Balrampur Chini Surpasses Expectations: Target Price Raised to Rs 524 by Centrum Broking

Centrum Broking has recommended buying shares of Balrampur Chini with a new target price of Rs 524, citing strong performance in the first quarter of FY25. The company’s revenue grew by 2.3% year-on-year to Rs 14.2 billion, slightly higher than expected. The profit for the quarter was Rs 702 million, beating estimates of Rs 648 million.

Balrampur Chini’s sugar segment performed well, with revenue up by 1.4% to Rs 11.3 billion, while the distillery segment saw a decline in revenue. The company’s strong sugar margins and better-than-expected performance led to an increase in earnings estimates and a higher valuation.

Additionally, Auxilo, an associate of Balrampur Chini, is raising Rs 279 crore by issuing convertible shares, which will slightly reduce Balrampur Chini’s stake in the company. Looking ahead, Centrum Broking expects positive developments in the sugar sector, including stable prices and increased ethanol production. However, they also note risks like falling sugar prices or delays in government benefits.

Centrum Broking maintains an “Add” rating on Balrampur Chini with a revised target price of Rs 524.