Shares of Dalmia Bharat Sugar and Industries slipped 1.3 percent to Rs 430 on November 20 after the company informed operational disruption at Kolhapur and Ninaidevi units in Maharashtra because of farmer protests. The S&P BSE Sensex traded flat at 65,776 levels, as of 11:00 am.
In the past one month, the sugar stock has lost 2 percent as against a 0.6 percent rise in the benchmark Sensex. The Dalmia Bharat Sugar shares hit a 52-week high of Rs 490 on November 7.
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In the September-ended quarter, the company's total income jumped 6 percent on-year to Rs 787 crore, while earnings before interest, tax, depreciation, and amortisation (Ebitda) surged 59 percent on-year to Rs 121 crore.
Dalmia Bharat Sugar's profit-after-tax (PAT), too, climbed over four-fold or up 369 percent year-on-year (YoY) to Rs 55 crore in the September-ended quarter. The management said that sugar sales volumes and higher distillery volumes helped the company clock better income in Q2FY24.
As of November 2023, four out of five sugar plants were in operation during the crushing time for sugar season (SS) 2023-24. All three plants in Uttar Pradesh and one in Maharashtra commenced operations.
According to International Sugar Manufacturing Association (ISMA), gross sugar production estimates before diversion into ethanol for SS23-24 is expected to be lower at 33.7 million metric tonnes (MT) due to lower production seen in Maharashtra and Karnataka and agro-climatic conditions.
The organisation also expects the sugar prices to remain in the upward trajectory as they have firmed up in the last two-three months.
Valuation-wise, the stock of Dalmia Bharat Sugar was trading at 11.6 times (x) price-to-earnings ratio (PE), lower than sector's average of 43x PE multiple.
According to shareholding pattern data, foreign institutional investors (FIIs) increased their stake in the company to 0.97 percent in the September quarter from 0.9 percent in June quarter.
Mutual Funds, too, upped their stake to 0.02 percent in September 2023 period from zero in the previous quarter.
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