Dhampur.Spl.Sug. Management Discussions

Global Economic Review

The year 2022 saw challenges such as the Russia and Ukraine war, inflationary pressures and resurgence of COVID-19 in China. These factors impacted the economic growth trajectory in 2022, and is expected to impact the growth of the global economy in 2023 as well. The global growth in 2022 is estimated to have slowed down to 3.4% in 2022 compared to 6.2% in 2021. However, the second half of the year saw nascent signs of recovery of the global economy. The emerging markets and developing economies are estimated to have grown their gross domestic product (GDP) at an average of 4.0% in 2022 compared to 6.9% in 2021. On the other hand, the advanced economies are estimated to have grown at an average of 2.7% in 2022 compared to 5.4% in 2021.

With the escalation of Russia-Ukraine war, there was a disruption in the global trade quantum. Further, prices of gas, fuel and food increased, translating into rising inflation. The global consumer prices in 2022 are estimated to be 8.7%. Of this, the inflation for emerging economies and advanced economies are estimated at 7.3% and 9.8% in 2022, compared 3.1% and 5.9% respectively in 2021. However, with the focus of Governments across the world on securing global disinflation, containing the resurgence of COVID-19, ensuring financial stability and restoring debt stability, the world is expected to stabilise in 2024 with a GDP growth of 3.0%, before dipping slightly in 2023 with a GDP growth rate of 2.8%. The policy initiatives are expected to stabilise the global economy in the long run, and successfully reduce global inflation to 7.0% in 2023 and further to 4.9% in 2024.

Indian Economic Review

The inflationary pressure across the entire world has impacted the Indian economy as well. As per their 1st advance estimates, the Government has estimated the Indian economy to have grown at 7% in FY 2022-23 compared to 8.7% in FY 2021-22. This is a slower growth compared to the previous years figure. However, the previous year growth was higher owing to the lower base in FY 2020-21.

Additionally, India emerged as the fastest growing country in the world against the backdrop of the global inflationary pressure, which, validates the strength of the countrys economy and fiscal policies. The year saw rising power, fuel and food cost. The Consumer Price Index (CPI) of India was estimated at 6.8% in FY 2022-23, compared to 5.5% in FY 2021-22. The target range for inflation was fixed at 4% with an upper tolerance of 6%. However, between April and October 2022, the CPI was outside the target range set by the Centre. To bring inflation under control, RBI increased the policy reportage under the liquidity adjustment facility (LAF) by 250 basis points from 4.0% to 6.50% during 2022-23.

Additionally, the Government cut down import duty on major inputs such as ferronickel, coking coal, among others, to zero; rolled out phase-wise reduction in excise duty of petrol and diesel; waived off custom duties on cotton; and prohibited export of wheat.

With the increasing thrust of Government on infrastructure and capital expansion, the country is poised for a sustained growth in the foreseeable future. The Union Budget 2023-24 speaks volumes of the

Governments increasing focus on infrastructure, financing new businesses, and making India more self-reliant and self-employed. The GDP growth of the country in FY 2023-24 is projected between 6-6.8%.

Global Sugar Sector

The global sugar surplus in 2023-24 is projected at 2.5 Million Tonnes on the back of the incremental output in Brazil. In 2022-23, the cane area in Brazil was down 0.4% on a y-o-y basis to reach 8.29 Million hectare, owing to the fact that incremental number of farmers switched to corn and soybeans from sugarcane. However, on the back of improved yields, cane output of Brazil reached 610.1 Million Tonnes during 2022-23, clocking a y-o-y growth of 5.4%. In the first half of April 2023, Brazil is estimated to crush between 10-18 Million Tonnes of sugar cane to produce 4.3-6.9 Lakh Tonnes of sugar. India and Thailand is expected to see a minor drop in sugar production in 2023-24. Further, the sugar production in Philippines is projected to reach 1.9 Million Tonnes in 2023-24, compared to 1.83 Million Tonnes in 2022-23, registering a y-o-y growth of 3.8%.

Indian Sugar Sector

India stands as the second-largest producer of sugar, the largest consumer, and the second-largest exporter of sugar in the world. Initial estimates of sugar production in India was estimated at 360 Lakh Tonnes in SS 2022-23, with sugar sacrifice of 45 Lakh Tonnes towards ethanol. However, currently the initial estimates stands revised to 328 Lakh Tonnes with sugar sacrifice of 40 Lakh Tonnes. Maharashtra, is estimated to produce 121 Lakh Tonnes in SS 2022-23 compared to 137 Lakh Tonnes in SS 2021-22, registering a decline in output by 11.7%. Uttar Pradesh and Karnatakas sugar production during SS 2022-23 is estimated to clock a minor decline to reach 101 Lakh Tonnes and 56 Lakh Tonnes respectively.

The countrys sugar output as on April 15 for SS 2022-23 stood at 311 Lakh Tonnes compared to 328.7 Lakh Tonnes in corresponding period in SS 2021-22,clocking a decline in output by 6% on a y-o-y basis. The decline was largely on account of lower sugar production in Maharashtra during the year. Maharashtra, Uttar Pradesh and Karnataka, being the highest sugar producing states in India, saw sugar production of 105 Lakh Tonnes, 96.6 Lakh Tonnes and 55.3 Lakh Tonnes respectively till April 15, 2023 for SS 2022-23 compared to 126.5 Lakh Tonnes, 94.4 Lakh Tonnes and 49.8 Lakh Tonnes for the corresponding period in SS 2021-22. The year saw Maharashtras sugar output falling from the peak of 126.5 Lakh Tonnes as on April 15 in SS 2021-22.


The sugar export quota of India is set at 60 Lakh Tonnes by the Government in SS 2022-23, a lower revision from 72 Lakh Tonnes and 112 Lakh Tonnes of exports made by the country in SS 2020-21 and SS 2021-22, respectively.

Of the set quota of 60 Lakh Tonnes, 40 Lakh Tonnes have already been exported as on April 2023. Depending on the current demand and supply scenario in the industry, additional sugar export quota will be decided by the Government. However, owing to the untimely rains which has impacted sugar production at few locations, the Government might not allow additional export quota during SS 202223.

SWOT Analysis Strengths

Being the second-largest sugar producer in the world, India stands self-sufficient to support the sugar consumption in the country.

Availability of abundant arable land in the country aids in sugar production. The sugar industry aids the rural communities by creating employment. By-products from sugar production such as bagasse and molasses are used to produce cogenerated energy for captive use and commercial sale, in addition to producing ethanol. Sugarcane is one of the most lucrative cash crops in India.


The countrys production is highly reliant on monsoon rains, and gets impacted by untimely and inadequate rains.

Plantation white sugar from India is not in high demand in international markets. Sugar business is a highly capital intensive and low margin industry.


Sugar demand in India is on the rise on the back of ever-increasing population of the country coupled with the increasing downstream utilisation of sugar.

The scope of producing ethanol is immense in India, especially with the incremental focus of the Government on ethanol blending.


Import of sugar at cheaper prices might have an impact on the sugar sector in India. Sugarcane prices are affected by the sugar industrys reliance on rainfall, planted acreage and transportation costs. Increased production without exports may result in oversupply in the domestic sugar market

Product Wise Performance


Sales in Lakhs.

Finished Goods


Jaggery Items


Khand Item


Packing Material


Pharma Sugar


Raw Material/Finished Goods


Sugar Cubes


Sugar Syrup


Trade Items


Financial Ratios and elements





Variance (%)

Reason for Variance where change is more than 25%

Current Ratio





Due to Increase in other current assets

Debt-Equity Ratio


Not applicable since company has no Debt

Interest Coverage Ratio


Not applicable since company has no Debt

Inventory Turnover






Trade Receivable Turnover Ratio






Net Profit Margin


0.75 %



Due to decrease in Net profit after tax

Return on Capital Employed





Due to decrease in profit before tax