EID Parry India Limited — Investor Meet, 18-02-2025: Analysts/Institutional Investor Meet/Con. Call Updates

**Financial Performance:** E.I.D.-Parry (India) Limited reported a consolidated revenue of INR 392 crore for the quarter, down from INR 435 crore in the previous year, primarily due to a focus on the retail segment and reduced sales quotas. Sugar production decreased to 1.08 lakh metric tons, down from 1.5 lakh metric tons year-over-year, with an overall cane cost increase to INR 3,899 per metric ton. The company's consumer product group recorded a turnover of INR 236 crore, reflecting over 70% growth. The distillery segment saw significant improvement with ethanol sales reaching 304 lakh liters, resulting in revenue of INR 290 crore, compared to INR 177 crore last year. Despite this growth, the overall profitability reflected operational challenges, resulting in a loss of INR 18 crore in the refining segment due to lower sugar prices and margins, against a profit of INR 17 crore in the same quarter last year.

**Future Outlook and Growth Drivers:** Management reiterated their commitment to strengthening the standalone business and capital allocation towards the ethanol blending program and consumer products. They remain optimistic about improved recovery rates in sugar production, anticipating operational efficiency enhancements and a stronger policy framework that could stabilize profitability. They foresee a continued increase in ethanol blending as a growth area.

**Order Book and Operational Updates:** The company has effectively managed its sugar cane crushing in Karnataka and Andhra Pradesh, shifting operations in Tamil Nadu to Q4 to maximize efficiency. Crushing operations have yielded better recovery rates, though overall tonnage is expected to be lower than the previous year.

**Analyst Q&A Insights:** Analysts raised concerns about revenue projections and profitability, with management emphasizing ongoing operational challenges. They acknowledged competitive pressures in the market, especially regarding sugar prices, which are expected to remain robust given the current supply-demand dynamics. There was cautious optimism regarding policy support for sugar MSP, although timelines are uncertain. Capital allocation discussions are ongoing, especially concerning strategic partnerships for the refinery and continued investments in the consumer segment.

**Market or Regulatory Updates:** The recent export quotas and pricing adjustments for ethanol have been positive developments. Analysts pointed to the expected increase in sugar prices driven by production reductions and strong demand.

**Strategic Focus Areas:** Management plans to enhance operational efficiencies, particularly in the consumer product segment, and is strategically focusing on expanding branded offerings while exploring partnerships to strengthen the refinery business model.

**Investor Insight:** The financial health presents a mixed outlook. While growth in consumer products and ethanol segments is promising, the challenges in the sugar market and refinery operations warrant cautious positioning. Investors might consider maintaining their current positions while closely monitoring upcoming quarter performances and market dynamics.