COMPANY OVERVIEW:
The Company was incorporated 26th July 1932, at Mumbai. The Oudh Sugar Mills Limited (OSML) belongs to the renowned K.K.Birla Group of Companies. K.K.Birla is a major player in key industries like fertilizers, chemical, heavy engineering, textiles, shipping, media etc apart from sugar.

Sugar mills and capacity:
Hargaon Sugar Mill (UP) with a crushing capacity of 10000 tonnes of sugarcane per day.
New Swadeshi Sugar Mill (West Champaran, Bihar) with a crushing capacity of 7500 tonnes of sugarcane per day.
Rosa Sugar Works (Shajhanpur, UP) with a crushing capacity of 4200 tonnes per day.

Distilleries and capacity:
Hargaon Distillery (UP) with a capacity of producing 11.53 million liters per annum of industrial Alcohol/Ethanol.
New Swadeshi Distillery (West Champaran) with a capacity of producing 9 million liters per annum of industrial Alcohol/Ethanol.

PRODUCT:
SUGAR: Sugar is produced in three sugar mills of the company with per day crushing capacity of around 21000 tonnes per day.
MOLASSES: Molasses is a byproduct generated in the process of manufacture of sugar. It can either be sold untreated or be used as principal feedstock for manufacture of alcohol. The molasses generated in the company `s sugar factories at Hargaon and New Swadeshi Sugar Mill is used as raw material in its distilleries for production of industrial alcohol/ethanol.
BAGASSE: Bagasse is a byproduct generated in the process of manufacture of sugar. It can be sold or captively used for generation of the steam. The product is captively used.
INDUSTRIAL ALCOHOL: The Company has installed distilleries at its Hargaon and New Swadeshi mill with the capacity of 11.53 million liters per year and 9 million liters per year respectively.
ETHANOL: To meet increasing demand of Ethanol Company has installed ethanol producing plant at Hargaon. The capacity is 30klpd.
ORGANIC FERTILISER: Spent wash, an affluent generated from the molasses is used with press mud is used for production of organic fertilizer. Company market the product under the brand “Oudh Shakti Jayvik Khad”.

CANNING FACTORY: The Company has Canning factory at Bamrauli near Allahabad and markets its processed food product under the brand name ‘Morton’.

SECTORAL OUTLOOK:
The average domestic sugar price for the quarter ended on December 2008 increased 34% YoY (QoQ growth of 5%) to Rs 18.3 per Kg for S-30 grade. The sugar in the international market is currently $325 per MT translating at 16.5 per kg (fob). We have assumed 28% decline in 2009 sugar production to 19 mn mt which is lower than industry estimate of 20 mn mt. the decline is mainly expected in Maharashtra (35% decline) and Tamil Nadu decline of 27%. The production in expected to decline by 18.5%. However considering the excess production of 6mn mt in 2008 and opening inventory of 12 mn mt for current season ,we expect the sugar price to remain stable over next one year. We expect significant improvement in the price in the year 2010.

	NO.OF SHARE	% OF TOTAL
PROMOTER	11563911	52.16%
INSTITUTION	2093116	9.44%
GENERAL PUBLIC	8515033	38.40%
GRAND TOTAL	22172060	100%

Comment:
The promoter has increased their stake in the company from 48% in last quarter to 52% in the quarter ended sep2008.

	31/03/04	31/03/05	31/03/06	31/03/07	31/03/08
TOTAL INCOME	358.07	358.92	529.82	469.73	332.82
EXPENDITURE	-289.54	-301.17	-426.85	-467.96	-289.02
OPEARTING INCOME	68.53	57.75	102.97	1.77	43.8
DEPRECIATION	-10.98	-12.51	-15.59	-20.29	-22.3
PBIT	57.55	45.24	87.38	-18.52	21.5
INTEREST	-35.37	-27.01	-16.85	-20.93	-36.78
PBT	22.18	18.23	70.53	-39.45	-15.28
TAX	-8.06	-7.06	-25.18	12.54	1.76
PAT	14.12	11.17	45.35	-26.91	-13.52

More or less company has not shown any significant increase in the earning this can attributed to the nature of business it is in. company was profitable when the sugar cycle was on uptrend and prices of sugar was firm. As the price started declining in the market and the sugar cycle went into bearish mode ,the company went into losses. 2007-08 was bad years for sugar company. Now sugar is again on the bull run. Due to short supply of sugar sugar companies are expected to perform better. We expect Oudh sugar will come out of red in the next fiscal on better realisation.

	31/03/04	31/03/05	31/03/06	31/03/07	31/03/08
EPS	6.36036	5.031532	20.42793	-12.1216	-6.09009
OPM	19.13872	16.08994	19.4349	0.376812	13.16027
NPM	3.943363	3.112114	8.559511	-5.72882	-4.06226
INTEREST COVERAGE	1.627085	1.675556	5.185757	-0.88485	0.584557

We expect significant increase in the opm and npm in the next quarter. OPM is expected to be around 20% and NPM at 4%.

VALUATION:
We expect the company to turnaround next fiscal on account of good sales realization. This will be reflected in the stock price of the company.

CONCLUSION:
The stock is here for accumulation on every dip. Medium term outlook is intact as the sugar price is on Bull Run. Government intervention in run up to the price is also not expected as inflation too has significantly come down.