ICICI Direct's research report on Dhampur Sugar
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.
Outlook
We maintain our target price of Rs 260/share & BUY rating on the stock.
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