Balrampur Chini Mills Ltd (NSE: BALRAMCHIN) Q1 2026 Earnings Call dated Aug. 13, 2025
Corporate Participants:
Unidentified Speaker
Pramod Patwari — Chief Financial Officer
Anup Pujari — Investor Relations
Vivek Saraogi — Executive Chairman of the Board, Managing Director
Avantika Saraogi — Executive Director
Jenny Rose
Analysts:
Unidentified Participant
Sanjay Manyal — Analyst
Prashant Biyani — Analyst
Nikhil Agarwal — Analyst
Shailesh Kanani — Analyst
Krishan Parwani — Analyst
Presentation:
operator
Ladies and Gentlemen, good day and welcome to Balrampur Chini Meals Limited Earnings Conference Call. As a reminder, all participant lines will be in the lesson only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on a Touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Jenny Rose from CDR India. Thank you and over to you Ma’. Am.
Jenny Rose
Good afternoon everyone and thank you for joining us on Balrampur Chini Mills Q1FY26 results conference call we have with us today Mr. Vivek Saraogi, Chairman and Managing Director of Balrampur Chini Mills, Ms. Avantika Sarogi, Executive Director and Pramod Patwari, Chief Financial Officer of the Company. We would now like to begin the call with brief opening remarks from the management following which we will have the forum open for the question and answer session. Before we start, I would like to point out that some statements made in today’s call may be forward looking in nature and a disclaimer to this effect has been included in the results presentation shared earlier.
I would now like to invite Mr. Saraughi to make his opening remarks. Over to you Sir.
Vivek Saraogi — Executive Chairman of the Board, Managing Director
Thank you everyone and good afternoon and thank you once again for joining us on our Balrampur Cheney Mills Q1FY26 earnings call. I trust all of you have had the opportunity to go through our results presentation. I will initiate the call giving a brief update on the current development in the sector. According to ISMA, sugar production for the upcoming season I.e. 2526 is expected to be around 350 lakh tonnes. The pre diversion up about 18% from 29.6 million tonnes in the previous year. These are early estimates and are based on satellite imagery, rainfall data, field reports across three key cane growing states.
While the overall sugarcane area has increased only marginally, favorable monsoon conditions and improved crop health are expected to drive higher productivity statewide. Maharashtra is expected to see a 42% increase in sugar production and these are all pre diversion figures expected to touch about 13.2 million. Karnataka early estimates may register a jump of 23% touching 6.6 million while UP may be remaining stable at 10.2 million. In UP there is a decline in cane area but we are hoping for a much better yield based on improved crop resilience and better disease management. This anticipated surplus presents both opportunities and challenges for the sector to maintain the market stability and avoid pricing pressure on sugar.
A diversion of 4.5 million tonnes into ethanol and around 2 million tonnes of exports will be the key decisions. This will help balance inventory while supporting India’s clean energy objectives. However, with the ethanol prices under juice and B heavy routes unchanged for two years, the industry continues to now eagerly await the timely policy support including divisions in ethanol price and minimum sale price of sugar. MSP as popularly called. Such measures will be critical to sustaining sector profitability and ensuring timely payments to farmers in a surplus year. Coming to our Ballrampur’s Business Performance company began the fiscal on a steady note with revenues rising in both sugar and distillery segment on back of higher volumes and realizations.
Sugarcane crushing operation during the quarter declined by approximately 66% resulting in a 65% drop in sugar production and leading to an under absorption of fixed overheads due to the short season. Our focus remains on strengthening cane availability through developmental initiatives and varietal rebalancing in future seasons and I would request Avantika to elaborate more on this when she speaks. At the same time, we are closely tracking policy developments as supportive measures particularly in ethanol pricing and MSP would be instrumental. As previously stated, our PLA Polylactic initiative remains a key pillar for our future growth strategy. In recent years we have progressed from concept to detail engineering, secured strategic technological partnerships and aligned with the project with evolving regulatory market trends that favor green alternatives to petrochemical plastics.
With construction activities now underway, we are building a domestic market by trading imported PLA to see demand increase awareness amongst manufacturers and converters and encourage local production of PLA based end products. This phased market development approach is helping us establish strong early customer relationships and ensure market readiness for a smooth transition to in house production targeted for commissioning. In Q3FY27 which is October 2026 till July end, we have spent about 927 crores comprising 460 crores through debt balance from internal accruals towards gross capex which is around 2850 crores. Our long term strategy is centered on sustainable growth, innovation and disciplined capital allocation.
The sugar and distillery business has evolved into stable contributors over the past few years. This year we await the government policy delivering steady cash flows in challenging operating environments. Looking ahead, we see the pioneering PLA project as a structural pivot that will diversify our portfolio into bioplastics and position Balrampur at the forefront of green transformation. By maximizing value from every stick of gain and leveraging our integrated model, we aim to contribute meaningfully towards transition to a circular economy and a more Self reliant sustainable future. I’d now request Avantika to give you an update on gain and maybe a little bit of PLA and thereafter promote.
Avantika Saraogi — Executive Director
Good afternoon everyone. So just to begin with Kane, so as already stated, up has seen a slight decline. Ours is also I think flattish to maybe a slight decline. We’ll be able to give better figures in the next quarter because the display and corrections are still on. But we don’t see a very big challenge there. But having said that, the yields are definitely looking better. This is owing to the distribution of the rain. So I just want to compare it to last year. Last year we had good rain as well if you quantified in inch terms.
But the distribution was a bit leaving us to ask for. In fact in three of our factories we had very big floods during the maturity period and this resulted in a lower crushing and recovery than expected. More effect on recovery than crushing I would say even over there. And this year the distribution up till now has been actually very very favorable. This also indicates that there might be a couple of winter showers which as we have been stating for the past one year increases the yield and recovery in plant gain a lot. So we are quite hopeful for the weather conditions this year.
And I just want to also highlight that last year even though we had about a 10% lower cane area, our crushing only dropped by 1.75%, 1.5, 1.75. And this just shows the on ground activities and work for yield and disease management which have resulted in our positive even in a bad year. So where everybody is declining we are able to sort of get something better out of it. And in favorable weather conditions I think we should keep the outperformance up. Our pest and disease control is very very tight. We have negligible, I would say pest and disease encroachment, any kind.
Our ratoon management has actually been a big kicker which we saw a bit of last year and we should see even better in the upcoming season. So now even in eastern up we have managed to do a paradigm shift where now the farmers have started to come out and do ratoon management without us having to tell them. So this actually accounts for 50% of our crushing and this is where we have gotten the bump up this in yields of course and this will help keep our crushing stable. Also I want to mention that the crushing will start early this year since the festivals are also earlier and the weather conditions are up till now Touchwood looking good.
So we see a positive year for keen upcoming then if we move on to pla. I just want to talk a little bit about the market in India, about pla because I think that that’s a point which comes up in every conversation. So just to begin with, we will begin our commissioning in Octo and in our first year we probably have about a 50% capacity utilization with quality in the first year. So we are already on our way to importing and selling under our brand name. We have touched. It’s also there in the presentation. So this doesn’t need to be written down.
We have touched more than 175 customers directly already. We are catering to 50 plus, we have 30 plus trials going on with different companies of good caliber. And you know, we are creating a lot of awareness with our Biogon wheels. This is giving us a lot of tailwind when it comes to showing people the possibilities, whether it is at the government places, whether it is at big brands and things like that. The other thing is that we expect that by the time our plant is at full capacity, our plant should be sold out within the country.
Having said that, we will of course sort of take the best price that we can get, whether it is inside of the country or outside. And we don’t see at all a challenge there. I just want to also mention that Karnataka and Kerala state governments are giving a lot of push for circularity, compostability. And even in the north Rajasthan, Gujarat governments, all the CPCBs are taking it very positively. And even at the central government level, we are getting lot of positive response from all the departments. So we are very confident and we are very excited to go forward with this.
Thank you Pramod.
Vivek Saraogi — Executive Chairman of the Board, Managing Director
Thank you and good afternoon everyone. I hope all of you had the opportunity to go through the results presentation that has been shared. So for the benefit of time at our disposal, I would request the moderator to open the forum for Q and a session. Thank you.
Questions and Answers:
operator
Thank you sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchstone telephone. If you wish to withdraw yourself from the question queue, you may press star and two participants are requested to use handset while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. First question is from the line of Sanjay Manyal from Dam Capital. Please go ahead.
Sanjay Manyal
Hi sir, have one question on the ethanol. Since now we have reached almost average 19% kind of ethanol blending. What is your view from the demand conditions say next few years? What is your discussions with the government about increasing the blending from 20 to 25%. And you know how the demand probably will be pan out over the next few years and what probably also will be the contribution of sugar cane based feedstock and grain based feedstock. So what exactly your discussions with the government on this?
Vivek Saraogi
Yeah. Hi Sanjay. Thank you. So I’ll answer what Sanjay has asked in a little more. So if you saw there were some articles recently published by CM which was talking about the issues in engines beyond 20. Government of India has come out with a very clear clarification yesterday where they not only spoken about this misnomer being a misnomer, they’ve also very clearly given and detailed the benefits in terms of forex etc. And they’ve gone on to say how they back the ethnol program per SE. So even BIS standards are being fixed. Probably they would move from 26 onwards they have detailed a roadmap or they’re in the process of putting up a roadmap from 20 to 22, then 25 to 27.
So demand conditions don’t worry me. Government’s commitment to the program doesn’t worry me especially after what we have read yesterday is very detailed paper you could share with some of the investors. It’s in public domain. Lastly what we are dealing with right now is the ethanol pricing. I am very hopeful especially since government has said it’s such a beneficial program. Why not do what they’ve not done for two years. We are in active persuasion with all government sources for juice B, both prices and this year being a surplus here. So let me put my thinking on the table a bit.
Last two years the environment was not that of surplus. Next year, the first year we are entering surplus production. So the government’s attitude when there is a surplus and when there is not a surplus, very different. So if you saw in the yesteryears they have given about 10 rupees a kg. I’m talking a real time bank from maybe 10, 12, 15 years back. I don’t remember 10 rupees a kg which is 1/3 of the export prices subsidy just to handle the surplus and the areas. So I think next year we are very positive and I personally feel that the ethanol price would increase because this is the only thing which will kick start the diversion and maybe take it to even beyond 4.5 million.
Is the need of the hour beneficial for the country and owing to the surplus I guess there is not much of an option. And I’ll also tackle the MSP question minimum sugar price. We are again actively lobbying for both MSP and exports But I guess exports will happen when the production figures get much clearer. If you do recall, last year in January, even with a vapor thin surplus of 1 million the government did allow 1 million to go out. So given the prospect of the surplus being larger I personally feel that should also happen in around the same time.
I mean one can’t commit. It’s maybe as soon as government gets confidence promote that the production is what it is being envisaged. So these are the you know comments on ethanol demand, ethanol pricing, MSP and export. I thought let me brief the house once for all. Thank you.
Sanjay Manyal
And so what is your view on the proportion? Because last few years the maize ethanol production has gone. Maize ethanol diversion has been a lot higher than the molasses. So you think that government this year will balance this out?
Vivek Saraogi
Yes, yes. So two parts to this. The demand could not have been fulfilled by the sugar industry owing to lack of raw material fully. And the year previous to that they just put a grinding all suddenly on diversion. So the demand needed to be fulfilled. Maize came and did the gap filling a current year. If you see the there have been some unintended consequences of maize area increasing. So I think if Sanjay, I get your question correctly. What if there is an oversupply? We will get our share is the answer. Maybe maize gets curtailed. For all you know we get our share because again we go back to the basics.
Basics is there is surplus, surplus needs to be diverted. If not diverted, sugar price will suffer. That is the reason why this will happen. That is diversion your ability. If it’s 45 million government will take that and exports also should happen. Should be production figure come to what we are thinking it would go to.
Sanjay Manyal
Right. So one question I have on the sugar recovery side. Last year we across up we have seen a significant decline in the recovery. Given the fact that as you have mentioned the rainfall has been well spread. And so is it possible that we can go back from again 11.3% to 11.7% or new varieties have been hampering that.
Avantika Saraogi
I think definitely there is a chance. I mean and I would think up to now a good chance for that to happen. Our varietal balance is on a really good front. I would say the red rot laden 238 is only about 7% which is super healthy. So that will also give us maximum of what it gives. And the rest of our varieties are also I would say best in the state, best in the country even. You know. But we are very, very hopeful.
Vivek Saraogi
So Sanjay, basically if. Yeah, you know I am to hazard a guess, 11 point promote. We went to 11 drop by 0.4 last year approximately. So if we went to 11.328 from 11.72, something like that. So I would definitely feel very positive in trend towards recovery. But maybe not 11.72 in one year, maybe two years. But yes, a definite uptick from 11.28 halfway maybe it’s too tough to say now. Yeah. But positively inclined towards increase in crashing from last year’s figure and positively inclined towards recovery.
Sanjay Manyal
So as we speak today the weather is conducive for us 100%.
Vivek Saraogi
But let two months pass.
Sanjay Manyal
Yes. Right. Right. And so my last question is on the pla. So as you have mentioned that you have been importing PL to sort of develop the market. So at what price or what would be the landed cost of pla and will in future that imported price will define the your realization for the product.
Avantika Saraogi
So actually we are not at liberty to disclose the figures like this due to NDAs and things that we have. But obviously we are since we are importing ourselves and we are doing everything. We are very cognizant of everything as we go. I sorry, I can’t give you too much of detail.
Vivek Saraogi
I’ll just try and put the basics on the table again. So the demand generation and the price would go hand in hand. We are hoping for a lot of mandates on the government which is in their sort of own thinking and within their own mindset. Maybe it’s from some departments which will eat up more than we can make and therefore it should be positively inclined towards the price. So we are hopeful on both sides our ability to produce and our ability to sell.
Sanjay Manyal
Perfect. Perfect, sir. Thank you. Thank you very much.
Vivek Saraogi
And you know the price, luxury, let’s say yesterday the price was lower than what we thought. Tomorrow it might not be. Maybe there are some, you know, government puts in some restrictions to sort of beef up the in Indian industry. So there are lots of things we are working on.
Sanjay Manyal
Right sir. Right. Thanks. Thanks for all that, sir.
operator
Thank you. Next question is from the line of Prashant Biani from Ilara Capital. Please go ahead.
Prashant Biyani
Yeah, thank you for the opportunity. Mr. Saraogi, what would be your view on any changes in SAP that may happen this year?
Avantika Saraogi
Yeah, so SAP is in all likelihood go up. Would go up. Sorry. We are thinking that, let’s be. I’ll be brutally honest, SAP might go for two years and that may not be all that bad if supported by the measures which we have spoken about, which I briefed On Sanjay Manial’s questions because a little help our pressing to work B that may be the need of the hour for the upcoming UP election and it will also. What is it? Yeah, it will give us a lot of raw material for our ethno and we are hoping see in a period of 10 years you don’t do go through a couple of years of you know, glitches.
So I’m hoping it’s a glitch. My evidence would be this year’s ethanol pricing. If it happens I would be delighted. And we hope that our recovery in two years will make up for cost increases.
Prashant Biyani
And slightly related question. The lower acreage of cane that we are seeing in UP is it a result of because the varietal change has happened from 0 to 38 to others farmers have seen lower yields on newer varieties and hence it is resulting in decline in their income. Is the lower acreage relating to that and any SAP increase can compensate for that?
Vivek Saraogi
Yes. Avantika.
Avantika Saraogi
So see it’s never just one factor right. For a whole state. So definitely this has a part to play. Secondly, people are trying to experiment with a different blend of crops a little bit to see how they can get a better realization. And definitely the SAP going up will increase the acreage back. I think the acreage has bottomed out for UP to be very hon. There does need to be a healthy balance of crops to see price of each and every crop. Otherwise oversupply of any crop is not good.
Vivek Saraogi
So I’ll just complete my thought on this. The idea is a variety also finds its own. It finds its yield, it finds the correct soil, the correct time to be planted. So how much ever we say until the farmer faces the brunt negativity and some see the fruits of positivity that I think is now let’s say 14201 is a beautiful variety. It must be planted at the correct time. So those who planted the correct time yesterday last year saw fantastic yields. So I think all these small experiments with SAP will definitely take our area UP and our payment and you know I’ll leave it there.
Prashant Biyani
Sure. And sir, one unrelated question mainly relating on the government side for any government to government exports which happen time and again. We hear exporting to South Asian countries and few other geographies. How does the sale happens actually and at what price does it happens? Is it through companies, governments buffer stock or through trader stock?
Vivek Saraogi
It won’t impact any sugar company. So you can let this question go.
Prashant Biyani
Okay, that’s it from my side.
operator
Thank you. Yes. Next Question is from the line of Nikhil Agarwal from Kotak. Non discretionary pms. Please go ahead.
Nikhil Agarwal
Yes, good afternoon sir. Just a quick question on the pla. We have seen earlier that many companies have used bagasse to make biodegradable paper products. While the products do look quite impressive, but the price point is where the demand gets impacted. My point being, do you actually see customers paying a premium for the product that you are making? Because in this case, in the case of biodegradable products, it did not. I don’t see that working out. I mean, you’ve given examples of Starbucks, but that’s fine. What about other users?
Vivek Saraogi
So I just want to remind you of one very simple thing, that our production capacity will be 80,000 tonnes and India’s consumption of plastic is 15 million tonnes. So first, let’s put that into great perspective. Secondly, the short answer to your question is yes, people will pay a premium where they see functionality and opportunity to create a better atmosphere if they don’t do it willingly. I think the governments and there are many big companies who want to, you know, lower their virgin plastic consumption unrelated to any government mandate also. So while I understand what you are saying, it doesn’t affect it when it is such.
It’s not even a drop in the ocean. So this question is not relevant in my mind, to be very honest.
Nikhil Agarwal
Okay, okay, got it. I’ll maybe take this up with you offline. Another question on the cane production. Just wanted some clarity for FY26. You said that it was 18% up compared to last year. It’s expected to be 18% up on an overall basis.
Vivek Saraogi
Yeah, we spoke about the country level.
Nikhil Agarwal
Right, 18%. And what about up.
Vivek Saraogi
We said would be flat?
Nikhil Agarwal
Okay, understood. That’s it for me. Thank you. Thank you, thank you, thank you.
operator
Before we move to the next question, a reminder to the participants to ask a question. You may press star and one. Next question is from the line of Shailesh Kanani from Centrum Broking. Please proceed.
Shailesh Kanani
And congratulations on the performance given that it was a low crushing quarter this time around. So my line got dropped in between. So apologies in case this question has been already answered. One is on our ppt. We have mentioned that the utilization rate of production capacities in bioplastics worldwide is 58%. So that number seems to be a little bit on the lower side. So can you highlight top reasons for the same and how our facility will be different?
Vivek Saraogi
Sorry, I didn’t understand your question. Could you repeat it please?
Shailesh Kanani
Sure, sure. So in our PPT we have mentioned that globally bioplastics worldwide capacity is somewhere in the range of 58%. Right?
Avantika Saraogi
Oh, okay. Okay, sure. Okay.
Shailesh Kanani
Yeah. So that, that obviously looks on the lower side. So. So what? Yeah, so what are the reasons for that and how would our facility would be little bit on the higher side or how we are going to tackle those hurdles.
Avantika Saraogi
So definitely 58% is on the lower side definitely. But I don’t think. Okay, so it is basically coming from China this thing. If we look country wise, I don’t think this figure is like this at all. China has one single facility of 300,000 tons which is not able to ramp up capacity is what I understand, not for want of a market but for want of their own internal technology or whatever those things. So I don’t think that this is the way to sort of look at this question. The market is definitely there. Globally we are barely 1% in bioplastics and PLA would be even like half of that.
So 0.5% of global consumption. So that’s one thing. And we don’t see this as a challenge arising. In fact we get more questions like, you know, when will you be able to supply us full so that we can change over full. State governments, central governments, everyone is looking to this. And like I was mentioning earlier also so you know, states like Kerala and Karnataka are pioneering their own PLA based milk package water bottles is that this is without any related to Balrampur’s efforts. So things are happening automatically as well. And they are in that case much more expensive at the end of the day than what we would end up being when we have the domestic production.
So we only. The only question we get asked when will your domestic production start? So that we may actually make a strategic shift. This is where we are coming from.
Shailesh Kanani
Just one clarification. In your opening remarks, ma’, am, you said that we would be 50% utilization within the first year. So I assume that is is 12 months, not that financial year FY27. Right.
Vivek Saraogi
Maybe hoping six months in that six months stabilization etc to ramp up.
Avantika Saraogi
To ramp up to maybe total 100% in six months is what we want. So we are. It’s too early to say more than.
Vivek Saraogi
Yeah, yeah, please, please let me attempt to answer the way I know best that is straight. It is something new. It is. Is it something alien to us? A lot of it is fermentation. So it’s not so alien. Our excellence has been lifetime in manufacturing. So we are hoping that with the best technology partners and you know Our watertight contracts. We should be able to deliver the quality of, you know, the level, the quality of PLA which is desired. We should do that. I don’t doubt that the efforts being put into marketing the license or the dialogues with the states and various departments of the center etc.
And the mandates are moving the right direction. So it’s, you know, if I’m an outsider, it’s a leap of faith on the management. So trust us and we should perform. But it’s something new for us also. But it’s not, you know, a shot in the dark. It’s a well researched, well thought out, well planned program.
Shailesh Kanani
Thanks, that’s helpful. Absolutely. We have confidence in the management of Valrampur to deliver this. Thanks for that, Ankar. So coming to our grain ethanol volumes this quarter, I think we have done highest in terms of quarterly run rate. So. And also I believe from the increase in real average realization we have done predominantly through. Maybe. So can you just kind of give some unit economics in terms of how profitability, availability and costing is for various feedstocks and how maize is looking at the current prices.
Vivek Saraogi
Going forward. Also for the period up to October before the start of the new season, we will predominantly do mage based. Only now to give a profitability indication on the basis of two months of performance is not the right thing. Maybe at the end of next quarter earnings call we will be in a better position to present that. The main reason why I’m saying this. It all depends upon the procurement price. Of mage in the next year. Right now we procreate everything. Yes. And just to tell you this will never move the needle for Balrampur. It is. It is good because it covers our fixed cost of the distill and gives you some money. So this is a good filler for our Mesa pool unit. Yes, well desired. But this is not a, you know, game changer either way for the company. Am I right? Maximum around 5 crores liter on an annual basis. So if you supply 5 crores and make 3 crores is 15 crores. Yes, it’s very welcome with the coverage of fixed cost. But that’s the. That’s the range basically.
Shailesh Kanani
Just. Just the reason I was asking is that because this is the first time we have seen those volumes. So. And in the past our commentary always been what you have highlighted. Right. It is not that a profitable route. So I was just wondering in case there has been a sharp drop in prices or we have got free stock. Yeah. So I thought I’ll just clarify that.
Vivek Saraogi
A very brief Short drop in prices. But you know, as businessmen we decide to procure when the price hits what we think may be the right price. And today if we go to buy, it’s more expensive.
Shailesh Kanani
Even if we are able to secure. The entire requirement of where do you keep it? That sell price of DDGS is extremely important.
Vivek Saraogi
Yeah, that’s. That’s because of so many distillees that earlier was. Let’s say when we began business of this grain, our DDGS price for rice was 26, 29. It went up 29. So today that is what? 19, 20, 18. And our main DDGs price is 15, 16.
Avantika Saraogi
And without bagasse as the energy source, it’s even worse. If coal is your energy source, then you are gone.
Shailesh Kanani
Yeah, fair enough. Thanks. Thanks for that clarification. And just last question from my side, I was little curious. I just wanted to confirm my understanding is right or not our net recovery numbers for the quarter. I know the question is very small and it is minuscule. But it was 11.38% versus 11.15% last year. Right. And last year diversion was kind of little limited. Right. So is it predominantly because. Yeah. So this. Predominantly because our facility in our earlier cause we had said has shifted from B to C. That the net recovery post diversion was a little bit on the highest at this time.
Vivek Saraogi
No, no. So any recovery figure we give you is apples to apples. So it’s reduced to C. So for.
Anup Pujari
Pre diversion this quarter we had 11.57 in the corresponding quarter of last year.
Shailesh Kanani
Right. Okay. Fair enough. Thanks a lot sir. And best of luck.
Anup Pujari
Thank you.
Shailesh Kanani
Thank you.
operator
Thank you. Next question is from the line of Kishan Parvani from GM Financial. Please go ahead.
Krishan Parwani
Yeah. Hi. Hi. Hi. Good afternoon and thank you for taking my questions. All good sir. All good. Hope everything from my side. First on the long term debt of PLA that you have raised 460 crores. It’s mentioned in the presentation that the repayment of this term loan will begin from 3qfy 29. So till that time there’ll be no interest outflow. Is that correct? And when will the 5% interest payment will start?
Vivek Saraogi
So the principal repayment would start as we mentioned in the ppt. But we are paying interest on a monthly basis. We will get the 5% interest subvention claim from the government of up after the commencement of our commission.
Krishan Parwani
Okay. After the commencement. Okay, got it. And just a continuation on the same. What’s our projected borrowing for FY28 and an interest outflow once PLA is up and running because I think you after you mentioned after the. So just wanted to understand that.
Vivek Saraogi
So this entire 1650 crores would be borrowed within FY27. FY27. Maybe 1500 crores within FY27 and 150, 200 crores in first quarter of FY28.
Krishan Parwani
Okay, fair enough. And I think Vivekji, you mentioned in your opening remarks and probably to answer to one of the earlier participants as well, did you mention that you expect the PLA plant to run an optimum utilization within one to one and a half years of commercialization starting October 26th?
Vivek Saraogi
I would be very disappointed if it took me one and a half years. One year.
Krishan Parwani
Okay.
Vivek Saraogi
I mean we’d be delighted to see six months.
Krishan Parwani
Okay.
Vivek Saraogi
Let me explain why. We have the world’s best people who have supplied globally and who have succeeded globally. Right. They are part of our process. There’s a watertight contract on their head. And plus we fancy ourselves as good manufacturers with sharp eye on detail, having done fermentation business all our life along, which is the distillery part, which is a significant portion of this business. So six months.
Krishan Parwani
Okay, that’s, that’s a great news, sir. And we are equally excited so that you know, ramp up, that’s fast. So in that context have you kind of internally planned for you know a phase two where because six months and then you know that that gives you a strong visibility for the going, you know, coming years as well. And also the enough cash flows of the capex that you are already putting.
Vivek Saraogi
In I, I our DNA personality is we focus on achieving one and then looking at the second. I don’t dream so much. I want to achieve and then dream. Having said that there is enough scope left in the plant to expand in this very layout and construction.
Avantika Saraogi
So of course when we have planned, we plan to go bigger but things are layout until we are able to do that, which is definitely the desire.
Vivek Saraogi
So as I said, have faith.
Krishan Parwani
We do have that for sure.
Vivek Saraogi
Putting best foot forward and let me just assure you, putting our best foot forward with the best possible people everywhere.
Krishan Parwani
Okay, noted, sir. And given, you know, with your expertise in fermentation and given, you know, for the polymerization you will also get lactic acid. So is there a possibility of exploring other chemical compounds? Is R and D already looking at it or do you intend to look at those possibilities in the future such as like propylene, glycol, etc.
Avantika Saraogi
Look, definitely the short answer is yes. The R and D team, you know, R D was a forgotten subject in and today it’s a hottest new topic. So I think we’re all over a lot of things. At first we are all over our existing process which is to upcoming and then all of the possibilities are definitely at, you know.
Vivek Saraogi
Good R and D team, internally external consultants, we are on the job.
Krishan Parwani
Great to hear that sir. And thank you Avantika for pitching in also. Thank you so much and wish you all the best. Thank you.
Vivek Saraogi
Thank you.
operator
Thank you. Participants to ask a question you may press star and 1. As there are no further questions, I would now like to hand the conference over to the management for the closing comments.
Vivek Saraogi
Thank you everyone. And I must appreciate the line of questions put forward this time by our investors. It delights me to hear such pertinent and to the point questions. Thank you very much for your understanding.
Avantika Saraogi
Thank you. Thank you.
Vivek Saraogi
Thank you very much.
operator
Thank you sir. On behalf of Balrampur Chini Meals limited that concludes this conference. Thank you all for joining us. And you may now disconnect your lines.