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S t r a i n e d q u a r t e r…
Dhampur Sugars reported a muted performance in its Q2FY12 results.
The company’s net sales declined by 6.8% from | 429.3 crore in Q4FY11
to | 400.2 crore in Q2FY12. The slowdown in sales was led largely by a
fall of 37.9% in sugar sales volume. EBITDA margins for the quarter came
in at 11.3% compared to negative margins in Q4FY11. Interest cost was
higher by 24.8% to | 28.0 crore. Hence, in spite of a lower sales an
improvement in margins helped the company to improve its earnings
thereby reporting a PAT of |4.0 crore in Q2FY12 against a loss of | 75.3
crore in Q4FY11. The company has also reduced its debt (long term) to
|487.5 crore from |522.6 crore at the end of Q4FY11 and |496.4 crore on
Q1FY12.
Operational highlights
The company sold 0.98 lakh tonnes of sugar at the average realisations of
| 28.8 per kg. Sugar volumes dipped by 37.9% from 1.58 lakh tonnes in
Q4FY11. Sugar realisations per kg improved on a YoY basis from | 26.8 to
| 28.8 during the quarter. Power sales volume remained flat at 1.8 crore
units with the average tariff being | 4.67 per unit. Distillery sales volume
improved slightly to 8576 kilo litres (KL) compared to 7318 KL in Q4FY11,
however distillery realisations remained flat at | 26.4 per lire.
V a l u a t i o n
At the CMP of | 36, the stock is trading at 11.2x and 5.9x its FY12 and
FY13 estimated EPS of | 3.5 and | 6.1, respectively. Higher sugarcane
cost, volatile sugar realisation and untenable export policy by government
has resulted in poor performance by sugar companies. We believe some
concrete decision on export allowance and decontrol of the sector are
awaited, which could help the millers to protect the margins in future and
help the companies to improve their earnings. We remain cautious on the
stock until further announcements by the government on the due
decisions for the sector and hence, reduce our target from | 75 to | 38
per share
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
S t r a i n e d q u a r t e r…
Dhampur Sugars reported a muted performance in its Q2FY12 results.
The company’s net sales declined by 6.8% from | 429.3 crore in Q4FY11
to | 400.2 crore in Q2FY12. The slowdown in sales was led largely by a
fall of 37.9% in sugar sales volume. EBITDA margins for the quarter came
in at 11.3% compared to negative margins in Q4FY11. Interest cost was
higher by 24.8% to | 28.0 crore. Hence, in spite of a lower sales an
improvement in margins helped the company to improve its earnings
thereby reporting a PAT of |4.0 crore in Q2FY12 against a loss of | 75.3
crore in Q4FY11. The company has also reduced its debt (long term) to
|487.5 crore from |522.6 crore at the end of Q4FY11 and |496.4 crore on
Q1FY12.
Operational highlights
The company sold 0.98 lakh tonnes of sugar at the average realisations of
| 28.8 per kg. Sugar volumes dipped by 37.9% from 1.58 lakh tonnes in
Q4FY11. Sugar realisations per kg improved on a YoY basis from | 26.8 to
| 28.8 during the quarter. Power sales volume remained flat at 1.8 crore
units with the average tariff being | 4.67 per unit. Distillery sales volume
improved slightly to 8576 kilo litres (KL) compared to 7318 KL in Q4FY11,
however distillery realisations remained flat at | 26.4 per lire.
V a l u a t i o n
At the CMP of | 36, the stock is trading at 11.2x and 5.9x its FY12 and
FY13 estimated EPS of | 3.5 and | 6.1, respectively. Higher sugarcane
cost, volatile sugar realisation and untenable export policy by government
has resulted in poor performance by sugar companies. We believe some
concrete decision on export allowance and decontrol of the sector are
awaited, which could help the millers to protect the margins in future and
help the companies to improve their earnings. We remain cautious on the
stock until further announcements by the government on the due
decisions for the sector and hence, reduce our target from | 75 to | 38
per share
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