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Buy Dwarikesh Sugar, tgt Rs 95: PINC
PINC has maintained buy rating on Dwarikesh Sugar Industries with target price of Rs 95. The future profitability of the company will come primarily from its 56 MW (saleable) cogen power plants.
PINC has maintained buy rating on Dwarikesh Sugar Industries with target price of Rs 95 in its May 13, 2008 report. "Dwarikesh Sugar Industries Ltd.'s (DSIL) net sales surged by 36% YoY to Rs866 million in Q2FY08. Commissioning of Dwarikesh Dham unit (7,500 TCD and 24 MW saleable cogen) and 24 MW cogen unit at Dwarikesh Puram were the key reasons for the sales growth. Sugar volumes rose by 27% to 37.5k mt whereas realisations were down by 2% YoY and up by 4% QoQ to Rs13.8k/mt. The other key development was the commissioning of its 24 MW each cogen plants at Dwarikesh Dham and Dwarikesh Puram in Feb'08, which were postponed on account of delays in installing evacuation lines from power plants to the state grid.The future profitability of the company will come primarily from its 56 MW (saleable) cogen power plants. This, coupled with firm sugar prices is likely to boost the company's margins and improve its cash flows. Hence, we maintain our 'BUY' recommendation with a price target of Rs 95 (as against our earlier target of Rs 130) on an investment perspective of one year" according to PINC report.
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