Corporate Feature     

Published: Apr 30, 2023
Updated: Apr 30, 2023

Dhampur Bio Organics (DBOL)

From sugar to bio-fuels

Dhampur Bio Organics (DBOL), the demerged entity of Dhampur Sugar Mills with a legacy of 90 years, got separately listed on both NSE and BSE recently.

In its new avatar, DBOL has chalked out a concrete business plan to accelerate its pace of growth. It’s a leading, integrated sugarcane processing company manufacturing refined and raw sugar, bio-fuels, biomass-based renewable power and other related products.

BIO-FUELS TOO

DBOL is also ahead in biofuels and spirits on BH molasses with a capacity of 3,12,500 LPD at a single location of its Asmoli plant. Interestingly, the company has created a power generating capacity of 95.5 MW put together at all three units through a renewable energy route.

In order to meet enhanced demand, DBOL has increased its domestic spirits manufacturing capacity from 2.8 million cases per year to 4.2 million cases at the Asmoli unit, where it has also recently commissioned an 80 TPD carbon dioxide plant.

During the recently concluded FY23, the company has produced 980.59 lakh BL ethanol vis-à-vis 456.03 lakh BL in the previous year and achieved sales of Rs 980.59 crore against Rs 456.03 crore of the same in the previous year. The average sales realization of ethanol has gone up by Rs 4.76/ltr to Rs 60.83 over Rs 56.07/ltr in FY22.

FINANCIALS UP

On a consolidated basis, the company has fared impressively and its total revenue has gone up to Rs 2,648.60 crore (PY Rs 1,564.09 crore) with EBIDTA of Rs 212.91 crore (PY: Rs 194.20 crore). The interest outgo has increased to Rs 40.74 crore (PY: Rs. 29.66 crore) and profit after tax to Rs 112.02 crore against Rs 104.05 crore, translating into EPS of Rs 16.87 for FY23 (PY: Rs 15.67). It is worth pointing out that despite being in a seasonal business, the Q4 EPS has remained quite high at Rs 12.08 vis-à-vis Rs 16.87 for the whole year. However, the profitability is not commensurate vis-à-vis the impressive growth registered in revenue. The company has declared a dividend of 35% on an equity capital of Rs 66.39 crore and Rs 10 face value. The book value per share comes to Rs 138.93.

The promoter group holds 50.22%, FIIs 5.34% and individual shareholders 37% as on March 2023. DBOL’s long-term borrowings have increased to Rs 246.32 crore against Rs 168.40 crore in the previous year. However, its working capital has been reduced to Rs 460 crore from Rs 645 crore in FY22 whereas the debt-equity ratio has witnessed a modest change from 0.18 times to 0.25 times. CARE Ratings has assigned an A+ rating (outook: stable) to the company for long-term and short-term facilities. DBOL repaid long-term loans of Rs 62.08 crore during FY23. As on year-end, the company has capital work-inprogress of Rs 36.17 crore.

The sugar production during the last season (Oct-Sept) has come down at home. The carried forward sugar stock was also less compared to the previous year. Moreover, in some of the largest sugar- producing countries like Cuba, production has been affected due to poor rains. Further, a diversion of sugarcane juice towards ethanol is on the increase in India.

Considering these developments, it certainly looks like the retail price of sugar, which has already started moving upwards, will continue its northward journey and in the process leading and well managed integrated sugar mills will be benefited. DBOL is one of them. The stock can be accumulated at every decline in small lots.