ICICI Direct: Dwarikesh Sugar Posts Strong Quarter; Scale Up In Distillery Operations To Aid Earnings   

ICICI Direct Report

Dwarikesh Sugar Industries Ltd. reported sturdy results with 16.2% revenue growth aided by higher sugar and distillery segment sales. Sugar sales was up by 13.1% driven by higher sugar exports and higher sale of molasses given the company has crushed record sugarcane this season.

However, sugar realisation was down by 1.1% to Rs 31.3 per kilogram. Sugar sales volumes increased by 4% to Rs 1.25 lakh tonnes in Q1 FY21 vis-a-vis Q1 FY20 which included 0.6 lakh tonnes of exports.

Distillery segment sales increased by 70.9% to Rs 20.8 crore driven by higher volumes as company commissioned new 100 kilo litres per day distillery. Though distillery volume was higher by 57% to 0.44 crore litres, it is much lower than the capacity of producing 1.0 crore litres every quarter.

We believe lower offtake by Oil Marketing Companies, due to their constraints of storage, impacted ethanol sales. Power segment sales volumes increased from 2.7 crore units to Rs 4.4 crore units as company crushed 20% higher sugarcane in current season.

Operating profit was higher by 38% to Rs 50.2 crore with higher sugar and ethanol sales. Net profit declined by 9.2% to Rs 18.1 crore due to tax reversal in base quarter

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