Dalmia Bharat Sugar Reports Four-Fold Profit Jump in Q2 FY24

7 Nov 2023 , 01:21 PM

Dalmia Bharat Sugar and Industries’ shares rallied 5 % to reach a 52-week high of Rs 490 per share on November 7 after the company reported a more than four-fold increase in profit to Rs 55 crore in the July-September quarter of FY 23-24 (Q2FY24).

Over the past three months, the stock of this sugar manufacturer has risen by 29 %, outperforming the benchmark Sensex, which declined by 2 % during the same period.

Dalmia Bharat Sugar’s total income saw a 29 % year-on-year increase, reaching Rs 787 crore in Q2FY24, compared to Rs 612 crore in Q2FY23, driven by higher sugar realization and sales.

The company’s profit after tax (PAT) surged by 369 % year-on-year to Rs 55 crore in Q2FY24, attributed to additional profitability from grain distillery operations at the Jawaharpur location.

The company’s earnings before interest, tax, depreciation, and amortization (EBITDA) increased more than threefold to Rs 121 crore, with the EBITDA margin expanding by 800 basis points to 15 % in the September-ended quarter.

The company has started sugar crushing operations for sugar season (SS) 2023-24 in four out of five plants, including three in Uttar Pradesh and one in Maharashtra.

The board has given in-principal approval for the establishment of a greenfield sugar plant in Uttar Pradesh with a capacity of up to 8,000 tons of cane per day (TCD) cane crush, 20 MW Cogen, and 60 kilo liters per day (KLPD) distillery in phases.

The Indian Sugar Manufacturing Association (ISMA) anticipates lower gross sugar production estimates before diversion into ethanol for SS 23-24, primarily due to lower production in Maharashtra and Karnataka because of agro-climatic conditions.

As a result, sugar prices are expected to remain firm in the future, in line with trends observed over the past 2-3 months.

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