As per this news, additional burden on sugar mills can be calculated as follows
Rs.25/Quintal implies Rs.250/tone [1 tone = 10 Quintal]
Usually Avg. capacity of medium-sized sugar companies is 10000TCD [TCD - Tons of Cane per Day]
means assume if they operate at 100% utilization - 10k * 250 = 2500k/day
(Usually, Sugar mills operate at 80-90% utilization during the crushing season)
Let's calculate additional burden (expense) per quarter,
3 (months) * 30 (days) * 2500k = 225000k = 22,50,00,000 = 22.5crs
For a company like Avadh Sugars, it is almost losing 10EPS/Quarter
Implies, with a FV 10, it will be pushed back by Rs.100 in general!
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Don't worry, now calculate from the demand side as well, esp., the recent hike in sugar prices, it justifies and Sugar sector will soon rally!
