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- 28 Jul 2022
- ICICIdirect Research
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DHAMPUR SUGAR POSTED Q1FY23 RESULTS
DHAMPURSUG - 187 Change: 1.29 (0.69 %)News: Dhampur Sugar posted Q1FY23 results with revenue growth of 48.2% to Rs 703.3 crore led by 58.2% growth in sugar sales & 45.5% growth in distillery revenues. The strong growth in sugar segment was led by 43.5% jump in domestic sugar sales quota & 6.3% increase in sugar realisation. Distillery revenue growth was led by 47% increase in ethanol volumes given the company produced ethanol from sugarcane juice during the quarter. Distillery realisation was up by 4.5% on account of higher proportion of sugarcane juice ethanol. Operating profit was up by 17.6% despite increase in cost of production due to higher sugarcane prices & lower recovery rate during the season. Net profit increased by 26.2% to Rs 39.3 crore in Q1FY23.
Views: Dhampur Sugar reported its Q1FY23 results after the de-merger. The company posted strong results with higher domestic sales quota, sharp increase in distillery volumes and improvement in sugar as well as ethanol realisation during the quarter. The company has announced a capex of 130 KLD distillery, which includes 100 KLD grain based distillery. After this capex, the company’s total capacity would reach 500 KLD (15 crore litres pa). With the aggressive distillery capacity, the company would be able to divert higher sugarcane towards ethanol. We believe distillery sales would drive the profitability for Dhampur sugar in next two years. After the recent correction, the stock is trading at attractive multiples. We remain positive on sugar sector as well as on Dhampur sugar.
Impact: Positive.