Dwarikesh Sugar Q1 results: healthy with profit at ₹41 crore, stock gains 3%

Dwarikesh Sugar Industries Ltd. reported a strong performance for the quarter ended June 30, 2023. The company's profitability increased due to the recovery in sugar prices and the increase in ethanol production. The management is hopeful that the company will continue to perform well in the coming quarters.

Dwarikesh Sugar Industries Ltd. reported a profit before tax (PBT) of Rs. 59.09 crore and profit after tax (PAT) of Rs. 40.62 crore for the quarter ended June 30, 2023. This is an increase of 3.8% and 2.4%, respectively, from the PBT and PAT reported for the same quarter in the previous year. The company's total income for the quarter was Rs. 571.54 crore, an increase of 2.2% from the previous year.

The management attributed the increase in profitability to the recovery in sugar prices and the increase in ethanol production.

The Indian Sugar Mills Association (ISMA) has not yet announced its estimated sugar production number for the sugar season 2023-24. However, some experts have estimated that India may produce 34 million tons of sugar, compared to 32.8 million tons in the previous season.

The weather will play a key role in determining the final sugar production number. Ex-factory sugar prices have staged a recovery post-April 2023 and are currently range bound between Rs. 3600 and Rs. 3650 per quintal.

Sugar sales in Q1 FY24 were 9.70 lakhs quintals, down from 15.29 lakhs quintals in Q1FY23. Sugar production in Q1 FY24 was 8.97 lakhs quintals, up from 8.96 lakhs quintals in Q1 FY23.

Sugarcane juice was diverted to distilleries in SS 2022-23, resulting in a sugar sacrifice of 13.93 lakh quintals. The company has outstanding long-term loans of Rs. 270.94 crore, including loans availed for the distillery projects.

The Dwarikesh Sugar Industries Ltd. stock closed at ₹ 96.13 on BSE on July 24, 2023, up by 2.32% from its previous close of ₹ 93.95 per share. The stock had a trading volume of 33,89,199 shares. The 52-week high of the stock is ₹ 119 and the 52-week low is ₹ 80 per share.

Dwarikesh Sugar Industries Ltd. reported a decline in sugar sales and gross recovery in Q1FY24. However, sugar stock levels increased and industrial alcohol sales were up. The company continued to make cane price payments ahead of schedule and has cleared its cane dues. The company's long-term rating is AA- with a stable outlook.