IDBI Capital Market showers praise on Dwarikesh

Mumbai: Shahina Mukadam of IDBI Capital Market is of the view that Dwarikesh Sugar is really a good company which is expanding fast, and has a good management. Mukadam told CNBC-TV18, "If you see the quarter numbers of Dwarikesh Sugar they have been extremely good. In fact they did much better than the rest of the industry. In fact for the quarter they reported a sales up by about 61% and profits that were up by 33%. In fact for the full year the story remains."

She further added, "If you see for FY06 the numbers that we expect are going to be substantially higher than the previous year in terms of profits. This is because the capacity expansion that they had planned to 14000 TCD that has taken effect only in January 2006. So really this sugar season is going to see the full impact versus just about 6000 TCD in the previous year."

"The impact of this will definitely be there on profits. On an EPS basis it will be flat simply because they had a GDR and of course there is some bit of debt that was to fund this expansion. Now that is expected to see the EPS to remain flat for the year but even on a flat EPS in FY06 versus FY05 at around Rs 21. It is still available just at around 5 times which I believe is good for a company which is really expanding fast and we would say has a good management."

Disclosure by Mukadam: I don't hold the above stock