Small Cap Stock Under Rs 100: BCL Industries Wins LoA To Supply Extra Neutral Alcohol

Early Thursday trading saw BCL Industries' shares rise from an opening price of Rs 56.70 to an intraday high of Rs 58.14, putting the company in a positive position. With a market value of Rs 1,684 Cr, the stock was trading 2.14% higher at Rs 57.30 a share at 10:34 a.m. IST.

This indicates that the stock will attract investors on Thursday, but the reason for this is that the company entered a tender offered by M/s. Rajasthan State Ganganagar Sugar Mills Limited to supply Extra Neutral Alcohol (ENA), and on November 26, 2024, it received a letter of acceptance for supplying 60 Lac litres of ENA from its Bathinda (Punjab) distillery over the course of the following six months, with the option for the buyer to purchase an additional 50% of the said order.

"Previous order for supplying 53 Lac litres ENA was received on 12/02/2024 and by 30/11/2024 the Company will be completing the supply of approx. 80 lac litres to M/s. Rajasthan State Ganganagar Sugar Mills Limited," said BCL Industries in a stock exchange filing.

One of India's largest manufacturers of agro-processing products, BCL Industries has extensive experience in grain procurement. It is one of the top manufacturers of grain-based ethanol and has a significant presence in the ENA and IMIL segments. In H1FY25, the firm sold 8,52,341 boxes of PML and supplied ENA to major bottlers such as Pernod Ricard, Amrut, ABD, Mohan Meakin, and BCL. Since the company primarily relies on maize for ethanol production, BCL is setting the standard for using maize as a feedstock.

The company has a strong dealer network, with over 400 dealers dispersed throughout India's many regions. The company's largest fully integrated vegetable oil facility in India sets it apart from its competitors. Rapid progress is being made by the firm on the 75KLPD biodiesel facility in Bathinda, which will allow for complete vertical integration and improve value addition in the manufacture of ethanol. The main source of raw materials for this unit will be maize oil. With an average cash flow from operations of over 50 cr for FY2022-2024, BCL is well-positioned to meet its present and future debt obligations.

The company reported a consolidated net profit of Rs 30 Cr for the quarter ended in September 2024, which was 50% more than the Rs 20 Cr for the same period last year. Its operating income rose from Rs 481 Cr in Q2FY24 to Rs 746 Cr in Q2FY25, a 55% rise. The company's EBITDA margin decreased by 200 basis points to 8% from 10% in Q2FY24, while its EBITDA reached Rs 57 Cr in Q2FY25, increasing 16% YoY from Rs 49 Cr in Q2FY24.

In FY 24-25, the company anticipates that its 700 KLPD distillery will operate at full capacity and generate about ~ Rs1,750 crores in revenue. The company plans to phase down its edible oil business in FY 24-25 and aims to commission a 75 KLPD biodiesel facility within 12 months.