Dhampur Sugar Mills Ltd
NSE:DHAMPURSUG
Dhampur Sugar Mills Ltd
NSE:DHAMPURSUG
Price:
155.35
INR
7.82%
Market Closed
Market Cap:
₹10B
Add Note
Add Target
Capture your thoughts and set a target
Decide at what price you'd be comfortable buying and we'll help you stay ready.
Based on
Margin of Safety
0%
10%
20%
30%
40%
50%
Your Price Target
Linked to
current price
· In Buy Zone
Loading
Note attached
Choose the stock you wish to monitor with a price target
Popular Picks
|
Johnson & Johnson
NYSE:JNJ
|
US |
|
Berkshire Hathaway Inc
NYSE:BRK.A
|
US |
|
Bank of America Corp
NYSE:BAC
|
US |
|
Mastercard Inc
NYSE:MA
|
US |
|
UnitedHealth Group Inc
NYSE:UNH
|
US |
|
Exxon Mobil Corp
NYSE:XOM
|
US |
|
Pfizer Inc
NYSE:PFE
|
US |
|
Nike Inc
NYSE:NKE
|
US |
|
Visa Inc
NYSE:V
|
US |
|
Alibaba Group Holding Ltd
NYSE:BABA
|
CN |
|
JPMorgan Chase & Co
NYSE:JPM
|
US |
|
Coca-Cola Co
NYSE:KO
|
US |
|
Verizon Communications Inc
NYSE:VZ
|
US |
|
Chevron Corp
NYSE:CVX
|
US |
|
Walt Disney Co
NYSE:DIS
|
US |
|
PayPal Holdings Inc
NASDAQ:PYPL
|
US |
Good day, ladies and gentlemen. Welcome to the Dhampur Sugar Mills Limited Q3 FY '24 Earnings Conference Call.
[Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Navin Agarwal, Head Institutional Equities at SKP Securities Limited. Thank you, and over to you.
Good afternoon, ladies and gentlemen. It's my pleasure to welcome you on behalf of Dhampur Sugar Mills and SKP Securities to this financial results conference call. We have with us Mr. Gaurav Goel, Managing Director; and his colleagues, Mr. Susheel Mehrotra, CFO; Mr. Vinit Gupta, VP Finance; and Mr. Akshat Kapoor, VP Operations. We'll have the opening remarks from Mr. Goel, followed by a Q&A session.
Thank you, and over to you, Gaurav.
Thank you. I'm Susheel Mehrotra. Good afternoon, ladies and gentlemen, and a very warm welcome to all Dhampur Sugar Mills Q3 FY '24 Earnings Conference Call.
First of all, I'd like to give you an update about the equity share buyback program of the company. As you are aware that the Board of Directors had approved a buyback of up to 10 lakh equity shares at a price not exceeding INR 300 per share through tender offer route. The total size of buyback approved was INR 30 crores. The buyback commenced on 23rd January 2024 and closed on 30th January '24. We received offers for over 73 lakh shares. As per terms of buybacks, 10 lakh shares have been bought back, and paid up capital of the company now stands INR 65.38 crores. The payout to the shareholders for the shares bought back has been done yesterday, that is 6th of February 2024.
Now coming to the key regulatory changes that impacted this quarter. As you are aware that on 7th of December 2023, Department of Food and Public Distribution ordered all sugar mills to stop use of sugarcane juice or syrups and B-Heavy molasses for production of ethanol with immediate effect. Then on 18th of January 2024, Government of Uttar Pradesh announced increase of sugarcane SAP by INR 20 per quintal for the sugar season '23, '24. The impact of the same has been considered by the company in the financials for December '23 quarters.
Let me now come to the quarterly performance and results. First, the operating numbers. In Sugar segment, the company crushed 13.46 lakh tonnes of sugarcane in this quarter versus 12.98 lakh tonnes in the corresponding quarter last year, an increase of about 4%. The company diverted 0.96 lakh tonnes of cane for production of ethanol through syrup as against 2.41 lakh tonnes in the corresponding quarter last year. The company stopped diverting sugarcane syrup for ethanol production pursuant to the order of 7th December 2023 from the Department of Food and Public Distribution. The gross recovery in this quarter stands at 11.01% versus 11.34% in the corresponding quarter last year.
On account of higher cane crush and discontinuing of diversion of syrup to ethanol, sugar production during the quarter is 1.29 lakh tonnes versus 1.02 lakh tonnes in the corresponding quarter of FY '23, an increase of nearly 26%. Sugar sales during the quarter stands at 0.25 lakh tonnes versus 0.73 lakh tonnes in the corresponding quarter last year. Average sugar realization in this quarter has been INR 39,236 per tonne as against INR 35,332 per tonne in the corresponding quarter last year.
In Ethanol segment, the production from syrup route is 64.46 lakh liters in this quarter versus 166.30 lakh liter in the corresponding quarter of last year, lowered by 61% approximately, which is primarily due to discontinuation of use of sugarcane juice for ethanol production as per government order. The ethanol production from B-heavy molasses is 174.01 lakh liter in this quarter versus 73.66 lakh liters in the corresponding quarter of last year. The ethanol production from damaged food grain is 27.48 lakh liters and from maize is 29.02 lakh liters, aggregating to 56.50 lakh liters in this quarter.
Our grain-based distillery produced 38.06 lakh liters ethanol in June to September '23 quarters. Total ethanol production from all feedstock is 294.97 lakh liter in this quarter versus 239.96 lakh liters in the corresponding quarter of last year, higher by about 23%. Sale of ethanol produced from syrup is 64.76 lakh liters in this quarter versus 157.53 lakh liters in the corresponding quarter of last year, from B-Heavy molasses 150.62 lakh liters in this quarter versus 75.80 lakh liters in the corresponding quarter of last year.
Sale of ethanol produced from damaged food grain stands at 21.07 lakhs liters and from maize 32.29 lakh liters aggregating to 53.36 lakh liters in this quarter. In September '23 quarter, we sold 34.68 lakh liters ethanol produced from maize. The total ethanol sales from all feedstock is 268.69 lakh liters in this quarter versus 233.33 lakh liters in the corresponding quarter of last financial year, an increase of 15% approximately. Production of ethyl acetate has been 52.9 lakh kg versus 85.33 lakh kg and the sale of ethyl acetate has been 52.44 versus 85.34 lakh kg as compared to corresponding quarter of last year.
Now coming to potable spirits, the production has increased to 5.57 lakh cases from 4.46 lakh cases, and the sale has increased to 5.65 lakh cases from 4.43 lakh cases in the corresponding quarter last year.
Now coming to the financial numbers of the company. Profitability in the current quarter is down mainly due to the lower sugar sales quantity by 0.48 lakh tonnes. Sugar sales during the quarter has been 0.25 lakh tonnes versus 0.73 lakh tonnes in the corresponding quarter of last year. Revenue from operations during the quarter ended December '23 stands at the INR 482.3 lakh crore versus INR 643.5 crores. EBITDA is at INR 69.5 crores versus INR 86.0 crores, and PBT is INR 47.5 crores versus INR 66.7 crores. Cash profit is INR 55.3 crores versus INR 68.7 crores in the corresponding quarter last year. The inventory valuation rate of sugar is INR 35,182 per tonne. Inventory of sugar as on 31st December '23 is 1.07 lakh tonnes as against 0.71 lakh tonnes as of 31st December '22.
Let me now take you through the business-wise performance. On the revenue mix for the quarter, Sugar has contributed 34.8% of the quarter revenue, which is down from 50.4% of the corresponding quarter last year. Ethanol is at 26.3%, up from 19%. Power is at 10.9%, again up from 8.4%. Revenue from chemicals is 6.8% as against 8.4%. And potable spirits is at 20.2% as against 13.1% in the corresponding quarter of last year.
Our revenue from sugar business is INR 233.4 crores as against INR 421.1 crores, from ethanol business is INR 176.3 crores versus INR 158.7 crores, from power business is INR 73.5 crores as against INR 70 crores in the corresponding quarter of last financial year. Revenue from chemicals business is INR 46 crores versus INR 70.2 crores, and revenue from potable spirits is INR 135.4 crores versus INR 109.3 crores in the comparable quarter.
Now due to lower sugar sales, our Sugar business has incurred a loss of INR 6.6 crores in the quarter as against profit of INR 15.7 crores in the corresponding quarter. The current quarter numbers are after considering the cane price hike. Profit from power business is INR 29.1 crores versus INR 24.6 crores, from ethanol business is INR 22.8 crores versus INR 35.9 crores, from chemical business is about INR 1 crore versus INR 6.4 crores. And from potable spirits business, it is INR 1.8 crores against a loss of INR 0.8 crores.
Now coming to consolidated results. Revenue from operations during the quarter stood at INR 482.4 crores versus INR 632 crores (sic) [ INR 642 crores ]. EBITDA is INR 69.7 crores versus INR 86.4 crores. PBT is INR 47.8 crores versus INR 67.1 crores. And PAT is INR 31.8 crores versus INR 46.4 crores. The cash profit on a consolidated basis is INR 55.5 crores versus INR 69.1 crores.
So these are significant operating and financial numbers for the quarter. Thank you once again for joining us on this conference call. We will be happy to answer any questions that you may have. Thank you.
[Operator Instructions] We have a first question from the line of Jheel Thakkar, an individual investor.
Sir, I just wanted to know how much ethanol do we expect to produce in C-Heavy syrup and B-Heavy in FY '24, '25? And also what would be our selling price of the C-Heavy ethanol and ENA?
So basically, obviously, it will be lower than what we had done last year. So on C-Heavy, we will produce a bit more for FY '24, around INR 8 crores is the total sales that we plan to do for FY -- that will be FY '24, '25 actually because now we already -- for Q3, Q4, it will be over. So our total sales still [indiscernible] year, which is still 31 10 will be about 8 crore liters. And the C-Heavy price is 56, and the B-Heavy and the syrup price as of now, they have not set for the year '23, '24, the year '24 -- for the year '23, '24. So we are still taking it to be the same as what it was for the year '22, '23.
With respect to the change in procurement policy that has been brought in?
Excuse me?
I mean to say what is the impact on the change in the procurement policy that has been announced by the government, what is the impact on our financials?
See, on the numbers as of now, it's still early days because we're really making more sugar. Earlier, we would have diverted more out of syrup or out of B-Heavy. But now we're going to make more sugar for the year '23 -- for the year '24, '25. So what will be the price of sugar that we will drive out of that will impact the numbers for '24, '25. We do believe that India still has a stable amount of stock, so sugar prices should be healthy because of which it's hard to say, but I think that we will be able to compensate the loss that we have because of this change of policy vis-a-vis the more sugar that we'll make for the year '24, '25.
[Operator Instructions] We have a question from the line of Sanjiv Damani from SKD Consulting.
[Foreign Language] I really congratulate you for the fine performance put up. My worries are about the continuing rain in the North India and maybe in our field also. So can I firstly know what is the status of the crop in our command area? And if yields are okay or lower than last year?
[Foreign Language] that we know North India, especially in the western part was on the higher side. So because of that, we had a bit of flooding. So yields are for surely slightly lower, but they are not that much lower than what we had expected. Secondly, as of now, also in the last about 2 weeks, we had some rains. But the rains have all stopped. There is sunlight, which is out in all -- in both of our plants. So we're expecting that this rainfall will have a positive impact, the rainfall, which happened in the last, call it, 1 week. And now we are seeing that with the -- so the -- if we see that we are now having great sunlight in the day and it's [Foreign Language] at night, [Foreign Language]. So I believe that the yield for surely are lower vis-a-vis last year as of now, but [Foreign Language] now we will see [Foreign Language].
Okay. So sir, crushing in the last con call, you had mentioned that we will have less cane to crush in this season. So the position remain same? Or there is some change in that?
It stays the same because as you know that we had a new plant, which came very close to our plant at Dhampur, so which has taken away a part of our cane, Rajpura also because of heavy rains and flooding. There we had an impact on yield. So yes, we for surely are expecting to crush lower than what we did in the year '22 [Foreign Language] total will be lower.
Can we quantify it right now, sir? How much are we going to...
So it's very hard to say. It will not have -- I mean there will be a marginal -- there will be an impact. But again, as I said to you that with the cane crops after being in business for 28 years, till the last date, I can assure you that no one can give you exact thing, but we will be [indiscernible] but we are hoping that we won't be that much lower than what we all will -- that we were last year.
Sir, if I'm not wrong, you had estimated that almost 30 lakh quintals will not be available to us. I mean do I remember it rightly, sir?
[Foreign Language] That is what I had said. We are still sticking to the same over the last year. And hopefully, we'll be better than that, but that is the number that we have as of now.
Okay. And one more thing, sir, if I am allowed. I learned from some other sources that there is a [ rot ] problem in this area of Bijnor and all that. So I mean, we are not affected. Can I get the assurance that we are...
Sir, in Dhampur, if I see the area, which I had got into, red rot is very, very small as of now. But yes, it has started impacting it, and we've already made plans on that. We have a 5-year plan. Rajpura, the impact was slightly higher, red rot. But plans have been made to make sure that those [ seeds ] are taken away and new varieties of seeds are being planted as we speak. But yes, red rot in 238 has started, is still very small, but it can catch really fast. So we have to make sure that we start to work, and we already started to work for it for the last [Foreign Language] because all the crop that we have, as you know, is all 238. So that has to be changed now.
Okay. One more thing I want to know, sir, that while the sugar season is on, we have set up a grain-based distillery also. So are we able to run it based on the grain availability, like maize and rice, grain, et cetera?
So our 100 kl grain plant has been on from the day it started. It is still on as we speak. But obviously, because the grain and the maize price -- because the rice and the maize prices have all gone up, margins there are lower vis-a-vis what we were expecting earlier when we had put up the plant. But our plant is running at full.
And sir, maize prices have been -- I mean the ethanol made from grain has been revised by some INR 6, INR 7 recently. So is it not helping, sir?
Sir, it has helped. But what has also happened is that maize prices also gone up. [Foreign Language].
I mean, can we not -- I mean, what is our estimate about the grain prices in coming days? Are they likely to come down or they will remain here only for 1 more year?
[Foreign Language] This is a question which I've been asking my team, with there being no answer because even for us, this is a new trade [Foreign Language].
Okay. Okay. But I mean, if the grain -- I mean, maize, rice being grown in our surrounding areas?
Sir, I don't believe the maize or -- the maize prices to be down very, very much. They might be down by INR 0.50 or INR 1, but I don't expect them to be down to the levels we all saw 2 years back.
Okay. So we are not making any money, or we are making thin money in grain distillery.
Thin money, sir. Thin money. We are making money.
[Operator Instructions] The next question is from the line of Avinash Nahata from Parami Financial Services.
My question is regarding the prices, how they have behaved before the announcement of SAP over the last 3, 4 months? And what are the ex-factory prices -- exit prices as of this quarter ended 31st December and the current prices, if you can comment, please?
Are you talking about the price of...
Sugar prices, ex-factory sugar prices.
Okay. So our ex as of 31/12/2023, our average price was INR 39.2. As of now, the present prices, which are hovering, is about INR 37.5 to INR 38.
Okay. So it has come down by INR 1.5.
About that. Yes. Yes. That's right. But this is also expected, right? So this is -- if you see up till the time that -- up until March, prices are always on the lower side. And this is not only for the year 24, but it's been for as many years. It is only after about April, May, the prices again start to go up.
So what is the expectation looking at the overall scenario basis the crop expected and the -- whatever embargoes are there on export, et cetera? What is your expectation?
I believe prices to be stable. They should be in the range of about INR 38 to INR 38.5 for the whole year.
[Operator Instructions] The next question is from the line of Udit Gupta, an individual investor.
Sir, what is our recovery looking like? And sir, is it any better than last year?
No, it will not be better than. I mean, at Dhampur, we should be almost same as what we were, what we were last year. And at Rajpura, we should be about 0.2 lower than what we were last year.
So the reason would be red rot?
Yes. Red rot and heavy rains that we had in June, July. So these are the 2 main impacts that we've had.
Okay. And sir, what was our gross recovery last season?
Our gross recovery for the whole year...
It was 12.04 for the full financial year.
12.04. So we are expecting about 0.2% less this year.
Yes.
Okay. And sir, any other further CapEx plans that you might have or any things that we are right now discussing at the board level or at the company?
No. So there are no plans as of now. We are going to wait until about April once the plants will all closed. After that only, we'll think about any because our plants are all pretty much geared up for the cane credit that we have. Even our capacity for the OMCs is all set. So we really do not need any real CapEx on both of the sides of sugar, chemical and all as of now. So there is no major CapEx plan planned. But obviously, we are studying about CBG, potash, all these things that we all are thinking about, but we are still in a wait and watch mode. So no plans have been made. I think post about May is when we actually think with the Board, if there's any further CapEx that we really have to do for the year '24, '25.
And sir, can you explain this compressed biogas opportunity, like, what is it like? And like from the [indiscernible] what we can do here?
Biogas is a great opportunity. The only issue is of offtake even though IOC and all of them have said yes, that they will offtake it. The only issue is that as of now, we don't have pipelines, which are running through our plants. And to put it into tankers and then to have it sent to IOC becomes extremely expensive. So that is only a challenge that we have, otherwise to make CBG is not that tough. We have press mud from which we can make that, but we have to just wait and see as to how the offtake will really happen. So that is only a challenge. And I think that Government of India is aware of that, and they are trying to work with the OMCs as to how to solve the issue. And I do believe that in the next about 6 to 9 months, we'll have great answers for the same.
And sir, this press mud, sir, is generated in the sugar making or the ethanol process?
Sugar mill. So basically, after you crush basically the mud which comes in the cane that become press mud, which has got inherent qualities from which you can make biogas out of that.
[Operator Instructions] As there are no further questions, I would now like to hand the conference over to the management for closing remarks. Over to you, sir.
On behalf of Dhampur Sugar Mills, we would like to once again thank you all for taking your time out for this conference call. If you have any further questions, please feel free to contact us either by phone or by e-mail. You can also visit our website, www.dhampursugar.com, and post any queries you have, and we'll get back to you as soon as possible. Thank you.
On behalf of SKP Securities Limited, that concludes the conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.