Net Profit at Rs 11.61 crore, Operating Margin leaps 750%

MUMBAI: April 15, 2005: Dwarikesh Sugar Industries Ltd, an integrated sugar manufacturer, today announced a 1.75 percent growth in Sales at Rs. 43.03 Crores for the second quarter ended March, 2005. The company crushed 80.14 lakhs quintals during the sugar year as compared to 75.18 lakhs quintals during the sugar year 2003-04. The rise in sales was driven by a better realization in sugar sales.

Explaining the growth strategy and Q2 performance, Mr. Gautam R Morarka, Chairman and Managing Director, Dwarikesh Sugar Industries Ltd said," It is an exceptionally good quarter. Our capacity utilization is at 100% added by a better realization of sugar prices. Our profits have touched Rs. 11.61 Crore. Successful and timely commissioning of the distillation plant and expanded co-generation capacity has helped boost our bottom line."

"Our work of the new greenfield project of 5500 TCD is progressing as per schedule and will commence production by November 2005 and will contribute for the entire sugar cycle SY 05-06. With the likelihood of the Government re-introduction of compulsory blending of petrol with ethanol, the distillery division would continue to be a profit generating centre for the company. " he added.

The recovery has moved up to 10.47% estimated (second highest in U.P.) during the sugar season 04-05 as compared to 10.39 percent for the sugar season 03-04 driven by the efficient cane procurement. Operating Margin moved to 35.70% for the second quarter as compared to 4.76% during the previous corresponding period with a blend of higher crushing, better recovery and cost control measures.

Mr. J R Banka, Chief General Manager - Corporate Affairs, said "We are consistently building on our operation efficiencies at all levels. Improved recoveries, and a lower cost of average borrowings are contributing to our bottomlines. Our average cost of finance has come down substantially. We have been amongst the first to completely clear all cane price arrears for earlier years and Cane dues for the current season.

Half Yearly performance

For the half year ended March,2005, the Sales rose by 10.53% to Rs. 77.99 crores and Net profit rose to Rs.17.28 crore. The company commenced its production of distillery unit of 30,000 litres per day in February, 2005. The expanded capacity of co-generation of power commenced in November 2004.

About Dwarikesh Sugar Industries Ltd

Dwarikesh Sugar Industries Ltd made a successful IPO in November, 2004 raising Rs. 32.50 crores. The company's IPO of 50 lacs shares at a premium of R.s 55 per share (Face value Rs. 10 ) was oversubscribed 23 times. The company currently has a crushing capacity of 6500 TCD, 17 MW Co-generation power unit and a distillery with capacity of 30,000 litre per day. The Company exports around 7 MW to UPPCL.