BCL Industries Limited (524332) Earnings Call Transcript
February 10, 2021
Earnings Call Speaker Segments
Ladies and gentlemen, good day, and welcome to the Q3 FY '21 Earnings Conference Call of BCL Industries Limited hosted by PhillipCapital India Private Limited. This conference call may contain forward-looking statements about the company which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] I now hand the conference over to Mr. Vikram Suryavanshi from PhillipCapital (India) Private Limited. Thank you, and over to you.
Thank you, Rupriya. Good afternoon, and very warm welcome to everyone. Thank you for being on the call of BCL Industries Limited. We are happy to have the management of BCL with us here today for question-and-answer session with the investment community. The management is represented by Mr. Rajinder Mittal, Managing Director; Mr. Pankaj Jhunjhunwala, Director, Svaksha Distillery, which is a subsidiary of BCL; and Mr. Kushal Mittal, Joint Managing Director. Before we start with the question-and-answer session, we'll have opening comments from the management. Over to you, sir.
Thank you for the introduction, Vikram Ji. Good afternoon, everyone, and we would like to welcome you to the earnings call for the third quarter of financial year 2020-21. For the ones who are participating for the first time, let me give you a brief background about the company. BCL Industries Limited is a diversified house in manufacturing and development with business interests spread across a variety of industry verticals, namely edible oil and vanaspati, distillery and real estate. The company started off in 1976, with a small solvent extraction plant of 40 tonnes per day, extracting oil from rice bran. Going forward, the company has grown to become one of the largest edible oil manufacturers in North India, having a total capacity of 1,020 tonnes per day. Furthermore, we forayed into the business of distillation by setting up our own grain-based distillery of extra neutral alcohol of 100 KLPD along with the bottling plant in Bhatinda. The capacity of distillery was later double to 200 KLPD as the business grew. In order to grow our distillation business, the company is now installing a state-of-the-art distillery of 200 KLPD with 8-megawatt cogeneration power plant in Kharagpur, West Bengal. The company expects to start to commission the plant by quarter 3 '21-'22. Currently, as you all know, of the escalating COVID-19 situation, we are in compliance with all government directions and top priority is safety and well-being of our workers. Now let me give you key financial highlights for the first 9 months. The consolidated revenue for the first 9 months were at INR 1,004 crores, which was increased by 44% year-on-year. EBITDA for the quarter was at INR 59 crores -- for the 9 months was at INR 59 crores, which is a 20% increase year-on-year. EBITDA margins were at 5.9%. Net profit was at around INR 29 crores, which is a 29% increase year-on-year. And PAT margins for the company were at 2.88%. So now specifically about the quarter, the consolidated revenue for the third quarter was at INR 401 crores, which is a 50% increase year-on-year. EBITDA for the quarter was at INR 22 crores, which is around a 38% increase, and EBITDA margins were at 5.45%. Net profit for the quarter was around INR 10 crores, which is a 20% increase year-on-year, and PAT margins were at 2.52%. Coming on to the operational highlights. For the third quarter, I would like to start off with the Distillery segment. BCL Industries continues to be one of the largest supplier of grain-based ethanol in the nation with a tender to supply 4.5 crore liters of ethanol in the sugar year 2021. The distillery unit had a decrease in capacity utilization and sales due to mechanical issues. The company has filed for insurance claim for the loss of profit and hopes to receive the same. We're expecting great demand in both ENA and ethanol and hope to capitalize on it as we have resumed full capacity utilization of our distillery unit. With the prices of ethanol also being revised to INR 51.55 for the sugar year 2020-'21. The company forecast greater quantity of ethanol being tendered by all distilleries, resulting in better margins for ENA. With regards to the Edible Oil segment, the company has experienced a significant increase in the demand for its own brands, Murli and Homecook. Due to the government's focus on the promotion of indigenous edible oils, the company hopes to use this momentum, increasing market share and sales in the coming quarters. The revenue of the Edible Oil segment for 9 months were at INR 657 crores with an EBITDA of INR 17 crores. Lastly, the Real Estate segment went through a temporary slowdown for the period of lockdown, but the company expects sales to pick up in the coming quarters. The company recorded a revenue of around INR 16 crores with an EBITDA of 5.18% for the first 9 months. And in trying to reduce the financial burden of the company, the company continues to utilize its revenues from real estate to liquidate the debts. Thank you. I will now open the floor for questions.
[Operator Instructions] The first question is from the line of [ Dipesh Sancheti ] from Manya Finance.
Congratulations for having such great results. Now the first question was actually that why the Distillery business has underperformed in quarter-on-quarter as well as year-on-year? And I think you just answered about having some mechanical issues. I just wanted to know how much is the insurance claim, which we have filed for?
Yes. So the shutdown, there was a partial shutdown in the Distillery for a month due to breakage in one of the machines, one of very essential machines. So the loss of profit that we have filed for is around INR 2 crs, and we've also filed for another insurance claim for the machinery, which is at INR 50 lakhs. So we hope to receive both of them soon.
Okay. And what is the current situation? Are we -- is the machine repaired? Or are we getting production?
Yes. We're at full capacity since 1st of January.
Since 1st of January. And when did this happen? What period did this happen?
For the month of December.
For the month of December. So then we lost the entire sales of month of December?
Not entirely, partial sales. Our production wasn't at full capacity. The whole plant wasn't shut down.
Okay. So will that have any impact on the inventory positions for January? Or we have started full on -- full production, and there will be no impact of that machinery shutdown in Jan sales?
Since Jan, there will be no impact.
There will be no impact. That's great.
Yes.
Okay. And what is the guidance you have for the distillery as well as ethanol business as the price increases also? And what do you expect for future?
See we expect the future to be very good. With the government is promoting the ethanol business and ENA, there's also good demand for ENA in the market. And especially grain-based ENA is preferred over sugar. And so we expect this business to do very well, and that's precisely why we're expanding in Bengal. And we've also actually started the groundwork to double our Bhatinda capacity to 400 KLPD and keep the new plant as just an ethanol-only plant. So we see great future in this industry.
So right now, the capacity is 200 KLPD of Bhatinda, and you're increasing it to 400 KLPD. Is that right? I understand?
Yes, we've started the work.
Yes. And when is this work expected to complete? Be completed?
See, setting up a distillery is a long process. As we mentioned before, as it is a red category industry when it comes to environmental clearance. So we started our work for environmental clearance, and it will take up to 2 years for it to come into production.
And we are not taking any other property or anything, we are doing it in our own complex?
Yes, we have ample of land, and we actually do have excess power also in our current distillery. So we hope to utilize on that and keep the CapEx for the new plant as low as possible.
Okay. Since we have the Director of Svaksha Distillery also, can I know what is the situation there? And since you've said that the commencement of production will happen in Q3 FY '22. I mean, is there any chance of any partial production start or anything? Is there any possibility?
No.
Because the entire investor community is actually very upbeat on this plant because that will directly double your capacity and maybe double the profits also?
Right. Pankaj Ji can answer this better?
Yes, yes. I'm taking this question. So the plant is currently under full swing construction, all our vendors, including Praj Industries are already there. And as Kushal said, we're expecting the production to commence in the Q3, and we are absolutely optimistic about it that it should happen. Barring there could be a month or couple of months delay, which also we have kept in hand when we have said Q3 of financial year '21-'22 because of the monsoons in Bengal. But apart from that, we are absolutely firm that the commencement of production should happen in Q3 '21. And this will have an impact on the BCL sales revenue because, yes, it gets added to the parent company.
Okay. And we're already having a sales agreement with the OMCs for this plant also? Or we'll be having fresh negotiations?
So basically, the OMCs opened their expression of interest. And for that, BCL has already tied up, it is only for plants which are already under commencement and who are already producing. Since SDL has not started to commence on the production, we haven't filed with the OMCs, but we are -- it's a very, very simple procedure because the OMCs are in dire requirement of the ethanol right now. So once we commence production, we will immediately apply for it, and we should get the approval immediately. There won't be any hiccup because of BCL already set reputation over there.
And to this, I would also like to add that the ministry is so keen on excess production coming. They've already taken our data from plants that are from any expansion that we're planning on doing. And we have informed them about the SDL plant that is coming up in Bengal, and they're very excited about it, and there will be no issues at all in setting up with the OMCs once we start production.
Also, will there be any issues with the raw material supply? Because since it will be again a rice-based plant, right?
No, no, no, not absolutely. Bengal is paddy-rich state that is known to entire India. And besides, we are at Kharagpur, which is next to Orissa and Bihar, which are also like paddy-rich states. So we don't see any issue in raw materials at all.
Because this -- there in the Bhatinda plant, you have internal supplies. Here, you have already made arrangements of the supplies for the input?
Yes. In Bhatinda plant, existing vendors are absolutely willing to supply. I mean we are getting a knock like every second month that when we have to start to supply.
That's great. Very great. Just one last question. I think somebody wanted to add something.
Yes. Also, I would like to say the supply that we're getting from our own plant, the broken rice that we get from our own plant is quite marginal. So most of the raw material is still outsourced even in the Bhatinda plant. So raw material sourcing in Bengal won't be an issue.
Okay. Okay. I thought it was -- the maximum was coming from one of the group companies, which is what I had seen in the disclosures, one of the disclosures. So I just got confused that maybe you're getting maximum from a group companies.
Some of it, but still, most of it is outsourced.
Okay. What is the percentage of outsourcing? Can you just -- if you can give me a rough estimate. I mean, it's okay.
I'd say 60%.
60% is outsourced. Okay. Okay. And what is the best situation? This is the last question. What is the best situation right now as of today? And how are we working towards making the company debt free?
So I mean, all our real estate sales are going towards the company being reducing the company's debt. And I would also like to add, you see our revenue has grown by 40%. And still, we haven't taken any further debt to finance the increase in the business operations. So I think that in itself is quite a positive that we've been able to achieve that without raising any more debt.
Absolutely. But what is the current situation? Current debt situation, how much fixed debts and working capital debts you're having?
So our working capital is around INR 120 cr and another fixed debt around, I think, INR 70 cr of today.
Okay. So is there any time line that the company is working towards? How much debt have we repaired during this quarter?
In this quarter, I don't know exact number in front of me, but we hope to be debt -- long-term debt free in the next 2 years.
In the next 2 years? Wow. That's really, really great.
Long-term debt free, I'd like to clarify.
Yes, yes. I understand. The INR 70 crore you're talking about?
Yes, yes.
Yes, yes. But that will still add a lot to the investor community. And do you then intend to give higher dividends? Just a question from the investor community again.
Yes. Something to look forward to in the future. As of now, I cannot comment on it too well because the company is busy in expanding and using the funds internally to set up a plant in Bengal and then trying to double our Bhatinda capacity. So maybe, yes.
Okay. And is there any chance of promoter increasing because you have taken a preferential issue at 65. Is there any chance that the promoters will be -- I mean, seeing that the company will be debt-free and looking at the Kharagpur plant also coming in online, is there any chance that promoters will also buy any shares from the open market? Because that will again add to the confidence of investors.
No plans as of yet.
No plans as of yet. Great.
The next question is from the line of [ Shyam Bhupedi ], an individual investor.
So just to an extension on the debt levels. So are we completely relying on real estate assets to pay off debt? Or are we using any of the profits we got from the other streams?
Both.
So what's the total real estate assets we have as of today?
So the realizable value of the total real estate assets as of today are around INR 40 cr.
Okay. And you're trying to clear long-term debt, which is INR 70 cr?
Yes. Yes.
Okay. And are you planning to raise any more debt because of this new commission of distillery? Or is it all internal accruals?
No, we will have to use funds from outside, but we're trying to reduce the debt we take for this project, and we're still working out. So right now, all of the money that's being used is internally. And we intend to increase our internal accrual for the Svaksha project.
Okay. So basically, if we look from a long-term perspective of the company, we are only looking at distillery and vegetable -- I mean vanaspati oil. So we are completely planning to get rid off real estate. Is that right? Is that the vision of the company?
Right. So real estate, both our projects have already been built. There is -- we're not constructing any further. And we intend to just grow in the Edible Oil and Distillery segment.
Okay. So basically, we are looking at only these 2 segments in the long term, right?
Right, right.
And how is the ethanol looking like? I mean, like I'm hearing the story from last 1 year that ethanol is the one which is very -- even government is very much focused on that. But is anything happening in the ground level? Like is it really turning into an attractive sector?
Yes. The ethanol sector is very attractive at the moment, and we expect it to stay the same for the next 5 years because you see there's still a huge gap in what the government needs to achieve their target of 20%, their vending target of 20% and what the current supply is at. So the government is holding conferences with us on a weekly-by-weekly basis where they're seeking our recommendation on how do we increase the capacity of ethanol in the nation. And we are giving them various ways in which how -- in how that can be done. Very positive news coming out of the state of Punjab was that just a few months ago, we had written to the office of CM, asking him to have a separate license made for plants that are only ethanol plants. So currently, if you want to set up an ethanol plant in any state, you have to obtain a D2 license from the state. And we have recommended that they have a separate license made for biofuel plants. And we're very glad to say that our advise was listened to. And in the recent excise policy from the state of Punjab, they set up a new license called E2, which is for people who are interested in setting up ethanol-only plants. And that is a big positive as the license fee for the E2 license is lower than D2 and so they are listening, and there's still a huge demand for ethanol in the market. So we're very optimistic about it.
And we are also planning to commission a power transmission, something like that. Is that only for the company usage? Or are you planning to export as well?
No, no, just for the company.
Okay. So just to get rid of those power bills you are having at internal. Is that right?
Right, right.
The next question is from the line of [ Nikita Sehgal ], an individual investor.
Sir, I wanted to know that the government has approved the usage of old grain for production of ethanol. So how will this benefit our company?
That was allowed previously also. So you could only make ethanol from damaged grains. So in the recent, I think what you're trying to say is they've allowed the use of maize, that's the only change they've done.
Okay, sir. So how will this exactly benefit us, sir?
See, it gives us the option of an added raw materials and that will benefit us. And also, I think you might be mentioning they've allowed the surplus grains that were lying with FCI for the use of ethanol?
Yes.
Yes. So that is a separate policy. It's a very positive policy. So what they've done is they set up price for the FCI rice and they set a price -- a different price for the ethanol that is made from FCI rice. And that is a great policy going forward since FCI is sitting on a huge inventory of rice, and they don't know what to do with it. And the ethanol industry can use it very well. So that is a very positive news in the future that gives us the option for another raw material.
Okay, sir. And sir, what would -- what have been the per liter realization of ENA and hand sanitizer in Q3?
So in Q3, we didn't make any hand sanitizer since there's been a steep decrease in the demand. And we did not make any.
For ENA?
For ENA, I don't know exactly because of the shutdown, I think it was around...
Okay. And in Q2, sir, what were the prices of per liter realization of ENA and hand sanitizer then?
In Q2, also, we made very little hand sanitizers as far as I can remember. So hand sanitizer demand has gone down from Q1 quite drastically. And the price for ENA then -- the average price for ENA then was at around INR 50.50 and the ethanol for that Q2 was at INR 50.63.
[Operator Instructions] The next question is from the line of [ Aasta ] from Dolat Capital.
Congratulations on the good set of numbers. Just a couple of questions. One is that why -- what was the reason for improvement in margin in the Distillery segment in the last 2 quarters?
What was -- I'm sorry, can you repeat the question?
There was an improvement in the margin in the Distillery segment. So could you please share the reason for that in the last 2 quarters?
Yes. So the increase in the margin for the last, I'd say, 3 quarters, maybe would be because raw material prices have decreased, and that has helped the industry quite a bit.
All right. All right. So could you read some number specifications for that?
So number specifications would be, let's say, pre-COVID levels, the price for broken rice was hovering around INR 20 to INR 21 a kg, which has now come down to around INR 16 a kg.
All right. And one more question is that you told that the Distillery segment revenue is down because of some mechanical issues, due to it the factory was shut for a month or so. But I believe your claims is from the insurance is approximately INR 2 crores. So that would add up to approximately INR 95 crores to INR 96 crores of revenue, the total revenue for the Distillery would be INR 96 crores?
No. The entire plant was not shut down for the entire quarter. So there was a partial shutdown in the plant for about 1 month. So that -- so the loss of profit for that is around INR 2 crores, what we've filed for. So I'd say it's around INR 80 crores.
Okay. Okay. All right. All right. So the revenue loss would be approximately INR 80 crores?
Right.
All right.
Yes.
Okay. And lastly, the -- what would be the debt figure for last quarter versus this quarter?
They'd be the same. And there won't be much of a difference.
Okay. And what was the reason for spike in the debt figures compared to last year-end?
So we've taken the COVID loan that was offered by the government.
Okay. All right. All right.
Yes.
Okay. So approximately, the figure of COVID loan would be?
It's around INR 15 cr.
The next question is from the line of Hansal Thacker from Lalkar Securities.
Congratulations on a decent set of numbers. Sir, I just wanted to get some idea as to what is our cost of debt as it stands today?
Cost of debt is at 10%.
At 10%. Okay. Sir, while we're quite thrilled that you are talking about reducing debt. But given the current interest rate scenario, would it kind of low-cost debt be more of an enabler for growth?
Yes. It would be. But at the same time, we believe in organic growth, and we would like to use our company approvals as much as possible before taking any further debt. The cycle that the country has been through in the past is warning for entrepreneurs in the future. So we want to stay disciplined.
Okay. Great. That's wonderful to hear. Sir, and just if you can give directionally what is likely to -- I mean, over the next 3 to 5 years, let's assume that all capacities go back online and I mean everything is hunky-dory then. What are we looking at as far as the Distillery business, like kind of maybe a rate of growth or some sort of a capacity or something like that?
See as I mentioned earlier. So in the next 3 years, our aim is to first commission the Svaksha plant, which is a 200 KLPD, and then double our Bhatinda capacity to 400 KLPD. So a total capacity of 600 KLPD in Distillery segment. And we'll see how the scenario -- there is an immense opportunity for growth in this sector. So if we see any other opportunity coming up as well, we'll definitely like to grow. But for now, these are the plans.
Okay. And therefore, going forward, looking at the oils business and the distillery business ideally would be more of a half-and-half revenue breakup mix going forward?
Yes. Yes, because also our current edible oil units is -- it has the ability to give us a revenue of around INR 1,400 crores in the year, if it was at full capacity utilization. And the policies that are coming up and the government supporting -- promoting indigenous edible oils and the cultivation of edible oilseeds. We also hope that our edible oil unit comes to full capacity utilization in the next 2 to 3 years if the right policies are made. So yes, I would say 50-50.
Okay. All right. So INR 1,400 crores ideally on full capacity on edible oils and roughly the same for the distillery is what we're looking at?
Right.
Okay. And can you give us some hint as to the margin, sir?
In?
In both these segments.
So the margins would stay the same.
As in steady state as it is today.
Yes. So there won't be a huge increase in the margins to be completely honest, because we're in the commodity business. And margins don't increase drastically as how much ever we would want them to, they don't ever increase drastically in this business. So we can try increasing our volume and grow from there.
Okay. Okay. So it's not like some significant kind of scale kicks in and better margins or something?
Yes, unless something -- unless the raw material prices were to crash further, it will be very hard.
Fair enough. Fair enough. And sir, can you just indicate as to what you expect peak debt levels to be for the next year?
Peak debt levels?
Yes. For next year?
For next year, so we would take about -- I think it's hard to say because we're still deciding, but I'd say we would add about INR 40 crores maximum to our debt to fund the Svaksha project.
The next question is from the line of [ Abhishek Kapur ], an individual investor.
Congratulations on good set of number. I have a couple of questions. The first question is on the edible oil. Our sales have gone double from the last year-on-year, but margins have not come up that well. So what is the reason, sir?
So there are 2 reasons, firstly, for our edible oil sales going up. One, because there has been about a 30% increase in the prices of edible oils when compared to last year. So 30% of the increase in the sales, you can attribute to an increase in the price for raw material and the final product. Secondly, the rest, we -- the other -- the rest of the increase about 70% of the increase we attribute it to an increase in the sale of our own product. Because of COVID, we were able to penetrate further and we gain a wider customer base. And that's why we've been able to increase our sales. So right now, our aim is to keep increasing our sales and keep gaining more distributors and increase in volume and keep gaining more customers for ourselves. And that's why we are pricing our product very competitively in the market to gain a market share. And that is why there hasn't been a great increase in the margin for edible oil. And also, another thing I would like to add is that last year, we were doing contract manufacturing. When it came to edible oils, we were manufacturing for Bunge and Markfed. So this quarter, we did not do any contract manufacturing. And this year also, we've done very little. That is to focus on our own brands to gain greater volume and to price our product very competitively in the market.
So can we say that margins are likely to improve if we go ahead and increase our share of -- like our sale of our products, our brand value?
Yes, yes, sir. But that is a slow process, and it takes time, and we are going to be patient with it because after a very long time, the company is seeing the sales that we're seeing now. And we want to take full advantage of it and take it slowly.
Right, sir. Can we say -- can we also say that the margins have improved year-on-year on this segment?
I think they stayed about the same.
Sir, you said the sales have -- one reason is to -- that sales value have gone up because of the increase in the prices. And you did not do any contract manufacturing, but it is difficult to find out the margin on this vis-à-vis last year, that the margins have expanded because of our share.
The profit margin has stayed, I think the margin has about stayed the same.
Okay, okay, okay. Not an issue. And you see this will be sticky, right? It will not come down from next quarter or further?
No, no, I don't expect it to come down at all.
Right, right. And you also said that we have the land and we have some surplus power. Are we looking for expansion of distillery in our own field, not in West Bengal only?
Yes. So as I mentioned, we started the groundwork to double our Bhatinda capacity from 200 KLPD to 400 KLPD, but it's a long process, and it will take at least 2 years for the plant to come into production.
Right, sir. Right, sir. Understood. Henceforth, we will be looking to expand in ethanol, can we say that not in edible oil?
Yes. Also, the new plant that we're planning to establish in Bhatinda would be an only ethanol plant. So no ENA plant. That is seeing how the government is pushing ethanol. So we'll keep that plant just for ethanol.
I also understand that government is giving some funding or subsidized interest rate for these ethanol plants. Are we planning to avail any of these?
So we have applied for the same, and let's see for the application, how our application is processed.
And this will not be considered for our existing plant, which is at 10% debt, right?
No, that's only for new plants.
The next question is from the line of [ Abhimanyu Thakkar ] from [ Crest Portfolio ].
I just wanted to ask one question. If you could just give me some color on the capital allocation that you're planning to do in the upcoming year since the sales are going to increase in upcoming capacity. So any idea on how the capital allocation will work?
So the only capital allocation that will be done would be to fund the Svaksha project.
Okay. And any plans on dividends?
Not decided as of now.
The next question is from the line of [ Dipesh Sancheti ] from Manya Finance.
Yes. Just a few follow-up questions. One, does any of our Distillery business or oil business come under the PLI schemes, which have been launched by the government?
No.
Okay. And MSP affect our raw material procurement?
So MSP affects our raw material procurement only for the Edible Oil segment, and not for the Distillery segment.
Is that the reason that our margin was a bit affected in this quarter?
No. No, I wouldn't attribute it to that. See, the MSP is there for edible oilseeds in the market. But for mostly, MSP has been higher than the market value. So very little edible oilseed actually comes to the processor. But we've seen that trend change now as the prices of edible oils has improved a lot. And mustard crop is upcoming. So we expect to process a lot of mustard this year, which will be a benefit moving forward.
Okay. So what crops are we doing? We will be doing mustard as well as what?
So we do mustard, cotton, rice bran. And then we use -- we further refine imported oils like crude palm oil or degum soyabean oil.
Okay. And how much percentage of the oils are for cotton?
For cotton, so we only do refining of cotton. So that would be around 15%.
15%. Okay. And also for the existing debt facility, are we planning to take anything from Udyam scheme or any other schemes, which has been launched by the government and from the Finance Ministry? So that gives you a competitive advantage as in -- there's a 5% -- 2% to 5% subventions on the various schemes.
So the government has offered an interest subventions scheme for people looking to expand grain-based ethanol capacities in the nation. And we have applied for the same for our Bhatinda plant. So we are hoping for the file to be approved, and that will be a big positive.
And that will not be relevant for our Kolkata plant -- West Bengal plant?
For us to get the benefit of the scheme, we have to allocate 75% of our capacity to ethanol and 25% to ENA. At least 75% has to be allocated to ethanol. And since there is a base market for ENA in Bengal, which we believe will result in greater margins, better margins than ethanol. So we've only allocated 50% of our Bengal capacity to ethanol and 50% to ENA. So we don't qualify for the scheme.
Okay. Okay. Okay. So ENA what is the realization expected? Right now, what is the realization in Bhatinda?
So in Bhatinda, currently, the ENA prices are at INR 49.
And for -- this is, I think, INR 51.55 for ethanol?
Yes.
Okay. And then Bengal, what is it expected? A ballpark figure maybe.
In Bengal, it's usually INR 4 more.
INR 4 more. Oh, great. Okay. That makes sense. Yes, that's good.
The next question is from the line of [ Alok ], an individual investor.
Yes. Am I audible?
Yes, yes.
Yes. Sir, just a couple of questions from my end. One, I would like to understand what is the split between our own brand in the overall oil and vanaspati segment currently? And are we looking at any contract manufacturing from any prominent brands? You just mentioned that we have discontinued some of the contract manufacturing. So...
Currently, we're not doing any contract manufacturing. So the -- all the sale is under our own brand. And if it continues to be like this, we don't intend to do any contract manufacturing moving forward.
Correct. So like 100% of the -- approximately INR 300 crore revenue is from our own brands?
Yes.
Right. And is this -- you just mentioned, I think, for the full year, you could do something like INR 1,400 crores for the oil and vanaspati segment?
If all -- if our entire unit works at full capacity. So at 0 CapEx, our current units can give us INR 1,400 cr a year.
Okay. So if I understand that like what we have achieved in this quarter is sustainable when it comes to this segment?
Yes, we are hoping...
INR 300 crores kind of a run rate?
Yes, we're hoping this sustained.
Okay. And also in our Distillery segment, assuming that like we lost some production because of the plant breaking down. However, like without any expanded capacity coming onstream, which will happen only in the third quarter. What is the steady state run rate for Distillery segment?
In terms of turnover?
Correct, at Bhatinda?
So at Bhatinda, like even at full capacity, it stays around INR 400 crores a year.
INR 400 crores a year. Okay.
Yes.
So last quarter, I think we did something like INR 120 crores, if I'm not mistaken.
Last quarter, I think it must have been around that. Yes.
Okay. Okay. Okay. Right. And currently, do we have a 50-50 mix in our Distillery segment at Bhatinda between ENA and ethanol?
Yes.
Right, right. So significant benefits start pouring in once Kharagpur goes operational?
Yes.
So that is when -- in the overall mix also, our kind of revenue profile becomes 50-50 in favor of Distillery or slightly more.
I'd say 50-50.
[Operator Instructions] The next question is from the line of Yogansh Jeswani from Mittal Analytics.
Sir, in your comments, you mentioned about 30% realization increase in edible oil since there was a huge tailwind in the industry. So currently, what is the situation on ground, sir? Do we still see these elevated prices? And if yes, what are the key drivers behind this? Is there any shortage or any fundamental development there?
Yes, the prices are currently sustaining at those levels. And there are a few reasons for it. One, the government has increased the duty for imported oil. And that is helping. And secondly, I would say there has been some shortage in the supply also due to the disruptions caused due to COVID-19 in countries like Malaysia, Brazil and the United States.
Understood. So therefore, we expect this -- these realizations to continue. Sir, again, another question on the Edible Oil business. Like you said, we have stopped working on the contract manufacturing side. So if we talk about the margin differential between selling our own brand versus contract manufacturing. What is the margin differential that we gain by selling on our own brand? Or is it...
It's very marginal because, see, we do contract manufacturing for companies like Bunge, which have a premium in the market for their product. And our price -- we have to keep our prices more competitive as our brand is still growing. So there is not that big of a difference in the margins for contract manufacturing in our products, although there is some. It's not too great.
Right. So just another question on that, so then, wouldn't it make more sense to go on a contract manufacturing because I think on contract manufacturing for a brand like Bunge, we'll have better supply schedules or better capacity utilization compared to our own brand. Is that understanding right?
No, you see the capacity utilization not happening at full is due to our oil mill not working for -- as there is not enough oilseed supplier. But our refinery is what we will -- the refinery segment of our unit is what we'll be using to contract manufacture for someone. And that part of the unit is working at full capacity. So we don't see the benefit in doing contract manufacturing. Am I clear?
Yes. That's really helpful. Sir, lastly, I might have missed this one. Sorry, if you have to repeat it. But what is the update on our Bengal capacity, sir? Where are we in terms of construction? And by when do we expect it to commercialize?
Yes, Pankaj, you can answer this one if you..
Yes. So as I said earlier, the Bengal plant is under full phase of construction. We have all the vendors, including Praj, Seema and Triveni already on the site, working full-fledgedly. And we expect to commence the production in quarter 3 of financial year '21-'22. So we have already taken the grace period of about a couple of months in hand because of the monsoons in the state of West Bengal. And we are right on track. We are absolutely sure that the commencement of production will happen in Q3 of financial year '21-'22.
So by December, sir, what would be our CapEx spend so far? Because I think September balance sheet, the CWIP was 0. So what will be the CapEx?
So we'll be having about INR 135 crores on the plant.
INR 135 crores is already spent?
Out of which we have already spent about INR 45 crores.
INR 45 crores. So that was more or less an equity participation in it. I think now the debt portion would be left, right?
Right. So this was part of the promoter contribution, which we've already put in. We are looking at a debt of now only about INR 45 crores, for which we have already got in principal sanction from State Bank of India. However, we have not yet availed the loan because we want to keep the interest cost down. And with the major equipment only coming in from March, April this year. And that is when the disbursement will start happening from State Bank of India.
So funding wise, we have secured the funding. It's just that we are waiting for the right time to draw and time it with the delivery schedules of the machinery, right?
Yes, absolutely.
Perfect. And you said INR 40 crores, INR 45 crores has been spent in Q3?
Yes. No, I didn't say INR 45 crores, but I said, in all, we have spent about INR 45 crores on the plant so far.
Okay. So far, INR 45 crore we have spent on the plant?
Yes. And the total outlay is INR 135 crores.
As there are no further questions from the participants, I would now like to hand the conference over to Mr. Vikram Suryavanshi for closing comments.
We thank the management of BCL Industries for giving us an opportunity to host the call and taking time out for interacting with the stakeholders. Thank you all for being on the call.
Thank you. On behalf of PhillipCapital (India) Private Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.
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