Balrampur Chini Mills Ltd (BALRAMCHIN) Q3 FY23 Earnings Concall Transcript

Balrampur Chini Mills Ltd (NSE:BALRAMCHIN) Q3 FY23 Earnings Concall dated Feb. 13, 2023.

Corporate Participants:

Anup Pujari — Investor Relations

Vivek Saraogi — Executive Chairman of the Board, Managing Director

Pramod Patwari — Chief Financial Officer

Avantika Saraogi — Business Lead

Analysts:

Shailesh Kanani — Centrum Broking — Analyst

Sanjay Manyal — ICICI Direct — Analyst

Nikhil Gada — Abacus AMC — Analyst

Anupam Goswami — BOB Caps — Analyst

Rajesh Majumdar — B&K Securities — Analyst

Nishant Sharma — Nuvama Wealth Research — Analyst

Achal Lohade — JM Financial — Analyst

Chandramouli — Individual Investor — Analyst

Sandip Sabharwal — Asksandipsabharwal.com — Analyst

Presentation:

Operator

Operator

Ladies and gentlemen, good day and welcome to Balrampur Chini Mills Limited Earnings Conference Call. [Operator Instructions] I now hand the conference over to Mr. Anup Pujari from CDR India. Thank you, and over to you sir.

Anup Pujari — Investor Relations

Thank you. Good afternoon, everyone, and thank you for joining us on Balrampur Chini Mills Q3 and Nine Months FY ’23 results conference call. We have with us Mr. Vivek Saraogi, Chairman and Managing Director; Ms. Avanti Saraogi, Business Lead; and Mr. Pramod Patwari, Chief Financial Officer of the company.

We will initiate the call with opening remarks from the management, following which we will have the forum open for a question-and-answer session. Before we begin, 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 with you earlier.

I would now like to invite Mr. Saraogi to make his opening remarks.

Vivek Saraogi — Executive Chairman of the Board, Managing Director

Thank you, Anup, and good morning to everyone, and thank you for joining us on Balrampur’s Q3 Nine Months FY ’23 earnings call. I trust all of you have had the opportunity to go through our results presentation, providing details of our operational and financial performance. I will initiate the call with an update on the current developments in the sugar sector, followed by our company’s highlights.

According to the latest estimates from ISMA, Indian production is now expected to be at around 34 million tons, which was earlier forecast 36 million, 36.5 million tons. This is primarily owing to a lower crop in our lower yield in Maharashtra, Karnataka, and obviously this is accounting for our little higher diversion owing to sugarcane juice being diverted and be heavy towards ethanol production. Sugar production in Maharashtra is expected to decrease to 12 million from 13.7 million, U.P. is predicted to remain flat at 10.2 million, Karnataka is expected to decrease to 5.6 million, others outside these three major states shares about 6 million to 6.2 million, making for a total of 34 million tons. The government has already allowed an export of 6 million tons, and just to sort of set the balance sheet in order, opening stock, Pramod, would be about 5.5million tons, 34 million is our production, export 6 million, balance left over 18 million, consumption between 27.5 million to 28 million. Inventory at best could go up to 57 million — sorry, 5.5 million to 5.7 million. So we will probably end this season with an inventory which is similar to the preceding season.

On the business front — okay, moving on to the update on ethanol sector, most of you are aware, India has made remarkable progress in increasing the blend with the petrol ratio to 10%. Government has set a goal of 20% in ’25, ’26. E20 fuel at 84 retail outlets have been launched and this assures [Phonetic] certain move towards 20% blending. As you’re aware of how much interest and attention the Honorable Prime Minister is giving given to this program.

On the business front, the company’s results for the quarter were impacted by lowered sugar sales volume, and — that is owing to a lower quota, untimely rains in east U.P. and some delays for our new projects based on late supply of machinery have caused a late start, but in our area, we do not have any diversion of cane, so our initial testing estimate is our current estimate also. Maybe, we are seeing a marginal yield, which is better than what we expected. So, we should be able to close the season — I talking, Pramod, season. I don’t know the balance sheet, that you will give, at about 1,030 lakh to 1,040 lakh quintals of production, and we are hoping for a better recovery and the trend is already showing on C-basis, because that is the only barometer, because we have B-heavy and juice diversion. So, our C-heavy expectation of recovery this year is better than last — hopefully better than last year.

Coming to our distillery business, I am pleased to announce that Maizapur and Balrampur units have successfully installed the state-of-the-art distillery facility. Maizapur is working on a full-fledged 100% setup diversion, so not even a single bag of sugar is going to be produced in Maizapur this year. Balrampur is working on a two-third/one-third formula, and everything has been done as per our expectation. So, sugar capacity modernization Balrampur Babhnan, Balrampur distillery, Maizapur distillery, Gularia expansion was done last year. So the sum total of this is Balrampur would have a 1,050 KLPD installed capacity, which will allow us to produce 35 crore liters on an annual basis.

Pramod, this year we are targeting a production in the balance sheet — not in the balance sheet, for the sugar season, around 30 crore liters. So, this year we would be producing 30 crore liters, and next year with some enhancement of gain, which we are very certain of, we would be able to produce 35 crore liters. So, this would make Balrampur a major contributor and probably the largest supplier in terms of volume delivered to the OMC in the country.

In conclusion, we remain committed towards maximum returns from each stick of cane crushed, which has helped us generate sustainable value for the shareholders. As part of this commitment, I’m happy to inform Board of Directors declared an interim dividend of INR2.5 per share of INR1 each. Further, we initiated our sixth consecutive buyback, which has commenced on 16th November. As of 10th November — sorry, 10th February, company has bought back 4,55,723 equity shares.

So, with this, I hand over the mic to Pramod.

Pramod Patwari — Chief Financial Officer

Thank you, sir. Thank you and good afternoon, everyone. I hope all of you had the opportunity to go through our detailed results presentation that has been shared with you, wherein all financial performance, including quantitative data have been given.

To ensure that we have a larger portion of time for Q&A, I would like to request the moderator to open the forum. Thank you.

Questions and Answers:

Operator

[Operator Instructions] We take the first question from the line of Shailesh Kanani from Centrum Broking. Please go ahead.

Shailesh Kanani — Centrum Broking — Analyst

Good afternoon, everyone and thanks for the opportunity. Sir, till December the recovery numbers are very good. Can you give some latest update about the same? How has been the month of Jan and Feb till now on the recovery front?

Vivek Saraogi — Executive Chairman of the Board, Managing Director

So, extrapolating to C as I said in the beginning, at this point of time we have crossed last year’s recovery. The trend is obviously positive, but impossible to give you figures beyond that.

Shailesh Kanani — Centrum Broking — Analyst

Fair enough. Sir, second question was with respect to our crushing capacity. Given the availability of cane, if it’s not a constraint, what is the upper limit of cane which can be practically crushed in a quarter? I mean, can we crush say more than 600 lakh quintals because I think the last batch what we had done is around 590 lakh quintals in 4Q FY ’20. So, given the debottlenecking we have done, so what is the current maximum we can do in a quarter?

Vivek Saraogi — Executive Chairman of the Board, Managing Director

So while Pramod is calculating this, I’m going to reply to you on season basis. I’m going to reply to our ideal capacity or our ideal cane crush would be closer to 12 crores — between 11.5 crores to 12 crores quintals of cane. We are targeting about 1,040 lakh quintals this year, another 10 — another 1.5 crore quintals we can crush with this capacity.

Pramod Patwari — Chief Financial Officer

Shailesh, for the sugar season, 1,030 lakh quintals is what we have stated, and for the FY ’23 looks like between 9.25 crores to 9.5 crores quintals of cane.

Shailesh Kanani — Centrum Broking — Analyst

Okay. Sir, just some data keeping questions. Out of the total ethanol contract we have entered into 26.75 crores, can you give the breakup of pending volumes under different routes?

Pramod Patwari — Chief Financial Officer

Pending volumes?

Shailesh Kanani — Centrum Broking — Analyst

[Speech Overlap] would have done some shipment.

Pramod Patwari — Chief Financial Officer

That is given in the presentation.

Shailesh Kanani — Centrum Broking — Analyst

But that is pending volumes, so there are the total volumes under for FY ’23. I’m assuming that we have done some shipment in the month of December so those would be…

Pramod Patwari — Chief Financial Officer

We have given the breakup of 26.74 lakh in the presentation. Around 8.4 lakh on account of juice, 5.37 lakh is grain-based, 25 lakhs is C-heavy and rest is B-heavy.

Shailesh Kanani — Centrum Broking — Analyst

Okay. So those are from — so there is nothing going from the — that is helpful, 26.75 lakhs from Jan, but December [Foreign Speech]

Vivek Saraogi — Executive Chairman of the Board, Managing Director

[Foreign Speech] This is from 1st December.

Shailesh Kanani — Centrum Broking — Analyst

1st December. So that is the reason I wanted the breakup of that pending volumes if it’s possible to share. I can take it offline. Okay, I can take it offline. Sir, can you also give the split even between domestic and export quantity and realizations for the quarter?

Pramod Patwari — Chief Financial Officer

Realization we have stated in the presentation. Export was around 37 lakh plus and 6.5 lakh was around domestic.

Shailesh Kanani — Centrum Broking — Analyst

Sir, last question from my side. We are operating one of the biggest ethanol production operation facility in India, if I’m not wrong, right? So can you share if there’s any headroom for further expansion on that plant? Is there any scope for that?

Vivek Saraogi — Executive Chairman of the Board, Managing Director

So, good question. Depending on the availability of cane as I said, if we look to crop; we will align ourselves to this based on next year’s availability and then take a decision. Yes, there is scope to expand, put greenfield juice project, there is scope for everything.

Shailesh Kanani — Centrum Broking — Analyst

Okay sir, thanks a lot.

Operator

Thank you. Our next question is from the line of Sanjay Manyal from ICICI Direct. Please go ahead.

Sanjay Manyal — ICICI Direct — Analyst

Hi sir. Just one question on the varietal front. Is it now clear to say that the Co 0238 is a waning variety, and as we are changing our sugarcane variety in our catchment area, what would be the proportion of newer variety, and what it would be next season? And is it safe to say that the recovery in the yield would be similar to Co 0238?

Vivek Saraogi — Executive Chairman of the Board, Managing Director

Avantika?

Avantika Saraogi — Business Lead

So, good afternoon, everyone. Thank you for the question. About varietal balance, definitely it’s safe to say Co 0238 is a waning variety, and as we stand today, we are already in a very good varietal balance in ratoon as well as plant. We have four, five good varieties in the pipeline and any dependence on any single variety is completely reduced. So, any time we see anything happening, we are free to switch within the year itself. Having said that, if it is going to be four to five varieties, we would not ideally like to take any one variety more than 30%, between 20% and 30% depending on the conditions of any particular factory. That’s what I can say and even now this is underplay.

Vivek Saraogi — Executive Chairman of the Board, Managing Director

So, Avantika, his question was two-fold. I think he’s looking for the recovery impact on the newer variety versus…

Avantika Saraogi — Business Lead

Yes. So definitely, 0238 has become a benchmark for us, and we don’t want to go below it in any way. So, all the varieties that we are now constituting are good in terms of yield and recovery as compared to 0238.

Vivek Saraogi — Executive Chairman of the Board, Managing Director

So, if I may just take this ahead. The newer varieties which are in play, my personal view the recovery is slightly better and yield might be slightly lower. So to get our cane, we are looking to do better ratoon management and higher area under cane.

Avantika Saraogi — Business Lead

Sir, should I complete the thought on cane now?

Vivek Saraogi — Executive Chairman of the Board, Managing Director

Go ahead.

Avantika Saraogi — Business Lead

Okay. So, I just want to say that this crushing season, we have a 15% increase in cane availability. Next year also, as my dad was mentioning, we will increase cane further by another 5% to 15% depending on weather conditions. Last year we did very, very good ratoon management practices, which is usually where each rupee lags behind, and therefore, our yield and acreage of ratoon have increased this season, and the figures are absolutely coinciding with our plans and predictions. We have kept all insect pest diseases under control, and we are always vigilant so that nothing gets a chance to increase in our area and give us any serious hit. Also, our tissue culture lab is running on full capacity, and our healthy and pure speed distribution program has already begun from it. This will further help us maintain a good varietal balance and disease and insect free crops in the future.

Sanjay Manyal — ICICI Direct — Analyst

Okay. Just one follow up. You mentioned that recoveries are better than Co 0238 as of now. So, are you talking about the current status of recovery or the peak recovery we got in Co 0238?

Vivek Saraogi — Executive Chairman of the Board, Managing Director

I gave you a view on the current season, that as of today we have crossed last year’s recovery, as on 10th February let us say — on 12th February. The second [Speech Overlap]

Avantika Saraogi — Business Lead

I think his question is that 238 at its peak versus other varieties at its peak, correct?

Sanjay Manyal — ICICI Direct — Analyst

Right.

Avantika Saraogi — Business Lead

Yes. So, like I said, whenever we do any testing, we are benchmarking with 238 performance which we’ve enjoyed for such a long period of time. So, it’s like 238 at its peak business.

Sanjay Manyal — ICICI Direct — Analyst

Understood. And just I think last quarter we mentioned that our distillery volumes for the FY ’23 should be somewhere around 22 crores liters. Do you stand with that guidance or is there any change given the fact that late start of crushing?

Pramod Patwari — Chief Financial Officer

Yeah. Your question is extremely right. Because of the late start, we are revising it. Now our expectation is between 20.5 crores liters to 21 crores liters for FY ’23.

Sanjay Manyal — ICICI Direct — Analyst

Okay, okay.

Vivek Saraogi — Executive Chairman of the Board, Managing Director

Just let me put some more facts on the table because this will lead to reasonable doubt and put certain other questions. So we began, let us say, Balrampur distillery because of the late development after 15th of December. Sugar began after the 7th of December. Now, we were 20 days late at least in either or. Maizapur began in about 4th or 5th December, I mean my dates might be off by two, three days. So, these volumes have got shifted to next year, both the cane volume and the distillation volume. So, as we spoke, our crushing for the season remains unchanged, maybe 0.5%, 1% higher only. Our distillation volumes have been mentioned to you by Pramod, 30 crore plus slightly — between 30 crores and 31 crore probably. So, these two figures remain sacrosanct. Balance sheet, what doesn’t happen in March will happen in April.

Sanjay Manyal — ICICI Direct — Analyst

Right, sir. Just one last on the sales of bagasse, if it is possible for you to mention what would be the bagasse sale in nine months FY ’23 compared to last year and the income tax rate for FY ’23, ’24 and ’25? That’s it from my side.

Pramod Patwari — Chief Financial Officer

We’ll have to work out and tell you.

Vivek Saraogi — Executive Chairman of the Board, Managing Director

We’ll revert.

Pramod Patwari — Chief Financial Officer

Bagasse has sold at a much higher price than last year, if you take the quarter wise.

Sanjay Manyal — ICICI Direct — Analyst

Sir, I will take that offline. Thank you.

Operator

Thank you. Our next question is from the line of Nikhil Gada from Abacus AMC. Please go ahead.

Nikhil Gada — Abacus AMC — Analyst

Hi sir. Thanks for the opportunity. Sir, my first question on the crushing part itself and specifically for FY ’23. If we are doing 77,000-odd PCD per day, then this 9.25 lakh to 9.5 lakh quintal number that you have given, isn’t it a bit lower from FY ’23 perspective?

Vivek Saraogi — Executive Chairman of the Board, Managing Director

As I told you, if we began our season late, your FY ’23 reduces. If I had began on 20th [Indecipherable] and I have begun on, let’s say, 10th of January, that is the reason this is going to be lower this year.

Nikhil Gada — Abacus AMC — Analyst

Understood sir, got it, got it.

Vivek Saraogi — Executive Chairman of the Board, Managing Director

You have lesser number of crushing days in the current balance sheet in this period beginning November to March — November whatever to March end.

Nikhil Gada — Abacus AMC — Analyst

Understood. And from that perspective if we are saying that the yield or the crop yield will increase by another 3% to 5% in next sugar season, so that basically sort of helps us go back to the 110,000 or 11 crores sort of a number. Is that possible in the coming year or so?

Vivek Saraogi — Executive Chairman of the Board, Managing Director

Yeah. I think we’ve already explained 1,030 plus lakh quintal would we our crushing expectation this year. Avantika has indicated 5% to 15% enhancement next year. So, let’s say there is a 10%-plus enhancement next year, next year we’ll crush 11.5 crore quintals.

Nikhil Gada — Abacus AMC — Analyst

Understood sir. Got it, sir. Sir, secondly, just on the ethanol front. For 3Q I think in the presentation you have given the realization for C-heavy, B-heavy. Could you highlight the realization for sugar syrup as in sugarcane juice and grain based for the quarter?

Pramod Patwari — Chief Financial Officer

Grain based is 55.5 and that one is 65.61 tonnes.

Vivek Saraogi — Executive Chairman of the Board, Managing Director

So, let’s just be very clear. There is no need to ask any company in the country on these realizations. Anything which goes from juice is 65.61; anything that goes from B-heavy, 61.73. There are two types of rice, one is the full rice, one is the broken rice. FCI is the full rice that is 58.5 and the broken rice is 55.52. So, this is the realization of these products, whatever you’ve tendered, whatever you supply, each product’s price has been told to you.

Nikhil Gada — Abacus AMC — Analyst

Understood, sir. And generally, as of now for grain base, we are going to do it through FCI route, right?

Vivek Saraogi — Executive Chairman of the Board, Managing Director

Yes, largely.

Nikhil Gada — Abacus AMC — Analyst

Got it, sir. And sir, just my last question specifically again from the overall inventory perspective. And if I see the quarter numbers where the change in inventory is I think close to around INR230 odd crores in this particular quarter. Sir, if you can just break this up for us in terms of how much has been due to sugar and how much has been due to ethanol?

Pramod Patwari — Chief Financial Officer

This is already given in great detail in the presentation. We are holding around 15.85 lakh quintals of sugar and around 49 lakh liters of alcohol.

Nikhil Gada — Abacus AMC — Analyst

Sir, was there any major change from a quarter-on-quarter perspective in ethanol for this particular because I think we are going through juice route, so we might be storing more B-heavy molasses as of now and maybe using it?

Pramod Patwari — Chief Financial Officer

Whatever inventory we are holding; be it C-heavy, B-heavy, alcohol, sugar; all stated in the presentation. Slide 27, you will find all the details.

Nikhil Gada — Abacus AMC — Analyst

Okay sir, I will take this offline. Thank you so much.

Operator

Thank you. Our next question is from the line of Anupam Goswami from BOB Caps. Please go ahead.

Anupam Goswami — BOB Caps — Analyst

Hello. So, my first question is on the cost of production that we have seen, as my understanding goes, because we had a late start and a low volume, so that’s why fixed cost absorption did not take place. So, this will delay till April, and do we see a further extension of crushing days in April?

Vivek Saraogi — Executive Chairman of the Board, Managing Director

Yes, absolutely. So, we see a spillage and therefore a much larger crushing in the FY ’24 balance sheet than we saw in FY ’23 balance sheet in April and May.

Anupam Goswami — BOB Caps — Analyst

Right, right. And if we look at season wise, so now what the cost of production is at 41 or so, that will go down when this whole volume also picks up, right? Am I correct on that?

Vivek Saraogi — Executive Chairman of the Board, Managing Director

100%.

Pramod Patwari — Chief Financial Officer

You may refer Slide 22. Last year also the cost of production was INR4,100 at the end of nine-month period, which went down to INR3,400. So, Pramod and his team has taken great pain in making the presentation.

Anupam Goswami — BOB Caps — Analyst

Absolutely, sir. My next question on the strategy side, where do we see the mix of ethanol from all the sources, and given that what sort of margin are we looking at in the distillery segment?

Pramod Patwari — Chief Financial Officer

Margins will be a function of realization, which has been fixed by the Government of India on an annual basis. And if you are comparing the distillery margin which we achieved few years back, that is not going to be the case because in those years, molasses was practically sold at 0 value.

Vivek Saraogi — Executive Chairman of the Board, Managing Director

So, If I may add, Pramod, the entire business is to stay inside the company. It is a sectoral allocation, correct?

Anupam Goswami — BOB Caps — Analyst

Right, sir. I’m talking about excluding the transfer prices. If we look at excluding the transfer prices given my understanding, sugar juice has a lower margin whereas grain is also slightly lower than the C-heavy also. So where do we see in the mix now that we are doing sugar juice as well as grain base? Where do we see those margins compared to the last years or earlier years, excluding the transfer prices?

Pramod Patwari — Chief Financial Officer

Anupam, we have said again and again that this business needs to be seen from the totality perspective. The kind of realization which we are getting in sugar or we might get in future will be a function of how much of sugar is getting diverted into ethanol.

Vivek Saraogi — Executive Chairman of the Board, Managing Director

But even at the same time, see, it’s early days. It’s the first in the country kind of a distillery where no sugar is made. So, though we are tracking the data very closely, I’m pretty certain that at the end of the season the distilleries will throw off a pleasant surprise to what we thought. So, I’m not going to say that juice is going to be definitely lower than B-heavy or grain is going to be lower. So, it’s all work in progress, and we will see how things go.

Rajesh Majumdar — B&K Securities — Analyst

So, down the line, let’s say, in two years when we have an industry diversion also much higher. So, the vision is to have a higher sugar realization act like say 38%, 39% sort of and that balances out the whole.

Vivek Saraogi — Executive Chairman of the Board, Managing Director

Yeah, and if juice price government actually seriously interested in getting 20%, they will have to incentive from next year onwards. So, if that happens, more juice at a lucrative price means lesser sugar means a better sugar balance, etc. So, we remain structurally and fundamentally positive as we proceed into the future, both on the macro perspective and our Balrampur micro perspective. So, again, I’ll just take the audience through the philosophy of our company. Avantika has laid threadbare in front of you the kind of attention tissue culture lab, the kind of attention and the focus we are paying to cane. We have a centralized team which is out there and looking at all the 10 factories on a microscope basis. Our challenge is getting answered partly this year, and hopefully as we proceed it should be very beneficial.

So, if we are able to go up 15% this year, I don’t think any company, and this is my guess till now Pramod, any company will increase that much. As we proceed if we keep getting our cane which we are most certain we will, you will see how the business will flourish both in terms of volume, in distillation as well as sugar, and we’ll also be able to achieve economies of scale, fixed cost will get reduced. So, we think it’s very positive that whatever ethanol one makes will get picked up at good prices. As we proceed, prices keep getting lucrative. That also is a tailwind towards sugar, and sugar price with this — I would call this inventory bone-thin inventory. With this bone-thin inventory of 5.5%, I feel that our price realization from now up to October should also gradually trend upwards.

Anupam Goswami — BOB Caps — Analyst

Okay, sir. Sir, my last question is what is the price realization right now in Feb, Jan quarter?

Vivek Saraogi — Executive Chairman of the Board, Managing Director

35.5 ballpark currently.

Anupam Goswami — BOB Caps — Analyst

Okay, okay. Thank you, sir. I will turn back in the queue.

Operator

Thank you. Our next question is from the line of Rajesh Majumdar from B&K Securities. Please go ahead.

Rajesh Majumdar — B&K Securities — Analyst

Yeah, good afternoon, sir and, thanks for taking my call. I just had two questions. One is the Gularia expansion, sir. When will it be ready for us in terms of the sugar season?

Vivek Saraogi — Executive Chairman of the Board, Managing Director

Gularia expansion got commissioned last year.

Rajesh Majumdar — B&K Securities — Analyst

Sorry, Kumbhi, the one you recently announced.

Vivek Saraogi — Executive Chairman of the Board, Managing Director

Yeah, this could be ready and up next season, November ’23.

Rajesh Majumdar — B&K Securities — Analyst

So, sugar season ’23, ’24, it will be fully operational.

Vivek Saraogi — Executive Chairman of the Board, Managing Director

Full operational.

Rajesh Majumdar — B&K Securities — Analyst

Okay. And sir, my second question is more of a strategic kind of question. How long do you see the fixed pricing on ethanol to continue? Because beyond 20% blending, there’s still not much visibility in terms of flex fuel vehicles and so on. So, will this fixed pricing scenario for ethanol continue till eternity or there is something which can happen in between? And what is the kind of game plan as a company we have in order to counter that?

Vivek Saraogi — Executive Chairman of the Board, Managing Director

So, I would just begin by saying even life cannot continue in eternity. Having said that, basically let’s understand the dynamics. Today in this year, Pramod, I think we’ll struggle to go to 12% blend for the year, correct? As we proceed to take this blend upwards, you need juice diversion for which you need not only fixed pricing, but enhanced level of the current fixed pricing. I would call it incentivized pricing. So, to take you to 20% is going to be a task. To get to 20% is very tough, it’s not easy, trust me. You need lot more capacity in place. That’s first. So, to answer your first question that when government achieves 20%, will it dump you? So first of all, achieving 20% is three, four years away to my mind. Then when you achieve 20% and you have to be at 20% is not easy again. There’s one year suppose there’s a drought something, that again a challenge. Thirdly, I am very clear that the government is on this move for improving flex fuel vehicles. There is incentive, there is a PLI scheme, there’s a lot of work going on with the auto manufacturers. There will be hybrid vehicles, they have the flex fuel vehicles. Government is talking of, cooking gas. There’s going to be multiple usage government is thinking of. So, I would feel that this formula is here to live.

It’s also important for this to live because government of India earlier used to give export subsidy. Now if your production comes under control, that money does not leave the government hands. Two, this pricing is to ensure even cane price payment. So that also being the mandate of any vested government cannot go off the table. So, farmer is a very important part of not only our regional economy, but of the political capital of the country. So that again won’t go off the table. Three, this is paid for by the consumer, and today seeing crude and exchange prices, it is not a negative item for the OMCs. Four, it is improving the carbon footprint. Our honorable Prime Minister has given the details of the number of carbon credits or carbon footprint savings we have achieved owing to this. So, it is foreign exchange positive. So, with all these five factors in play, I don’t believe that your anxiety is my anxiety.

Rajesh Majumdar — B&K Securities — Analyst

Sir, if I’m permitted just one more question. If at all you take a decision to expand ethanol capacity further, would it be concomitant on the increase in the juice pricing or will you do it nevertheless?

Vivek Saraogi — Executive Chairman of the Board, Managing Director

So that’s very important. Economics is the reason why you would do business so we’ll wait and watch.

Rajesh Majumdar — B&K Securities — Analyst

Okay. Thank you.

Operator

Thank you. Our next question is from the line of Nishant Sharma from Nuvama Wealth Research. Please go ahead.

Nishant Sharma — Nuvama Wealth Research — Analyst

Thank you for the opportunity. One question from my side is more of a confirmation that the export sales during the quarter was 0.5 lakh quintal?

Pramod Patwari — Chief Financial Officer

Sorry, come again, please?

Operator

Nishant, if you are on a speaker phone, switch to handset, because we can’t hear you, and repeat your question.

Nishant Sharma — Nuvama Wealth Research — Analyst

Am I audible now?

Operator

Yes, go ahead.

Nishant Sharma — Nuvama Wealth Research — Analyst

Yeah. So just wanted to have a breakup of sugar sales for this quarter out of 20.26 lakh quintal to exports and domestic breakup.

Pramod Patwari — Chief Financial Officer

We have given that, 6.5 lakh quintals is the export and balance is domestic.

Nishant Sharma — Nuvama Wealth Research — Analyst

Okay. Understood. And out of our total quota of about 1.9 — sorry, out of our total exports quota, what is left which is yet to be delivered?

Pramod Patwari — Chief Financial Officer

So out of 1.98 lakh tonnes of export quota, we have contracted for physical export of 1.4 lakh tonnes. Out of that, 65,000 tonnes already delivered within March — sorry, within December and the balance maybe within March. And for the balance 58,000 tonnes of quota, we have exchanged with domestic release.

Operator

Do you have any more questions, Mr. Sharma?

Nishant Sharma — Nuvama Wealth Research — Analyst

Just one last question. Sir, what’s your view on the U.P. state advised price? Is there likely increase in that and when is this likely to be announced?

Vivek Saraogi — Executive Chairman of the Board, Managing Director

Your guess is as good as mine. Having said that, it should have been announced. It’s not yet announced. Our view is it should not increase, but that’s a very personal view. The decision should come within February, I hope.

Nishant Sharma — Nuvama Wealth Research — Analyst

Okay sir. I will fall back in queue.

Operator

Thank you. Our next question is from the line of Achal Lohade from JM Financial. Please go ahead.

Achal Lohade — JM Financial — Analyst

Good afternoon, sir. Thank you for the opportunity. Sorry, I’m repeating the question. You talked about exports. Is it 65,000 or 55,000; 65,000, right?

Pramod Patwari — Chief Financial Officer

65,000.

Achal Lohade — JM Financial — Analyst

And if you could help us with the realization as well, sir?

Pramod Patwari — Chief Financial Officer

Achal, we have said that export is 37 plus.

Achal Lohade — JM Financial — Analyst

Got it. And second, can you help us understand the cane mix in terms of varietal mix. Is it possible to get some more color as to how it is currently for sugar season at peak and in a couple of years’ time how do you look at the mix in terms of different varieties as we speak, whatever best guess we can have?

Vivek Saraogi — Executive Chairman of the Board, Managing Director

Avantika did give a broad heads up. It’s not possible to give you this data right now. We’ll have to wait for another year. But trust me, the hard work is going on and believe in it.

Achal Lohade — JM Financial — Analyst

Absolutely, sir. And sir, you, in a passing remark, you mentioned about cooking gas. Is it anything to do with the ethanol or it’s basically the biogas you’re talking about?

Pramod Patwari — Chief Financial Officer

Ethanol can be used for the cooking purpose also.

Vivek Saraogi — Executive Chairman of the Board, Managing Director

We are sharing the government mandate. The level of the government’s desire to sort of keep taking ethanol and keep building this, if I may say, fuel, as a very serious player in the total fuel mix. There’s experiment for mixing with diesel also going on. So, there is a lot of sort of consumption as we see the future.

Avantika Saraogi — Business Lead

Can I add to that? There is also a DG set being powered by ethanol, big research happening. Kirloskar, I think, is already making DG sets for ethanol driven. And as much of fossil-based carbon can be replaced by biocarbon, I think that is the way that the government is thinking.

Vivek Saraogi — Executive Chairman of the Board, Managing Director

Absolutely correct.

Achal Lohade — JM Financial — Analyst

Any ballpark number with respect to this cooking gas because this is something new, I presume [Speech Overlap].

Vivek Saraogi — Executive Chairman of the Board, Managing Director

So, if I may, first, you’re going to get to 20% there. So, we are talking of possible consumption points for new consumption areas. So, one must be fulfilled to go to the other I guess, but government is seriously contemplating.

Achal Lohade — JM Financial — Analyst

Got it. And just a last comment with respect to the E20, I know the government is pressing very hard. But what about the existing fleet? Can they really fill up E20 [Technical Issues] as you said 12% [Technical Issues]

Vivek Saraogi — Executive Chairman of the Board, Managing Director

Are you talking about existing vehicles?

Achal Lohade — JM Financial — Analyst

Yes, yes. Existing vehicles.

Vivek Saraogi — Executive Chairman of the Board, Managing Director

I think, 1st April ’23, all vehicles should be compatible to 20%.

Achal Lohade — JM Financial — Analyst

And what is the extent of work which is going on, do you think, that is likely or you feel like it’s too early to comment on it?

Pramod Patwari — Chief Financial Officer

Achal, not able to hear you clearly.

Operator

Can you switch to a handset mode and talk, please, Achal?

Achal Lohade — JM Financial — Analyst

Yes. Is it better now? Sorry about that. So, what I wanted to check about this E20 in terms of the existing vehicles. You’re saying that the mandate is to have all the existing vehicles ready for E20. Have I heard it right, sir?

Vivek Saraogi — Executive Chairman of the Board, Managing Director

From 1st April ’23, correct? Not the two-wheelers. Two-wheelers might be slightly lower, but four-wheelers 20%.

Achal Lohade — JM Financial — Analyst

Understood. And that preparation is on according to you in full scale, right? Because we haven’t heard as much about it. Okay. Got it. And with respect to the cane price, if you can give us some sense, have you seen this kind of a delay in the past or this is the first time you’re seeing cane price being announced in the month of February for U.P.?

Vivek Saraogi — Executive Chairman of the Board, Managing Director

It is rather late. I don’t remember having seen cane price this delayed. One year it was delayed. But how is that of relevance? You want to see the cane price, not the date?

Achal Lohade — JM Financial — Analyst

No, I’m just trying to get some sense. Okay. Sir, just last question if I may, with respect to as we speak, what is the increase in the cane crushing volume? I know you’ve already given the guidance, but just wanted to understand the number yesterday. How is the cane crushing volume in terms of YoY and the recovery rate on a YoY basis, if any number you could share?

Pramod Patwari — Chief Financial Officer

No, we would not like to share the number as of yesterday. For the quarter ended, we have already shared. We have already shared our vision or expectation for FY ’23 as well as for the complete season.

Vivek Saraogi — Executive Chairman of the Board, Managing Director

And we have given you a recovery trend, we told you we started late. There’s no point getting into daily figures.

Operator

Mr. Lohade, may we request you to return to the queue. There are several participants waiting for their turn. Thank you. We’ll take the next question from the line of Chandramouli, an Individual Investor. Please go ahead.

Chandramouli — Individual Investor — Analyst

What is the ethanol sales till now? I mean in the last nine months? You talked about the financial expectations is about INR21,000 crores, you have reduced it from previous INR23,000 crores. But what is that you have done till the last nine months?

Pramod Patwari — Chief Financial Officer

Nine months, we have supplied around 12 crores liters.

Chandramouli — Individual Investor — Analyst

Okay, okay. Thank you.

Operator

Thank you. Our next question is from the line of Shailesh Kanani from Centrum Broking. Please go ahead.

Shailesh Kanani — Centrum Broking — Analyst

Thanks for the opportunity again. Just wanted to know your thoughts on the budget announcement on CPG side. There are some incentives which the government has announced. Now I understand we have entered into a contract for [Indecipherable] but are there any plans, anything on the drawing board with respect to the changing opportunities on that front?

Vivek Saraogi — Executive Chairman of the Board, Managing Director

To be very honest, we have not seen very great opportunity. We are not looking at that side so much.

Shailesh Kanani — Centrum Broking — Analyst

Okay sir. That’s all from me. Thank you.

Operator

Thank you. Our next question is from the line of Sandip Sabharwal from Asksandipsabharwal.com. Please go ahead.

Sandip Sabharwal — Asksandipsabharwal.com — Analyst

My question is that companies like Praj have also talked of possible blending of ethanol with diesel using some agents, etc. So, have you heard of that and anything going on, on that front?

Avantika Saraogi — Business Lead

So, it’s called a binder. So Praj and others, I would say maybe it’s very close to completion.

Sandip Sabharwal — Asksandipsabharwal.com — Analyst

Because diesel is a much bigger market so that could open up much more opportunity.

Vivek Saraogi — Executive Chairman of the Board, Managing Director

Diesel is huge. So, I’m saying in diesel, even if there’s 2% blend in diesel, you don’t have the capacity. So, I therefore don’t worry on the consumption point. I’m not worried on the quantum the one produces, and there’s no doubt that whatever we produce will be lifted at attractive prices.

Sandip Sabharwal — Asksandipsabharwal.com — Analyst

Thank you very much.

Operator

Thank you. Ladies and gentlemen, that was the last question. I now hand the floor back to the management for closing comments. Over to you, sir.

Vivek Saraogi — Executive Chairman of the Board, Managing Director

Thank you, everyone.

Anup Pujari — Investor Relations

Thank you very much. We hope that we have been able to answer all your questions satisfactorily. Should you need any further clarifications or would like to know more about our company, please feel free to contact us. I once again thank you for taking the time to join us on this call. Thank you.

Operator

Thank you, members of the management. [Operator Closing Remarks]