Balrampur Chini Mills Ltd
NSE:BALRAMCHIN
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Balrampur Chini Mills Ltd
Earnings Call Analysis
Q1-2025 Analysis
Balrampur Chini Mills Ltd
Balrampur Chini Mills is optimistic about the sugar production outlook for the upcoming '24-'25 season, projecting 32 million tonnes, which aligns closely with the Indian Sugar Mills Association’s (ISMA) estimate of 33.3 million tonnes. The company notes that the sugar production in Uttar Pradesh (UP) is expected to increase due to less sugarcane being diverted towards Gur and Khandsari, while Maharashtra and Karnataka may see a slight decline due to reduced rain and acreage. As of September 30, 2024, India is expected to have an inventory of approximately 8.5 million tonnes, indicating a healthy balance between production and consumption, which stands around 29 million tonnes.
The government is anticipated to maintain its ethanol blending program without restrictions this year, increasing flexibility on the Juice and B-heavy routes. This is a departure from last year's limitations and should stimulate growth in the ethanol sector. If projections hold, government announcements regarding sugar exports might be expected around January to February, as they usually wait for the full production reports before making decisions. If the government's plans facilitate a shift in blending percentages, an 18% blending target for the next year could lead to an additional INR 900 crores in revenues.
Despite some initial hiccups from a central government-imposed ban on distillery operations, Balrampur Chini Mills is now positioned for steady recovery and growth in this area. The company is seeing improved margins from higher sugar realizations due to increased volumes. Crushing days were reduced this quarter, leading to a dip in production but did not significantly impede overall operations, allowing them to remain efficient.
Balrampur has allocated around INR 300 crores towards their Polylactic Acid (PLA) project, which is expected to diversify its product portfolio and contribute towards sustainability goals. These expenditures are viewed as a strategic fit within their integrated operations, although they do not intend to expand into further capital-intensive projects shortly. Investments from this point will focus on balancing existing operations rather than diversifying too broadly.
Management expressed a positive outlook regarding sugar prices over the next year. They anticipate that lower inventory levels should support sugar price resilience. Regarding the Minimum Support Price (MSP) for sugar, management hinted at potential adjustments, clarifying that any adjustments should provide at least an INR 2 to INR 2.5 buffer above market rates in Uttar Pradesh. This bottom protection is expected to solidify the market in the upcoming colder months.
Looking to the future, Balrampur Chini Mills is evaluating opportunities in the sustainable aviation fuel (SAF) sector, with a 1% blending mandate applicable from '26-'27. While the infrastructure for large-scale production is still in development, the company is keen to capitalize on potential demand for ethanol in this new sector, acknowledging the gradual growth in this market.
A surplus of around 5 million tonnes is reflected within the current inventory outlook. The company aims to divert four million tonnes towards ethanol production, which should bolster sugar revenues by approximately INR 400 crores for the year. This operational strategy aligns with enhancing profitability while consistently engaging with government entities for favorable policies.
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Ladies and gentlemen, good day, and welcome to Balrampur Chini Mills Limited Earnings Conference Call. [Operator Instructions] 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.
Good afternoon, everyone, and thank you for joining us on Balrampur Chini Mills Q1 FY '25 Results Conference Call. We have with us today Mr. Vivek Saraogi, Chairman and Managing Director of Balrampur Chini Mills; Ms. Avantika Saraogi, Executive Director; and Mr. 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 with you earlier. I'd now like to invite Mr. Saraogi to make his opening remarks. Over to you, sir.
Good afternoon, and thank you, everyone, for joining us on Balrampur's Q1 FY '25 Earnings Conference Call. I trust all of you have had the opportunity to go through the results presentation, providing details of our operational and financial performance. As we initiate the call with an update on the current developments in the sugar sector, followed by the company's key highlights for the period under review. As per the latest estimates, India sugar production for the ensuing season that is '24-'25 is projected at 32 million pre-diversion. ISMA has given a projection of 33.3 million. We are just being a little cautious in our mind and giving this outlook of 32 million.
UP is expected to produce a little higher over last year due to lower-than-anticipated diversion of sugarcane to both Gur and Khandsari, which we feel is a factor of elections. In contrast, sugar production in Maharashtra and Karnataka is expected to decline slightly because of reduced acreage and inadequate rainfall last year, but current year's rainfall has been very encouraging. India's inventory on 30th September 2024 is expected to be around 8.5 million or 85 lakh tonnes, with domestic consumption of 29 million tonnes. Historically, government is comfortable to work with a closing stock of 5.5 million.
This ample inventory, together with the gross outlook, which we had projected would allow the government to continue the ethanol blending program unhindered on the Juice and B-heavy route, therefore, not putting any cap like was done last year. If all the above projections pan out, in the middle of the season, we are hopeful also that there could be export announcements as well. This is purely based on data and how government has reacted to these data in the past.
Moving to our business performance. We have commenced this fiscal on a steady note despite encountering challenges in our distillery operations due to temporary ban imposed by the central government last year on 7th December. The sugar segment, however, continued to perform well in a seasonally soft quarter benefiting from higher volume and higher realizations. During the quarter, our sugarcane crushing ended early leading to a decline in production, which also affected our distillery segment. The reduction in crushing days further contributed to under-absorption of fixed overheads.
To address, these challenges related to lower cane availability, we continue to actively engage with the farmers in cane development activities and varietal rebalancing. Additionally, a normal monsoon is expected to improve deals. We are making healthy progress in our Polylactic Acid project, which aligns seamlessly with our integrated sugar model. As pioneers in this field in India, we view this initiative as a natural extension of our long-term vision. As of 30th June 2024, we had approximately spent INR 300 crores from internal accruals on the project.
In closing, our commitment to sustainable value creation extends to optimizing every aspect of our operations, ensuring maximum value extraction from each stick of cane. The introduction of PLA project diversifies our product range and aligns with our global environmental goals and our honorable Prime Minister's goal by offering an environment friendly alternative to traditional plastics. Leveraging our integrated operation and strong financial health, we remain dedicated to deepening our relationship with the environment and enhancing operational efficiency. We should continue to invest judiciously and create value for our stakeholders.
I would now request Avantika to give you a brief update on the cane's business.
Good afternoon, everyone. Update on the cane development front. So I think I'll start with talking about the headwinds and the tailwinds that I see coming this crushing season. So I think it's already been highlighted a little bit, but we expect lesser diversion this year as compared to last year towards the unorganized Khandsari, kolhu crusher sectors. Other than this, the rainfall pattern is expected to be much better, contributing to overall productivity of the crop. The other tailwinds are that insect-based disease is quite under control. We worked very hard on it, whether it's stalk borer or red rot or any other small things, which have cropped up, so we are -- we can say that they are completely in a negligible scenario at the moment.
The other tailwind is the ratoon management has picked up. The closure of factory slightly earlier gave farmers the time to as well work on their ratoon crop, which is not usually the case when the factories go on until May. Other than this, the government of U.P. has made electricity for irrigation free in the month of March this year. The benefit of which, we will see during the coming crushing season. So the last time -- the last year, the rainfall during the [indiscernible] period was depressed; and this year, it has been good. Other than this because the government has made the electricity free and we are helping farmers even get electricity connections for irrigation, any lack of rain will be easily sort of supplemented by irrigation by farmers because they will not feel the pinch of it, which is what has always caused issues to us.
Even in the winter rain, the lack of winter rain last year took away a very large part of our plant cane yield, which this year should not be a problem even with rain, and also, if not rain where we definitely have our irrigation connection set up much better. Our tissue culture program is going on very well. We are on the key trial multiplication tracks. We are doing very good varietal balances with it. And it is all kind of on track.
Now about the headwinds, there are majorly two things: One is that the planting acreage was slightly lower due to the weather phenomenon that occurred last year. So the lack of winter rains and the delayed harvesting of the mustard and wheat crop led to slightly lower sugarcane planting because it was very, very delayed. And after a certain point, farmers don't want to plant, which is actually a good thing. And other than this, some of the planting was also slightly delayed. So I would say that about 2, 3 weeks of growth, so maybe 10%, 15% of our plant cane could have been affected. But I believe that the tailwind should outweigh the headwinds, but this is my best guess at the moment.
So another just a small supplement, Avantika, is that our recovery last year because of the variety, the recovery was in fine fettle. It was in top shape. So going ahead, we feel confident because of 238 not being there, the recovery should be in fine shape. And this time, we do not want to hazard a guess. And just to brief you about last tonne, UP's cane crushing was expected to be 1,100. And that was a summation -- summary of all the mills crushing, and UP landed up crushing 980. So there was about a 12% drop in the general expectation versus the actual crushing. And everybody participated in that downfall. Having said that, our projection of sales definitely, and -- but we were the only company probably, which was just 2% lower crushing than the previous year, but that's not to sort of tom-tom what failure we have done, but that has been a failure in prediction. Pramod, on to you.
Thank you, and good afternoon, everyone. I hope all of you had the opportunity to go through the results presentation that has been shared with you. So I request the moderator to open the call for Q&A. Thank you.
[Operator Instructions] We'll take our first question from the line of Sanjay Manyal from DAM Capital.
I have a few questions. So considering the fact that you have mentioned about the cane development, which we have done in the current season. What is the expected sugarcane crushing increase in the currency -- in the '24-'25 season?
We will restrain from making a guess this time because last time, when we did try to give the guidance, it didn't work out. But I've outlined our headwinds and tailwinds and I believe the tailwinds should outweigh the headwinds is all I can tell you.
So you see it is a very tough call. Let us attempt a better guess when we give you the September quarter results.
Okay. Surely, sir. Sir, secondly, if I see the expected country level production and whatever the inventory we are holding now at the country level, approximately 5 million to 5 million tonnes excess we would be having, which can be diverted towards ethanol or exports. So what could be the maximum ethanol diversion possible? And what quality as a whole, at a country level, ethanol production as possible with that kind of diversion?
Okay. I'll attempt to answer that because I think it will be playing on everybody's minds. So as you correctly pointed out, there is a 3 million excess stock in the inventory sitting as on 30th September. And pre-diversion because of 29 consumption and 32 production, there is a 3 million on the way. So you have a port surplus beyond 5.5 million, which is a [indiscernible] of 6.5 million. We expect that government should allow unhindered diversion of ethanol, and that would consume 4 million out of this. Definitely leaving for a headroom stroke space of 2 million for exports.
From this 4 million diversion promote, we will be able to produce 400 crores. So 400 crores of ethanol is what the sugar industry should be able to tender for the year in various centers. So if you see a total we should be able to tender as sugar 400.
Right, sir. And it means, at Balrampur, we'll be able to run our facility to the full?
100%. All Juice, all B-heavy, everything unhindered as per cost.
And sir, just last one, if it is possible to give a time line of this PLA investment over the next 2, 3 years. Means, as of now, we have invested INR 300 crores. What could be the investments as per the sort of annualized number, if you can share that?
So I can only tell you that because we are looking at commissioning in October-November '26. So it will be a gradual spend of money as CapEx gets spent in any project. So it's spanning over 2, 2.5 years from now. 2 years 3, 4 months from now. So it will get spent over that time probably. One can't say very evenly or not, but yes, the way the project goes. And we are tying up debt. It's all being done judiciously.
We'll take a next question from the line of Prashant Biyani from Elara Securities.
Sir, fortunately, sugar prices have been quite resilient despite overhang of high inventory. What is driving this resiliency in sugar price? And what would be your outlook on the domestic price?
So outlook on the sugar price remains positive because you very correctly pointed out if there is buoyancy with this inventory. We are seeing with the current government policy if you are talking 1 year from now, there will be a much lower inventory on 30th September 2025. So if both are allowed -- ethanol, we are very confident, exports should happen. So if both are allowed, then we will be sitting at a much lower inventory, which, therefore, by its basic fundamental construct tells you that sugar price should remain buoyant and firm.
And sir, what is the reason for this balance? Is it that the actual consumption is higher than reported or there is no inventory with the trade? Or what is the reason for this buoyancy?
So I would say probably expectation of the correct policy next year.
And sir, your outlook on the international raw sugar price?
Pramod, do you want to answer that? So international prices, if one can say, with India not being in the market over the last 1 year and I don't think Centre-South Brazil is going to give a real surprise upwards. So today's range, Pramod, is $0.18?
So it looks like it has hit a low of around $0.18, which should act as a floor. We don't expect the raw sugar prices to come down from here on. Going forward, it will depend upon the value of Brazilian currency as well as the dry weather in Brazil. It is expected that Brazil production in the '24-'25 as well as '25-'26 can be lower because of the declining yield. And if that plays out, then we are expecting an upward tick in the raw sugar prices.
So $0.18 should act as a floor. And very honestly, there is no great upside beyond $0.21, $0.22, but this is because you are asking us to reply. It is just a guess.
Right. Sir, while government -- I mean, the bureaucrats and all can have their own time to this, but is it worthwhile for industry to work with government to time the export with better realization internationally? Or you would want it to be immediate?
So let's be very clear. We are continuously working with the government on all the fronts that it unhindered ethanol [ policy ] diversion. Getting back to proper price in Juice and B-heavy, it was skipped last year and MSP of sugar, minimum selling price. So we are engaging very sort of deeply with the government with all data points. We are hopeful on all the fronts. Timing, et cetera, it's the government's prerogative, but obviously, ethanol price and ethanol quantity and MSP should happen before the announcement or before the cane begins crushing for the next season, which is October, November. Export, our view is, they would wait out the production and then allow exports. So probably Jan, Feb is the best case guess-estimate it could be allowed. But yes, that is our guess.
Correct. Lastly, sir, with respect to this PM JI-VAN mission for 2G ethanol projects, is there anything in it for private players, which makes it worth looking at maybe the benefit on CapEx support or ethanol pricing support for 2G ethanol? Anything for the private players in it?
We are not in 2G. We are not looking at that space.
Mr. Biyani, does that answer your question?
Yes, that does.
We'll take our next question from the line of Achal Lohade from Nuvama Institutional Equities.
Sir, just wanted to check in the presentation. You have talked about the price correction in the ethanol. Can you help us understand -- can there be a possibility of retrospective change in the ethanol price? Aren't those contracts watertight with respect to pricing and the volumes?
No. no. So we are talking of getting back to the old formula -- so okay, just let me put it this way. If last year had not happened, there was a particular formula playing out on -- there was no question of restricting any quality diversion. And there was a particular formula playing out, which was defining a relationship between FRP and ethanol's Juice price and FRP and B-heavy price. So we hope to get back to '22-'23 pricing regime, relationship regime, pricing regime, whatever is better. Like last year wiped out as a bad dream.
So you're saying basically for the upcoming contract, logically, there should be -- we should fall back to '22-'23 pricing regime rather than -- and treat the last year as an exceptional one?
Yes. That was because of election and people were perceiving a much lower production, and this government, while unhappy, I don't blame them completely.
Fair point, sir. The second question I had with respect to the ethanol blending in the diesel. Any comments you would like to make where are we in terms of that development at the industry level? Is it commercially viable already, technically viable? And how do you see the demand if it was to be viable?
That demand will be super huge, but they're still working with that dealers, that binder, that ethanol . They're still under work, WIP. So they've not yet crack the code there.
So when the code is cracked, I would think that the large scale implementation is probably what they are trying to crack.
Sorry, I am -- you're not very clear. You are saying they have been able to crack this and now they are trying for the commercial rollout?
I'm trying to say that as a lab, lab scale or a pilot scale, it is possible. But for large rollout for the whole country with that diverse condition, it's not as easy as you're making it sound, but it is possible. And if they have announced it, then definitely, they must have made some way forward in it.
We'll take the next question from the line of Shailesh Kanani from Centrum Broking.
Sir, just wanted to understand your expectations in terms of revision in MSP prices of sugar because we have been reading in reports and media reports that it is expected. So any time line or quantum if you can kind of highlight?
As I said in the beginning, there are 3 things we are working on: ethanol unrestricted quantity; correct ethanol price as somebody put it, '22-'23 formula; and MSP. So the logic is everything should happen before October because everything is applicable something from 1st November, something from 1st October types. So prior to that, we hope and we are working very hard and engaging with the government so that it should happen. Shipping in the middle of August and 1st October, timing is impossible. But we are very hopeful.
And any expectations on what number it can be? Because I think it has not been revised for the last 5 years now.
Yes, you're correct there. So we have again dealt with the formula there, and it's not appropriate for me to give any numbers here. So let's understand what MSP will do. So I'll tell you the logic of what MSP will do. So whatever is the MSP, let us take a figure of, let's say, 36.5, okay? Assuming that's the figure, U.P. makes a bottom of 39 because that is the lowest price from all over in India. So if Maharashtra sells at that price, U.P. sells typically INR 2, INR 2.5 higher. So even when you get into season and you see a crack in prices, which you always do, we should give you that much, much needed bottom protection during season, December, January, February, March. So that's a very positive step to give you protection during those 4 months.
He's not saying 36.5, it's...
No. I said, yes, it's 35, 36, 37, whatever it is. You get -- UP gets INR 2.5 bottoming above that. And one should look at this for bottom protection, not for top creation and which is upsell for me because it plays out 4 months in a year, that's 1/3 of your year.
Fair enough. That's helpful. Sir, I know you've refrained from giving guidance on cane annuity, but can you kind of help us because last year, I believe we got a negative surprise in terms up a guidance, but still, if you can use some kind of indication vis-a-vis last year, that would be helpful.
So I would only request you to let us maintain our credibility, which is very important in my eyes and all of our eyes. So let things clear a little better. Cane is a product. In last year, last 5% is vanished all over U.P. So if 5% vanished, it was 55 lakhs for Balrampur. So that 5% people are saying it's standing, it didn't come because the wheat was like of the standing crop of the last 20% just vanished very, very significantly. There's no winter rain. So it is impossible to guess, but we will give a better guidance in the month of whenever or September, October, November during the FY results. So please, please just respect our credibility in our eyes.
We'll take the next question from the line of Rishabh Gang from Sacheti Family Office.
Sir, what are your views on alternative or prospective application of ethanol, right, such as sustainable aviation fuel? When do you think blending of ethanol in this space is possible? And how much blending targets do you think is achievable in next 3 to 5 years in India? and how much ethanol demand can it lead to?
So again this SAF requires some special investment. It is not this ethanol, which we make for cars, which goes into the aircraft. So having deployed our capital into this PLA project, as Balrampur, we are not looking at any more CapEx. Just CapEx within our company for balancing, et cetera, which is essential. Rest, we are not looking at any CapEx. So we don't want to sort of burden ourselves with any CapEx beyond this account, neither do we have the mindset nor we want to deploy CapEx. Having said that, SAF will take some time.
3 to 5 years?
So the 1% mandate is applicable from '26/'27. There's supposed to be a 1% mandate applicable for SAF from '26/'27. And other than that, if the diesel blend 5% is realized, then that's huge because that would just be the regular ethanol. If you are talking about how much can be produced from crops in India, then that figure we have to study and come back, but there is definitely an upward projection, which can happen.
But this requires CapEx to put that ethanol into the aircraft.
No, I'm talking about diesel blend and petroleum blend can increase further.
Yes, that can increase.
Yes, so that would be the easier thing. The SAF '26-'27 mandate [indiscernible], then we will provide some incentives or some more guidance in that space for people to invest.
All right. I also wanted to know your views on the opportunity in biodiesel, compressed biogas market and biofuel dispensing station? What do you think about it? And does Balrampur Chini think of capitalizing on it?
So we are not looking at biodiesel at all. Biodiesel is more from waste oils, et cetera, at the moment, as far as I understand and not really from direct crop to biodiesel for that matter. So no oil-based seeds, maybe, et cetera. That space is something we're not looking at. CBG, as you probably already know, we have a contract with a company called, EverEnviro, for the production of CBG of our pressmud of all our 10 units. And then some of it is also going to the farmers for -- to replace FYM. So this is definitely something that is being looked at and it will probably keep moving.
So just to clarify your question, we are not going to invest any CapEx into either of these directions. We don't see -- we had earlier studied the opportunity. We don't find either large scale investable capital. We were not comfortable. We mandated to give it to someone else at a good price.
Got it. Just a last question. How much of our ethanol capacity is dual feed capacity, which can also take the grain ethanol?
So we have dual feed capacity at one of our distillery, which has a daily distribution capacity of 330 KLPD. So on an annual basis, in the offseason, it can produce around 5 crores to 6 crores number of ethanol out of alternative feedstock.
130 x 170 is 500. 10 plus 50. 5.5 crores is what you have.
Okay. So the capacity, which is only sugarcane-based, do we plan to upgrade it to dual feed capacity?
No, no. We will do our sugarcane business, and this is already invested and hence, we are 5.5 crores.
[Operator Instructions] Next question is from the line of Amit Kumar from Determined Investments.
I'm sorry I missed the India and the international sugar prices presently? I think you talked about it.
What is your specific question.
Sorry?
What is the specific question?
What is the domestic and international sugar price presently?
Domestic prices are around INR 38.5 to INR 39 in UP ex-factory. And international prices, we, as a country, are not exporting as of now. It is under restricted rules, but maybe white sugar export will fetch around INR 40, expected.
And the raw price is around $0.18.
It's around $0.18 -- between $0.185 to $0.19.
Sir, this is where I'm sort of not clear on the calculation. So $0.18 a pound translates to about INR 33, INR 34.
That is for raw sugar. And INR 40 is for the white sugar, refined sugar.
Refine sugar quote separately.
No, no. So that's where my confusion was because INR 33, INR 34, I mean, what is the point of exporting.
We can understand offline the detailed calculation. There is a specific calculation based on London whites.
We'll take a next question from the line of Priyanka Dhingra from SBI Funds Management.
I just wanted to -- since we were talking about the diesel opportunity and we understand that the diesel opportunity could be 2x the size of -- 2.5x the size of the petrol blending opportunity. I just wanted to understand if you've seen any regulatory movement towards increasing the refinery capacity in the ethanol space or any incremental bans on export to facilitate this entire process of diesel blending of ethanol?
I'll attempt to answer this. So let's take it in sequence. If there is an opportunity, government has to have capacity creation because at this capacity creation, 500-odd crores is what sugar can supply and maybe 500 grain can supply. So both will co-exist to get 1,000 crores, which is the need of 20%. Now if you want to take this 20% higher, you want to have more cane and more distillation, for which Juice gives the highest amount of ethanol per tonne of cane. If you want to encourage that, you have to put up more Juice distilleries. For this government has to come up with a plan, which motivates stroke, give enough return for people to invest. If all that happens, we'll definitely participate if there is a lucrative opportunity.
Diesel, right now we'll just wait a little more before we can give you some more confidence. But to handle diesel, you don't have ethanol right now. But yes, everything has an answer. If you see 2014, prior to this government and today, 10 years into this government thinking how has ethanol gone to this kind of figure. If you -- I again say forget last year as a bad dream. Discontinuity in policy, which was not only giving you sustainability, but visibility together. So when things again play out that way for future investment. So a, you have to get back to the old formula on the existing investment and give a new incentive for further distillation capacity. First part, we are hopeful by October. Second part, that's a future-looking concept, but for that, no export will be banned.
Priyanka, does that answer your question?
Yes, yes, absolutely.
Next question is from the line of Shailesh Kanani from Centrum Broking.
Sir, just wanted to understand your views on embargo on FCI rice from the government side. Any discussions or any outlook has changed? Also, on probability and price of maize, if you can give some color on these things?
So I'll -- Pramod, I'll attempt to answer this. You can give the numbers. So as I began in the beginning, if you heard the Food Secretary and all government officials, a couple of things have got clarified. One, there was a bit of a misnomer on cane being a water guzzler. So cane per liter of water delivers the highest amount of ethanol, one. Two, there is a concept, which the Food Secretary put forward of 50-50. So just assume 18% is the blending target for next year, which is the final step towards 2025 and 2026. So 18% next year, 20% thereafter. 18% would be equal to INR 900 crores. I said industry sugar doesn't look like being able to tender more than INR 400 crores. So grain can come in with 500, which looks not easy, but not impossible.
Let's say FCI rice is allowed. It may come and some more quantity of ethanol will get tendered. But a couple of clarifications, and no amount of grain tendering would crowd out sugar tendering. Grain tendering can happen if FCI rice is given and prior to year before last, there was a very clear relationship, you would get the opportunity to bid for tender. It would be called FCI rice tender for ethanol. You get back to back rice from FCI. That was the best method. Should they adopt it again, it would happen. On maize, currently, maize is at 72. So we don't know how the government will react to maize pricing. We do not get into that. We run our business.
So sorry, I was trying to understand the market rates of maize as a feedstock, and is the feedstock available for our near-term needs, that is our off season in second quarter?
It's high. Maize price, maize feedstock price is high. If you personally take our view, it is not very viable at current prices. It's in a tough spot because maize is not coming down. And if government is to raise the maize price, you can be very sure your [ maize ] price is going to be absolutely perfect. FCI rice would be a big help in this scene. We believe government is looking at it to answer your question.
Sorry to harp on this, just because last, I think, 2 or 3 quarters back government had come out with an SOP to procure maize and supply to ethanol producers. So any development on that front? Has it happened?
That was a program. [Foreign Language].
Nothing happened?
No.
Ladies and gentlemen, we'll take that as a last question for today. I now hand the conference over to management for closing comments. Over to you, sir.
Thank you, everyone, and we are all there to answer your questions, Pramod, me and Avantika should you have any.
Thank you, everyone.
Thank you, everyone.
Thank you. On behalf of Balrampur Chini Mills, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.