Buy Dwarikesh Sugar, target of Rs 75: LKP Shares

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Buy Dwarikesh Sugar, target of Rs 75: LKP Shares

LKP Shares has recommended a buy rating on Dwarikesh Sugar Industries with a price target of Rs 75. Q1-FY’09 has witnessed a smart profitability from the co-generation unit with EBIT of Rs 150 million and the sugar operations have also turned positive with EBIT of Rs 54 million.

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LKP Shares has recommended a buy rating on Dwarikesh Sugar Industries with a price target of Rs 75 in its February 24, 2009 research report.

"DSIL is a fully integrated sugar complex with a capacity of 21,500 TCD in sugar at its three manufacturing facilities located at Dwarikesh Nagar-DN at Bijnor, Dwarikesh Puram-DP at Bijnor and Dwarikesh Dham-DD at Bareilly. The DD unit commenced production last fiscal and the steep fall in sugar prices last fiscal coincided with DSIL execution of the ultra modern DD plant along with the incremental power capacity and the combined effect led to a loss of Rs 250 million last fiscal."

"The Rs 6 billion debt on its books created substantial financial strain as the revenue side had not begun reflecting while the cost side reflected itself fully. Q1-FY'09 has witnessed a smart profitability from the co-generation unit with EBIT of Rs 150 million and the sugar operations have also turned positive with EBIT of Rs 54 million. BUY, with a one-year price target of Rs 75," says LKP Shares' research report.