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Balrampur Chini — a manufacturer of sugar, industrial chemicals and fertilisers — is betting big on its distillery business, which saved the company from deeper losses in the July-September period. The company's management is confident of taking the contribution of its distillery unit from about 20 percent to 35 percent, its CFO Pramod Patwari said in an interaction with CNBC-TV18.

"At the peak level, we are expecting a total turnover of around Rs 6,000 crore, and looking at a distillery revenue of 35 percent within that. Our distilleries are going to commission by this month, and maybe one of the distilleries will be commissioned by the first week of December," he said.

Remarks from the top helm management of the company come a day after the integrated sugar producer reported a muted quarterly performance owing to challenges in its core division due to untimely rains that hurt cane crushing volumes and disease.

Sugar accounts for about 80 percent of the company's total revenue.

Balrampur Chini's revenue from sugar fell 8.4 percent to Rs 936.2 crore during the quarter. Revenue from distilleries declined -10.3 percent to Rs 229.9 crore.

The company's sugar unit was hurt by untimely rains particularly in Uttar Pradesh, which accounts for 29 percent of the company's production. Maharashtra and Karnataka contribute about 39 percent and 17 percent to its sugar output, according to an investor presentation.

The company reported a net loss of Rs 28.95 crore for the three-month period, in stark contrast to a net profit of Rs 83.1 crore for the corresponding quarter a year ago.

Its revenue decreased 8.3 percent on year to Rs 1,113.1 crore, according to a regulatory filing.

Balrampur Chini said the challenges led to higher cost of production of the inventory carried forward to the current marketing year.

Patwari pointed out that the sugar price stands higher at Rs 37 a kilogram than its inventory at Rs 35 a kilogram. He also said the company expects the price of the sweetener to continue to move within a range in the production season, which begins in the next 15 days.

"It will be very difficult to give you a quarter-wise projection (number) but as the production season will be in full swing, I think it is going to remain rangebound," he said.

Balrampur Chini has already said that the weather pattern this year is completely different compared with the past two seasons.

The sugar maker's stock has sharply underperformed the overall market, losing eight percent of its value in the past one month — a period in which the Nifty benchmark has risen almost five percent.

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(Edited by : Sandeep Singh)