New Delhi: Dwarikesh Sugar Industries Ltd, (DSIL) is an integrated conglomerate primarily engaged in the manufacture of sugar. It is among the top 10 sugar manufacturers in the Country. It has footprints in the business of sugar, power and ethanol. From a single unit set up in 1995 to crush 2,500 tons of sugarcane, it is today a muti-faceted fast growing industrial group. The Company has three sugar plants with infrastructure to crush 21,500 Tons of sugarcane everyday and generate 86 megawatts of power. Out of 86 megawatts of power generated 56 megawatts of power is sold to the State grid during crushing season. It has also forayed in the business of ethanol and has a distillery to manufacture 30 KL of ethanol every day.
All the plants are state of the art and use the latest automated machinery to handle high capacities under most cost effective conditions. Backed by strong infrastructure, well oiled logistic support, credible reputation with framing brethren, Dwarikesh has always clocked high recovery rates. It is one among the very few sugar companies who have been regular in paying sugarcane dues to the farmers. Dwarikesh is focused on sustainable growth based on the inclusive development of all its stake holders. The ethos imbibed at all levels in Dwarikesh is dynamism, loftiest business ethics and credible excellence.
Q 1 - year 2009-10 - glimpses:
. Net sales of INR 165 crores, up by 35% as compared to same quarter, previous year
. Earnings before tax - INR 33.44 crores, vis-à-vis INR 4.60 crores in the same quarter, previous year.
. EBIDTA of INR 50 crores as against EBIDTA of INR 30 crores recorded in same quarter last year. EBIDTA margin as a % of net sales - 30%
. Cash profit of INR 41.50 crores
. EPS (not annualized) - INR 20.49 per equity share of INR 10 each
. CEPS (not annualized) - INR 25.39 per equity share of INR 10 each
. Improved financial performance mainly attributable to northward journey of sugar prices and contraction in interest costs.
. Delayed start of season caused by agitation of farmers for higher sugarcane price.
. Recoveries clocked lower than in last year.
. Scamper for sugarcane continues
Going forward:
. Buoyancy is sugar price - expected to sustain.
. Global deficit in sugar production estimated at 13.5 million tons for the season 2009-10.
. Supply side constraints, a harsh reality, at least in the near foreseeable future
. Power revenues to smother the downside effects of fluctuating fortunes of sugar business.
. New energy policy announced by the State to be the key driver of power business in the State. Would result in optimal utilization of investments in assets to generate power and may galvanize further investments
. Incidence of interest costs which has historically plagued the profitability of sugar industry is expected to ease in the next couple of years. The coming years offer scope for deleveraging and financial reengineering.
Mr. G R Morarka, Chairman and Managing Director, said that the sugar industry has now entered an exciting phase. For the second year in succession there is gap between consumption and production. While the supply side constraints continue to pose challenges galore, your Company has responded admirably to these challenges and is making every perceivable effort to enrich the shareholders wealth. The situation as it prevails today is unlikely to change drastically in the immediate future. The surge in the sugar prices is expected to sustain for a couple of years as the sugar industry worldwide grapples with the problem of lower production.
However as is famously said '' to be uncertain is uncomfortable. However to be certain is absurd". We firmly believe that there is no room for complacency. Our spotlight would be on cost rationalization and efficiency maximization. We will remain agile and be nimble-footed in seizing any business opportunity that may arise. We are poised to further ride the growth curve in the times to come.
For further information, contact:
Vijay S Banka.
Dwarikesh Sugar Industries Ltd.,
Tel: 91 22 22832468
Facsimile: 91 22 22047288
Email: vsbanka@dwarikesh.com
