Conference Call with Dwarikesh Sugar Industries Management and Analysts on Q1FY25 Performance and Outlook. Listen to the full earnings transcript.
Sugar company Dwarikesh Sugar Industries announced Q1FY25 results: In Q1FY25, the company reported loss before tax (LBT) of Rs 14.99 crore and loss after tax (LAT) of Rs 9.73 crore as compared to PBT of Rs 59.09 crore and PAT of Rs 40.62 crore reported during Q1FY24. Sugar sold during Q1FY25 is 6.75 lakh quintals as compared to 9.70 lakh quintals of sugar sold during corresponding quarter last year. Average realization on domestic sugar sold during the quarter was Rs 3,833 per quintal vis-à-vis realization of Rs 3,608 per quintal during the corresponding quarter last year. Sugar stock as on 30th June 2024 was 11.56 lakh quintals as compared to stock of 9.87 lakh quintals as on 30 th June 2023. Sugar stock as on 30th June, 2024 is valued at Rs 3,360 per quintal. Industrial Alcohol sold during Q1FY25 is 12,358 KL as compared to 30,354 KL during corresponding period last year. Company continued to make cane price payment ahead of schedule and has cleared the cane dues of SS 2023-24 in entirety. On 30th June 2024, the company had outstanding longterm loans of Rs 192.82 crore. SEFASU 2018 loan of Rs 134.48 crore was repaid in full. Outstanding loan amount is in respect of loans availed for the distillery projects at DN & DD units. All the outstanding longterm loans are at concessional rate of interest. Company enjoys long term rating of (ICRA) AA- (pronounced as AA minus). The outlook assigned is ‘stable’. In Q1FY25, the sugar industry experienced subdued sales and off-take compared to the corresponding period last year. Sugar releases saw a notable decline, with nearly 3 lakh quintals fewer sold. The financial results for Q1FY25 were impacted by the cessation of crushing activities during the quarter. This halt resulted in the un-absorption of overhead costs, which typically spreads over operational periods when crushing and production are active. Additionally, the restrictions imposed by the government on the use of cane juice and B heavy molasses for ethanol production further made the situation more challenging. Vijay S. Banka, Managing Director, Dwarikesh Sugar Industries said: The latest projections from the Indian Sugar & Bio-energy Manufacturers Association indicate that sugar production for the 2023- 24 season is set to reach 32 million tons, factoring in a diversion of 1.7 million tons towards ethanol production. According to the recent estimates from the Indian Sugar & Bio-energy Manufacturers Association (ISMA), the gross sugar production for the sugar season 2024-25 is projected to reach 33.3 million tons. However, much depends on the remainder of the monsoon season. More accurate forecasts are expected in the coming months, as the intensity and distribution of rainfall during the monsoon will play a crucial role in determining crop yields and overall production levels. Although there is potential for the resumption of the ethanol blending program, policy regarding possible allowances for sugar exports will perhaps be crafted once more clearer sugar production estimates are available. Sugar prices, which were range bound between Rs 3,800 and Rs 3,900 per quintal, suffered a dent in July 2024 due to extensive rainfall across the country. However, sugar prices have once again surged towards the end of July 2024. Result PDF