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Buy Dwarikesh Sugar, target Rs 130: PINC
PINC research has maintained buy rating on Dwarikesh Sugar Industries with target price of Rs 130. Although we expect the sugar cycle to turnaround on back of lower production estimates and exports, DSIL’s profitability in FY08 will be impacted on account of delay in commissioning of 48 MW power plants.
PINC research has maintained buy rating on Dwarikesh Sugar Industries with target price of Rs 130 in its February 18, 2008 report. "Dwarikesh Sugar Industries Ltd.'s (DSIL) net sales declined by 4% YoY to Rs 615 million for Q1FY08. This was due to lower revenues from all its segments on account of a shorter crushing season. Sugar volumes increased 29% to 41.7k mt whereas realisations were down by 19% to Rs13.2k/mt. Its Dwarikesh Dham unit did not contribute to sales as it was commissioned in Jan'08."
"Although we expect the sugar cycle to turnaround on back of lower production estimates and exports, DSIL's profitability in FY08 will be impacted on account of delay in commissioning of 48 MW power plants. However, a full year's contribution from 56 MW will substantially improve the profitability of the company and cash flows going forward. Hence, we maintain our 'BUY' recommendation with a price target of Rs 130 on an investment perspective of one year," says PINC research report.
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