E.I.D.-Parry has reported strong growth in net profit for the fourth quarter ended March 31, over the corresponding previous period, when it was in the red. Net profit during the quarter was Rs 143.11 crore (net loss: Rs 48.09 crore) on a total income that jumped more than 80 per cent, to Rs 466 crore (252.99 crore).

Larger sugarcane arrivals, leading to bigger volumes, contributed to the performance. The company, with five mills in Tamil Nadu and Pondicherry, crushed 48 lakh tonnes of sugarcane in 2011-12, against 28.5 lakh tonnes in 2010-11. In Karnataka and Andhra Pradesh, where it owns four mills through subsidiaries, it crushed about 21 lakh tonnes (14 lakh tonnes).

Sugarcane planting is up this year, at about 1.3 lakh acres (1.07 lakh acres), indicating sustained growth in volumes, according to Mr Ravindra S. Singhvi, Managing Director, E.I.D.-Parry.

The company owns the sugar mills in Andhra Pradesh and Karnataka through its wholly-owned subsidiary Sadashiva Sugars and through Parry's Sugar Industries Ltd, in which it has a 65 per cent stake.

The company has approved a demerger arrangement, which provides for two of the subsidiary's sugar mills at Sankili, Andhra Pradesh, and Haliyal, Karnataka, to be brought directly under E.I.D. Parry. The third mill, a leased unit at Ramdurg, will remain with Parrys Sugar.

E.I.D.-Parry will issue Parrys Sugar's shareholders five equity shares of Re 1 each for every 19 shares of Rs 10 in Parrys Sugar. This will bring under E.I.D.-Parry's fold two more mills with a daily crushing capacity of about 4,000 tonnes each, 40 MW of cogeneration capacity and about 90 kilolitres a day of distillery capacity.

The advantage is that with the operations at Karnataka turning around better synergies will be achieved. For instance, E.I.D.-Parry's long- term funding costs are around 9 per cent, compared with Parrys Sugar's more than 13 per cent, he said.

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