Dwarikesh Sugar Industries' profitability saw an upswing, driven by the recovery in sugar prices and a notable increase in ethanol production, for the the quarter ended June 30, 2023. The company posted a profit before tax (PBT) of Rs. 59.09 crore and a profit after tax (PAT) of Rs. 40.62 crore. These figures represented a 3.8 percent and 2.4 percent increase, respectively, compared to the same quarter in the previous year.

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Vijay Banka, the Managing Director of Dwarikesh Sugar, told CNBC-TV18 that the company is now gearing up to prioritise ethanol production over sugar.

"Going forward, we will continue to make efforts to sacrifice sugar production and we will try and produce more and more ethanol. On a full season basis, we have sacrificed about 1.39 lakh tonnes of sugar production in favour of ethanol and that's the trend we think should be sustainable going forward," he said.

He also highlighted the company's complete integration in ethanol production, stating, "Our annual capacity to produce and sell ethanol is about 11 crore litres; we are now fully integrated, we don't have to depend on outside molasses."

The company's total income for the quarter came at Rs. 571.54 crore, growing 2.2 percent from the corresponding period last year. Sugar sales in the first quarter of FY24 amounted to 9.70 lakhs quintals, which marked a decline from 15.29 lakhs quintals recorded in the first quarter of FY23.

On a full year basis, margin of 20 percent is sustainable

Banka said that on a full year basis, margin of 20 percent is sustainable for the company, taking into account the different sources of ethanol production. "On full year basis, the margin of 20 percent is sustainable because it will have a mix of both ethanol made out of sugarcane juice directly as well as from B heavy molasses. While the margin is lesser in case of ethanol made from sugarcane juice, it's much better in case of ethanol made from B heavy molasses." he added.

Talking about ethanol prices he said that the industry expects ethanol prices to get better soon. "In so far as ethanol is concerned, the given price as of today it equates to about Rs 37/kg of sugar sales price. So, and ethanol price we expect that to get better in the coming times whereas we have seen sugar prices to be fairly flattish in the last - I mean at least 2022-23 was very flattish. Of course, the prices have got little better from April onwards," he added.

First Published:Jul 25, 2023 1:12 PM IST