Uttam Sugar:
UTTAM SUGAR MILLS LIMITED:
A Sweet turnaround story:
Incorporated in 1993, Uttam sugar mills manufacture sugar, industrial Alcohol and does bagasse-based co-generation.
USAGE:
1. Consumer usage: Liquid sugar, caste sugar, Icing sugar, sugar white cubes, Sulphur free bu
ra etc.
2. Industry usage: Pharma sugar, double refined sugar, inverted sugar syrup and plantation white sugar.
Key highlights:
1. One of the most prominent players in refined sugar, pharma sugar and retail branded sugar.
2. Sales mainly to institutional players resulting in higher realisation of 0.5 to 0.75 Paise /kg.
3. The company has reduced debt significantly. As of 05.06.2024 term loan is 895.47 cr, and working capital loan is 27 crores.
4. EPS of Rs.34.70 /- for FY24.
5. The Uttarakhand plant has three advantages:
1. The co-generation plant gets a higher rate of Rs.5.20/unit compared to Rs.3.20/unit for plants in UP.
2. For molasses there is zero levy compared to the 18% levy in UP.
3. Sugar prices are higher by Rs. 0.5/ kg.
PRODUCTION CAPACITIES FY24:
Company has 4 manufacturing units with a total installed capacity of sugar crushing ~ 26,200 TCD, Distillery capacity of ~ 300 KLPD, and a power capacity ~122 MW.
PRODUCTION AND VOLUME FY24:
1. Sugar division:
Sugar production: ~ 42.50 lakh quintals
Sugar sales: Domestic ~40.49 lakh Qntls.
Sugar sales: Export ~0.01 lakh Qntls.
2. Power division:
Power export ~ 1374.14 KWH.
3. Ethanol division:
Distillery production ~683.26 BL
Distillery sales ~ 652.83 BL.
ACQUISITION:
The company proposed acquiring a majority stake of 58.33% in Uttam Distilleries Limited (UDL) which operates 40 KLPD grain-based distillery, for around Rs.35 crores. Rs. 13.10 crores were invested in FY24 and the remaining Rs.21.90 crores will be infused in FY25 from internal accrual. The acquisition will be concluded by October 2024 and UDL became a subsidiary later,
Brownfield expansion:
Khailkheri Unit existing capacity 4700 TCD
Utilization 100%
Proposed addition 800 TCD
With an excellent location, one of the highest capacity utilization, scope for further expansion, full steam saving technology, expansion in distillery capacity, one of the most significant branded sugar players, diversification in high margin pharma sugar,65% of production comes from high margin refined sugar, strong balance sheet and above all one of the highest recoveries in UP makes this company a very attractive buy.