringabout this change in the sector such as increasing ethanol prices allowing the use ofB-heavy molasses for ethanol manufacture and

encouraging mills to create additional distillery capacities byannouncing soft loans at subsidised interest rates worth almost Rs.10500 Crore.

OPTIMISTIC ABOUT A SUSTAINABLE GROWTH

Sugar being an agro-based industry receives good support from theGovernment policies. We have aligned our growth strategy in line with the nation'sobjective by growing further in the areas of ethanol manufacturing and distribution. Wehave leveraged the ethanol-friendly policies of the Government and are planning to growour ethanol production capacities from 930KLPD to 1020 KLPD.

We are also actively conducting numerous cane development activitiessuch as enlightening our growers of the new methods of cane plantation and irrigation andproviding them with pesticides organic manure and crops at subsidised rates. We alsoencourage farmers to develop model plots on their farms to propagate the idea of growingnumerous seasonal crops in the fields along with cane for additional gains and thesustainability of their livelihoods.

Our cogeneration activities testifies our drive towards ensuring asustainable future for our Company. We are producing green energy from bagasse and usingit captively to power our operations. We sell leftover power to the state electricitygrid.

I personally believe that India's sugar sector is set on a path ofgrowth. With changes in sectoral strategy and favourable Government initiatives we arelooking at exciting times ahead. We will continue to leverage our core competencies andcreate value for our shareholders and continue our journey of growth towards a sustainablefuture.

Lastly I want to thank all our stakeholders who have been supportingus during our good and bad times and have been part of this eventful journey with us.

Warm regards.
AtuI Chaturvedi
Executive Chairman