BCL Industries Announces Expansion Plan On Aim of Revenue Boost, Stock Gains

BCL Industries announces expansion plan of group's distillery to 850 KLPD in next 2 years, stock gains

Leading distillery industry player BCL Industries has announced plans to expand its capacity in an investor presentation on BSE. The filing said that the group has plans to take up the overall production capacity to 850 KLPD in the next 2 years amid rising demand.

"BCL Industries has plans to take up the total group distillery capacity to 850 KLPD over the next two years," it said in a statement uploaded on exchanges.

On the expansion plan at its West Bengal plan, it said that the company looks to capitalise on the ENA supply-demand deficit scenario of North-Eastern India and it has installed 200 KLPD state-of-the-art ENA plant at Kharagpur. The plant has been set up under its subsidiary Svaksha Distillery Limited.

"After stabilizing the operations of phase 1, the company started phase 2 wherein additional capacity of 100 KLPD is being installed," it said, adding that the company has received the necessary clearances for expansion and has placed all major machinery orders.

It expects to commission this expansion by December 2023 with a project cost of around Rs 90 crore, the statement added.

On expansion at its Bathinda plant, the said that it has already commissioned its 200 KLPD ethanol dedicated plant in July. The total cost of the project was around Rs 205 crore.

"It should give the company revenues of around Rs 550 crore per annum," the statement said.

Meanwhile, to hedge against the rising fuel costs, BCL has also commissioned a boiler fired on paddy straw along with its 200 KLPD ethanol plant at Bathinda. This will help in diversifying its fuel needs as paddy straw is one of the toughest biomass to utilize and hence very few buyers for paddy straw.

"This boiler qualifies for the state government scheme in which SGST on the capex of boiler will be refunded. The CAPEX on this boiler was around Rs 40 crore," it added,

BCL Industries is one of the largest grain-based manufacturers of Extra Neutral Alcohol (ENA) and ethanol in India.

Its shares on Thursday gained over 2 per cent to touch the day's high at Rs 502. The stock is less than 10 per cent away from its 52-week high of Rs 534.50.

Deven Mehata, equity research analyst, said that BCL Industries shares on chart have bounced from a strong support of Rs 440 which is close to its 200-day EMA levels. A breakout above Rs 530 will take the stock towards Rs 680-700 levels.

"On daily charts the stock is showing strength where RSI is comfortable at 62 levels. The stock is trading above all the important moving averages. On a smaller time frame a smaller resistance is witnessed around Rs 510 levels. If stock sustains above the mentioned levels it can further move towards the all-time high levels of Rs 530 and above," he said.

"Investors holding the stock from lower levels should hold for a longer time for the target of 680 with a trailing stop loss of 440," he said, adding that short-term traders can hold for the target of Rs 530 with a trailing stop loss of Rs 475 which is also close to its 20 and 50 Day EMA levels.