Dwarikesh Sugar Q4 Results Review - Uptick In Sugar Prices Partially Offsets Dip In Recovery: ICICI Direct

ICICI Direct Report

Dwarikesh Sugar Industries Ltd. reported weak results due to low recovery, subdued prices.

Sales grew 12.1% YoY on account of significant growth in ethanol sales.

Ebitda was at Rs 86.4 crore, down 15.6% YoY, with margins at 16.2%. Consequently, profit after tax was at Rs 46.8 crore (down 21.6% YoY).

Key triggers for future price performance:

• Dwarikesh Sugar has increased its distillery capacity to 11 crore litre from 5.5 crore litre with the commissioning of new 175 thousand litres per day distillery. This would lead to distillery revenue compound annual growth rate of 18.5% in FY23-25E. Distillery segment to contribute 35% to total revenues.

• With the dip in sugar production in Maharashtra and Karnataka in 2022-23 season, domestic sugar prices have moved up by Rs 2/kg to Rs 36-37/kg. We believe domestic sugar prices would remain firm at least till November-2023.

• Decline in sugar recovery has resulted in a dip in sugar as well as distillery segment margins. Dwarikesh Sugar is changing sugarcane variety in its catchment area to reduce dependence on Co-0238 sugarcane variety.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.