Gaurav Goel, Managing Director of Dhampur Sugars, in an exclusive interview with CNBC-TV18, says that he expects to manufacture 35 lakh tonne sugar for full year. He sees the sugar prices to be stable and to cost around Rs 25.4 per kg. Goel also expects the coming quarter to be positive.
Gaurav Goel, Managing Director of Dhampur Sugars, in an exclusive interview with CNBC-TV18, says that the company expects to manufacture 35 lakh tonne sugar for full year. He sees the sugar prices to be stable and to cost around Rs 25.4 per kg. Goel also expects the coming quarter to be positive.
Below is a verbatim transcript of the interview with Latha Venkatesh and Gautam Broker. Also watch the accompanying video.
Q: Can you run us through the numbers. What have you done by way of sales and profit?
A: Our sales for the quarter are Rs 502 crore. Our EBITDA is Rs 40.81 crore and our profit after tax (PAT) is Rs 7.42 crore. Last year our sales were at Rs 341 crore for the same period while the profit was at Rs 57.7 crore last year.
Q: What do you attribute this substantial fall in the profit numbers?
A: Profits have come down due to lower sugar prices. In the last year, at this point of time sugar prices were at their peak. Post March the prices have come down substantially. Hence, due to the lower sugar prices you have seen this drop in profits.
Q: What were the total sales in this quarter?
A: The total sugar sales in the quarter is at1.54 lakh tonne.
Q: Have you cleared your high cost inventory? You were holding about 1.35 lakh tonne at the end of Q4 last year at Rs 26.25 per tonne. Has that been cleared this time?
A: The whole of the high cost stock of last year has been cleared by this quarter.
Q: What is the costing of the new production this time?
A: The sugar cost of the new production is Rs 25.4 per kilogram.
Q: What do you expect that you will be doing by way of realisations in the current quarter?
A: The sugar prices being in the range of Rs 29 to Rs 30 per kg and in this quarter the prices will stay stable. I do not expect any upward movement from these sorts of ranges. So seeing that and with average cost at Rs 25.4 we do believe that this coming quarter should also be positive.
Q: What kind of margins would be targeting for the next quarter?
A: It is very early but our stock valuation is at Rs 25.4 and with prices at Rs 29 to Rs 30, there should be good margins even out of the sugar side. The power and the alcohol side will continue to do well because of the policy of ethanol now starting. Hence, all three divisions should contribute positively over the next three quarters.
Q: What have you made by way of revenues from the power and the chemicals divisions?
A: Most of the profits have come from the power side. Out of this on EBIT level Rs 24 crore has come out of the power side and about Rs 2 crore have come out of the alcohol side. If we compare this to last year, the alcohol side was negative in the last quarter; the power side numbers are almost same.
Q: You have incurred a loss in your sugar sales this time?
A: Sugar sales we had a profit of about Rs 2 crore on the EBIT level.
Q: What is your expectation for the full year production this time for Dhampur Sugars?
A: For Dhampur Sugars, we should do approximately 35 lakh tonne of sugar is what we plan to manufacture in this whole year.
Q: How would the margins look in this quarter which is under review?
A: The margins have been okay. On the sugar side, they were under pressure; they got compensated by the power income. In the March quarter, both on the power, sugar and the alcohol side, we do believe that the margins would be substantially better than this quarter under review.
Q: Last quarter you had some pledged shares as well which you had referred to, any of those unpledged?
A: None of our promoter holding is pledged. The only pledged shares are to the banks and FIIs against the loans taken by the company. There is no personal borrowing by the promoters against the shareholding.
Q: Can you give us an idea of any capex plans that you may have?
A: There are no real capex plans as of now. The capex plans would be finalised in March. Post the numbers of March are out, the capex plans would be made for this coming year.
Q: 3.5 million tonne implies about 15% to 16% production growth this time. What is your estimate of the total Indian production this time?
A: The total Indian production this time will be close to 25 million tonne.