Dwarikesh posts strong results with 4x jump in profitDWARKESH - 91 Change: -0.40 (-0.44 %)
News: Dwarikesh Sugar reported a strong set of numbers with revenue growth of 57.8% & 137.8% jump in operating profit. Consolidated revenue witnessed a growth of 57.8% Rs.601.3 crore led by 52.8% growth in sugar segment sales & 157% growth in distillery segment sales. Sugar segment sales growth was led by higher domestic sales quota & increase in sugar realisation. Distillery sales was up by 157% led by jump in ethanol volumes & higher sales of B-heavy ethanol. Operating profit grew by 137.8% to Rs.55.1 crore on the back of increase in sugar volumes, sugar realisation & higher proportion of B-heavy ethanol. Net profit jumped up 4x to Rs.28.9 crore led by higher operating profit & lower interest costs.
Views: Dwarikesh Sugar is one of the most efficient sugar companies with abundant sugarcane availability, best sugar recoveries in UP and aggressive distillery expansion. The company is increasing its distillery capacity by 3x (from 3.2 crore litres in FY21 to 11 crore litres in FY24). The new distillery would be commissioning in July 2022. Further, with the continuous rationalisation of sugar inventories, domestic sugar prices are in the upward trajectory. We believe sugar prices would move up to Rs.36-37 / kg by April 2022. The increase in distillery volume & higher sugar prices would result in significant jump in operating margins & earning for the sugar companies. We remain positive on the sugar stocks, in general, and Dwarikesh Sugar in particular.