Sugar to cost Rs 28-29/kg for next quarters: Dhampur Sugars

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Sugar to cost Rs 28-29/kg for next quarters: Dhampur Sugars

Speaking to CNBC-TV18, Gaurav Goel, managing director, Dhampur Sugars, said that the average price for the sugar segment in this quarter is about Rs 29 per kilogram and world market prices will not have too much of an impact on the company profit in the coming two quarters.

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Dhampur Sugars has announced its results for the January-March period. The company's PBT is Rs 54.36 crore for the fourth quarter this year compared to Rs 14.86 crore for the fourth quarter last year. The total sales for the quarter ending in March 2011 are Rs 349 crore compared to Rs 284 crore for March 2010.

Speaking to CNBC-TV18, Gaurav Goel, managing director, Dhampur Sugars, said that the average price for the sugar segment in this quarter is about Rs 29 per kilogram and world market prices will not have too much of an impact on the company profit in the coming two quarters.

Below is a verbatim transcript of Gaurav Goel's interview with CNBC-TV18's Gautam Broker. Also watch the accompanying video.

Q: If you can first give us your front line numbers we haven't really got them what is the profit and sales figure this time?

A: The total sales for the quarter ending March are Rs 349 crore compared to Rs 284 crore for March of 2010. Our profit before tax (PBT) for the quarter is Rs 54.36 crore as compared to Rs 14.86 crore during the last quarter of March 2010 and PBT is Rs 52.63 crore as compared to Rs 12.67 crore for March of 2010.

Q: What have been the average realizations for the sugar segment in this quarter?

A: Our average price is about Rs 29 per kilogram for this segment.

Q: Where do you see them stabilizing? Do you expect to remain at about Rs 28-29?

A: Rs 28-29 is what we are expecting them for June and September quarter.

Q: What was the average recovery rate for this quarter?

A: It was 9.55%

Q: A word on the power and ethanol realizations? Ethanol would be closer to Rs 27-28?

A: Yes. Our major income for this quarter has come from the power and from the side of ethanol. Our EBITDA profit on power was Rs 64 crore and on the ethanol side was Rs 11.65 crore.

Q: So long term debt stood at about Rs 450 crore at the end of Q5. How has interest cost paned out?

A: Basically, the interest cost as such has gone up not because of our long term debt due to the interest rates going up for our long and our short term debt. We do expect our interest rates to be in the same short of a range over the next 2 quarters. Our long term debt is coming down but because of the higher interest rate, we expect our overall rate of interest to stay the same.

Q: International sugar prices have come down to about 21 cents a pound now. Where do you see them stabilizing and will that steal away some of the upside that you could have got from higher OGL exports if at all?

A: As of now the OGL exports, which have been allowed are only for half a million tonne and obviously the sugar prices have come in the range of 20 to 22 cents, so, without the doubt, higher prices may have had a negative impact on the profitability. However, since we do not export that much during 2-3 quarters, we do not expect that world market prices will have too much of an impact on our profits in the coming two quarters.

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