On a standalone basis, the net loss was lower at Rs.50.17 crore when compared to the consolidated net loss but higher than the Rd.45.65 crore net loss it posted last fiscal.
Despite the loss, company has declared a dividend of 60% at the rate of 60 paise on shares of face value of Re.1/- for 2007-08.
If one looks carefully, it becomes quite apparent that it is only due to forex loss and higher interest outgo in Q4, that the net loss has burgeoned. In fourth quarter ended 30th September 2008, the PBT of Rs.131.57 crore was due to forex loss of Rs.71.4 crore, which was earlier not booked due to non completion of capex. This apart, it also had a higher interest outgo of Rs.59.02 crore in Q4 against Rs.139.44 crore of FY08 on completion of capex,
UP government has recently announced SAP for sugarcane for season 08-09 at Rs.1,400 per MT. This year, lot of damage has been caused to the sugarcane crop in UP and hence mills are not likely to operate for more than 150 days in this season against, an average pf 180 days in the earlier years. So there would be mad scramble to purchase sugarcane by the mills even at a higher rate of more than Rs 1,400 per MT.
All this would give a great advantage to company, being the largest player. Due to lower estimated sugar production of India for season 08-09, at about 20 million tonnes, sugar prices will start rising from April 09, once general elections in the country happens and crushing in UP and Maharashtra stop. Sugar price can rise by about Rs 3 to Rs 4 per kg, after April 09, which will give huge advantage to the sugar mills.
Season 08-09 and season 09-10 is going to be excellent for the company and despite the loss, given the positive outlook for the sector, qualifies a good buy at the current rate of Rs.60.