00:00 Avantika Saraogi joins us now.
00:02 She's ED, Executive Director at Balrampur Chini.
00:05 That's one of the largest integrated sugar companies
00:08 in India.
00:09 Avantika, thank you so much for speaking with us here
00:12 on NDTV Profit.
00:14 Wish you and, of course, all our viewers
00:16 happy Women's Day in advance.
00:17 Great to have you here.
00:19 Let's start with a comment from you and a message
00:23 to women entrepreneurs before we move
00:25 to the business end of things.
00:28 Good morning.
00:29 Thank you so much for having me on the show.
00:33 I mean, a message to all the women out there,
00:36 not just the entrepreneurs, but the women who just
00:38 think that they can be something and someone more than whatever
00:42 is prescribed to be.
00:44 I would say go for it.
00:45 This is the time.
00:46 And this is where it will be respected.
00:48 And I think all the corporates, including ours,
00:51 is welcoming women with open arms.
00:53 So this is the right time to try and strive and reach
00:57 all your dreams.
00:59 I must ask you, I know you are generationally
01:03 from the family that runs the company.
01:06 But it is a space where you don't see too many women,
01:11 at least in the sugar industry.
01:13 I think you're more of an exception.
01:16 Do you think that it has been a tough task
01:21 to break that barrier and to ensure
01:24 that stakeholders in your industry
01:27 know that when you're speaking, you're coming from authority?
01:30 Were there any challenges you faced in this journey?
01:34 That's a great question, I must say,
01:36 because it's the same one I was asking myself before I joined,
01:40 that will I be taken seriously?
01:42 Will I be respected?
01:43 Will they really sort of understand
01:47 that I'm not just a woman, but I'm
01:51 talking from a place of know-how or power or whatever?
01:56 Will they accept the authority?
01:58 But I tell you that I think that I am one of the lucky ones,
02:01 because it was my grandmother who ran the business before my
02:04 dad did and not my grandfather.
02:06 So they were already used to seeing Madam G, if you may.
02:12 In fact, our sugar mills were earlier
02:14 called Madam Wali Sugar Mills in the areas
02:19 where they are in UP, because [NON-ENGLISH SPEECH]
02:23 Madam Wali Sugar Mill [NON-ENGLISH SPEECH]
02:25 because [NON-ENGLISH SPEECH]
02:27 So these kind of legacies that I have going for me,
02:30 and everybody sees my grandmother in me.
02:33 So that's a very, very big, I would say, tailwind for me.
02:36 So I actually never faced any issues.
02:39 You know, that's such a beautiful story, Avantika ji.
02:44 And thank you.
02:46 Hats off and ode, of course, to your grandmother as well.
02:49 Let me come to a bit about the business.
02:52 And the big headwind has been the FRM
02:57 that the government seems to have set.
03:00 That was a downtick for all sugar companies,
03:03 including yours as far as the stocks are concerned.
03:06 How much of an issue do you see this working out to?
03:11 The initial feedback has been that, don't worry,
03:14 you will have prices going up as well.
03:17 Your MSP is going up as well.
03:19 Though it will happen after elections.
03:20 Are you betting on that?
03:24 So I'll explain a little bit of the sugar scenario
03:27 so that you may understand at least Balrampur or any UP
03:29 mill position on this.
03:32 The FRP has been increased by 40 rupees for next season,
03:38 firstly.
03:39 It does not affect the season, which is currently running.
03:42 And secondly, UP runs on SAP.
03:47 For example, we are already more expensive
03:50 than the prescribed FRP of next year.
03:53 So it affects us absolutely zero,
03:56 which is what people need to understand,
03:57 that UP is completely unaffected by this uptick in the price,
04:03 because our cane price was already higher to begin with.
04:06 So this will affect Maharashtra, Karnataka millers.
04:10 But I don't think anyone is really
04:12 complaining because of the reason that you also said.
04:16 And plus, the ethanol program will be back on track
04:20 by next year, hopefully all things
04:23 as per what they are going now.
04:25 Ethanol program should be back on track,
04:26 and we should be absolutely fine.
04:29 There's absolutely no need to panic when it
04:31 comes to the sugar industry.
04:32 The government has, in 10 years, maybe
04:37 they have tried to regulate this industry 5%.
04:41 What we have seen historically versus this,
04:43 this is absolutely nothing.
04:45 And after the elections, I'm 100% confident
04:48 that the government will completely
04:51 bring back on track the ethanol program,
04:53 as well as the sugar prices will not be an issue.
04:57 Let me come to the ethanol portion of it.
05:02 Can you use sugar cane for blending?
05:03 Can you not use sugar cane for blending?
05:05 Give us an idea of what your outlook is on this,
05:08 because there's so many factors coming in,
05:10 in terms of sugar pricing internationally as well,
05:13 export caps as well.
05:14 How are you viewing this issue?
05:18 So everything is related.
05:20 It goes back to the crop.
05:23 If you have enough production in the country,
05:26 the government is very clear that firstly,
05:29 the consumption of the country must be met.
05:32 Secondly, the ethanol targets must be met.
05:35 And only then will they talk of export.
05:37 And I think this is the right approach.
05:39 This is the approach that as a company,
05:41 even we would want them to take.
05:43 We are committed completely to the growth of our nation
05:47 versus just making some profits or money on the side.
05:52 So even though sugar is trading at like 46 rupees X mil
05:56 for export, we would rather still have the ability
06:01 to make ethanol rather than export sugar at this moment,
06:05 because the government is very, very balanced
06:07 when they come to that approach.
06:09 So let's come back to the point.
06:11 The reason that all of this regulation came in
06:14 was because of the El Nino effect,
06:17 which they thought would last for two years.
06:20 Now already the El Nino effect is weakening.
06:22 As you know, it's kind of raining all across
06:24 the north of the country a little bit also,
06:26 maybe in Maharashtra, Karnataka side,
06:29 which in El Nino, it does not happen.
06:31 So El Nino is already weakening.
06:33 La Nina is supposed to set in in June, July at the latest.
06:37 If this is happening, which is quite certain, I would say,
06:41 in this case, the crop production will again be up
06:45 and everything will be back on track.
06:47 We will have enough sugar for domestic consumption.
06:51 We will have enough sugarcane for ethanol blending,
06:53 and we might even still have something left over to export.
06:57 And if you see two years down the line,
07:00 we will definitely have enough sugarcane for all three.
07:02 - Avantika, good morning, Neeraj,
07:06 and happy Women's Day to you and everybody,
07:09 all female members in the Balrampur family.
07:11 Just one question, I was intrigued by your response
07:13 to the changes in the regulation.
07:16 So I understand that it's for the next season,
07:18 not for the current season,
07:20 but that regulation still stays, right,
07:22 until the government changes it.
07:23 So the earning impact for FY25 would still be there
07:28 because the second half of FY25,
07:31 which will be the sugar season for you,
07:34 will see the impact unless the regulation gets changed,
07:37 right?
07:38 - So I think I'll make myself more clear.
07:40 UP millers are unaffected by this rise in FRP.
07:45 - FRP notwithstanding, the diversion of ethanol,
07:47 sugarcane, et cetera, that one.
07:49 I understand you are on SAP, so that will not bother you.
07:51 - Yeah, it won't, yeah.
07:53 Sorry, so can you say that again?
07:54 You're asking me about the ethanol blending program?
07:56 - Yes, yes, yes.
07:58 - Okay, so you're talking about the FY25, the balance sheet?
08:03 - Yeah, so what I'm saying is,
08:04 if you're saying that these moves will have an impact
08:09 in the new sugar season, hypothetically,
08:12 in which case it still impacts the second half of FY25,
08:16 which will be April to March
08:18 from an accounting year perspective, right?
08:20 So there'll be an impact on FY25 earnings.
08:22 - Yeah, so I'll explain a little bit,
08:24 at least how Balrampur is looking at it.
08:26 So we have as well a grain bay, a dual feed distillery.
08:30 So that is already running on maize as of now.
08:35 You know, it's running on sugar
08:37 and it's running on maize in the distillery section.
08:40 So a company like ours actually has a lot of flexibility
08:44 wherein we may not have as large an impact
08:48 on the H1 of FY25 as others might,
08:52 because we have a lot of flexibility and moving parts.
08:55 I would say that, yes, definitely our distillery capacities
08:59 would be underutilized
09:00 for the first half of the next financial year.
09:03 But if the sugar, you know, the sugar prices should hold
09:07 and I think in totality, honestly,
09:11 I haven't thought about the impact on H1 of FY25,
09:15 but it shouldn't be very bad
09:17 because we have had a higher crush
09:20 and we have had higher recoveries.
09:22 So all in all, I'll tell you,
09:23 it's actually a good season for Balrampur.
09:28 We've grown in cane crush by 10%
09:31 and the recoveries are also looking much better.
09:35 - Just last word from you, Avantika ji,
09:37 what do you see the recoveries looking at?
09:39 And I just wanna go back to your comment
09:41 that you'd rather, you know, work on ethanol
09:44 or focus on ethanol and exporting sugar.
09:47 As a proportion of revenue,
09:50 do you expect ethanol to increase significantly?
09:52 Can you give us some outlook there?
09:54 - So we have a capacity wherein we can have
10:00 around 30% of our revenue from ethanol.
10:03 That's how it is laid out.
10:06 Of course, it will not play out that way
10:08 for this coming calendar year,
10:13 but other than that, it should happen.
10:16 I think we have 32 crore liter capacity for ethanol.
10:20 (upbeat music)
10:22 (dramatic music)
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