Sharekhan's research report on Dhampur Bio Organics
Dhampur Bio Organics Ltd (DBOL) posted mixed performance in Q4FY2023 with revenues growing by 59% y-o-y to Rs. 803 crore, while lower OPM resulted in a 3% decline in adjusted PAT. DBOL witnessed strong sequential improvement in profitability. Sugar production in North India including UP is up by 4%; net sugar production for current season is expected to be at 32.8 million tonnes.. DBOL expanded its country liquor capacity to 4.2 million cases from 2.8 million cases; Sugar capacity will be expanded to 26,000 TCD from 22,000 TCD in October 2023. With expanded capacity of 312.5 lakh litres per annum, the company is targeting bio-fuel/spirit production of ~12 crore litre in FY2024.
Outlook
The stock trades at 9x/8x its FY2024E/25E earnings. We maintain our Buy recommendation on the stock with an unchanged PT of Rs. 215.
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