Dalmia Bharat at new high

Dalmia Bharat Sugar posted a fantastic set of earnings for Q1FY21. A 51% (YoY) rise in revenue from operations at Rs.898 crore and a 20% jump in other income helped the company end Q1FY21 with a net profit of Rs.126 crore, a jaw dropping 131% increase.

The company had ended FY20 with a net profit at Rs.1980 crore and in current Q1 itself, net profit is already 64% of the entire 12 months.

The revenue of Q1FY21 also includes Rs.131.57 crore export subsidy on export of sugar and fulfilment of eligibility criteria of minimum 50% export against the Maximum Admissible Export Quantity (MAEQ).

EBITDA for the quarter came in at Rs.213 crore, up 101%.

In terms of sales volume, sugar rose 51%, distillery by 17% while cogen fell 10%. Thus as per our Editor, Mr.SP Tulsian, it is the high quantity sale of sugar which helped this earnings which otherwise would have come in the next quarter. At the current price, he has advised an exit from the stock.

Giving its outlook for the sugar sector, the company said, “India Sugar inventory as on 30" Sept 20 is likely to drop to 11.3 M Mt from 14.5 M Mt as on 30" Sept 19 on the back of lower production and higher exports. However, for the upcoming year, sugar inventory is expected to increase marginally to 11.8 M MT. Various proactive measures like increase in MSP, Export subsidy etc. are under consideration by Central Government for SS 20-21 which will be positive for the industry. However, FRP increase, if any may partially offset the benefits of these measures. Overall we remain cautiously optimistic for the near term prospects of the industry.”

The stock price has reacted positively to this news. From its close of Rs.123.80 on Friday, within minutes of opening it shot to a new high of Rs134.