Hold Dwarikesh Sugar: target of Rs 31: ICICI Direct

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26 Aug, 2025 12:21

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ICICI Direct's research report on Dwarikesh Sugar

Dwarikesh Sugar (DSL) reported disappointing results with 9.2% decline in operating profit mainly due to muted sugar realisation & rise in cost of production due to lower recoveries. Consolidated revenues saw growth of 19.3% to Rs 381.2 crore led by higher sugar & distillery sales during the quarter. Sugar volumes were up 12.7% given domestic sales quota was higher during festive months. The company sold 1.03 lakh tonnes (lt) of sugar in Q3. However, sugar realisation dipped 2.6% impacted by late announcement of export subsidy, early start of the crushing season & higher domestic sales quota. The company is holding 1.95 lt of sugar as on December 2020. Distillery volumes were up at 0.6 crore litre but still down QoQ impacted by lower offtake from OMCs due to capacity constraints at one of the depots. Distillery realisation was also down 14.4% due to lower proportion of B heavy molasses in the quarter. Despite lower operating profit, PAT rose from Rs 4.5 crore to Rs 7.5 crore due to reversal of tax liability.

Outlook

We downgrade the stock from BUY to HOLD with the revised target price of Rs 31 /share (earlier Rs 34).

For all recommendations report, click here

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