CNBC interview with Mr G R Morarka, CMD

-On whether the company's margin expansion from 4.76% to 35.70% is sustainable in the next two quarters:

We definitely feel that the margin expansion is sustainable, mainly because of the rise in sugar prices from last year, which was bad for sugar. Also, with our co-generation and distillery units gone into commissioning, we are definitely confident of our revenues, and consequently about the line.

-On inventories and the expected sales performance in the remaining quarters:

We have 7.5 lakh bags of sugar with us. Seeing the current year's production levels, even assuming a 130 lakh tonnes, we do not foresee much of a fall of prices in sugar, as compared to the present rates. I feel the next six months should be good. In realisations, we had about Rs 1670 per bag, and I estimate a range between Rs 1650-1700 for the next six months.

-On the revenues and profits expected ahead:

Probably better. It would be difficult to estimate, because sugar prices are quite beyond one's estimate. But considering the distillery and the co-generation additional revenues that we are going to generate, I feel that it should be better at a little less than Rs 40 crore in profits. It will not be proper to disclose the exact figures as such.

Dwarikesh Sugar has posted a net profit of Rs 11.60 crore (Rs 116 million) as against a loss of Rs 1.60 crore (Rs 16 million). The company's Q2 sales are at Rs 40.40 crore (Rs 404 million) from Rs 38.90 crore (Rs 389 million). Its operating margin is up from 4.76% to 35.70% and recovery is up from 10.39% to 10.47%.

CNBC
Date: 15-4-2005