Q4FY21 Result Update - Dhampur Sugar - ICICI Direct

Dhampur Sugar reported strong Q4FY21 results with 33.7% growth in operating profit. Revenue remained flat given sugar sales volumes fell 4.2% on account of lower domestic sales quota & delay in export subsidy announcement. Moreover, domestic sugar prices also remained subdued during the quarter given peak sugar crushing season & low winter demand. Distillery sales was up 23.6% mainly on account of 13% increase in volumes in Q4. The company contracted for ~9 crore litre of B-heavy ethanol for 2020-21 ethanol season (December 2020- November 2021). Power volumes and realisation remain flat. The company sold 2.48 lakh tonnes (lt) of sugar during the quarter. Out of this, domestic sales quota was 1.42 lt and remaining were export quantities. Distillery volumes increased 13.1% to 2.7 crore litre led by higher contribution of B-heavy ethanol. With strong operating profit growth & 21.8% dip in interest cost, PBT witnessed growth of 67.7% to Rs. 128.6 crore. PAT declined 14.6% to Rs. 91.5 crore due to tax write back in base quarter & Rs. 16 crore exceptional expense.

Valuation & Outlook

Dhampur would be commissioning a new 100 KLD distillery by November-December 2021. After the capex, the company would have total 500 KLD distillery capacity, which would result in ~16 crore litre of distillery volumes. This capacity addition would eliminate dependency on sugar exports. Further, diversion of sugarcane towards ethanol would keep the sugar prices above Rs. 34/kg & aid earnings for the company. We maintain our target price of Rs. 260/share & BUY rating on the stock.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Dhampur_Q4FY21.pdf

Shares of DHAMPUR SUGAR MILLS LTD. was last trading in BSE at Rs.214.9 as compared to the previous close of Rs. 208.55. The total number of shares traded during the day was 226294 in over 3540 trades.

The stock hit an intraday high of Rs. 223 and intraday low of 211. The net turnover during the day was Rs. 49230232.

Source : Equity Bulls

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