India's Dalmia Bharat Sugar's profit falls, export ban squeezes margins

Dalmia Bharat Sugar And Industries

28/10/2024 14:01

Oct 28 (Reuters) - India's Dalmia Bharat Sugar and Industries  DLMI.NS  reported a 48.8%
decline in second-quarter profit on Monday, hurt by higher inventory costs due to a sugar export ban,
which weighed on its margins.
    The company, which supplies sugar to companies like Coca-Cola  KO.N , Britannia  BRIT.NS , Dabur
 DABU.NS , said its consolidated profit before tax fell to 378.9 million rupees ($4.5 million) for the
quarter ended Sept. 30, from 740.2 million rupees year ago.
        Total expenses rose 26.8%, led by near-37% jump in inventory costs. This resulted in its
margins contracting to 7% from 9% a year earlier.
  
    However, revenue from operations rose 26.6% to 9.26 billion rupees. 
    
    For further results highlights, click  urn:newsml:reuters.com:*:nFWN3M40T5
    
KEY CONTEXT

    India, the world's largest sugar consumer and second-biggest producer, banned mills from exporting
the sweetener during the 2023/24 season. Since then, domestic sugar companies have been grappling with
increased inventory costs as stocks pile up.
    The government plans to extend the export ban for a second straight year amid prospects of lower
sugar cane output, Reuters reported last month.
           

PEER COMPARISON    
    
                                     Valuation     Estimates (next   Analysts' sentiment          
                                      (next 12        12 months)                                  
                                      months)                                                     
                        RIC        PE      EV/EBI  Revenue   Profit  Mean     No of     Stock to  Div
                                           TDA     growth    growth  rating*  analysts  price     yield
                                                                                        target**  (%)
 Dalmia Bharat Sugar     DLMI.NS    11.56    8.40   15.70    10.97   Hold            1    0.65     1.13
 and Industries                                                                                   
 E I D-Parry (India)     EIDP.NS    10.96    4.29   10.77     NULL   Strong          1    0.80     1.05
                                                                     Buy                          
 Dwarikesh Sugar         DWAR.NS    10.10    6.97    4.47    24.90   Buy             2    0.76    -
 Industries                                                                                       
 Balrampur Chini Mills   BACH.NS    19.87   15.25   10.47     7.88   Buy             4    1.06     0.49
        
* Mean of analysts' ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell

** Ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is
trading above the PT

JULY-SEPTEMBER STOCK PERFORMANCE
    
    
-- All data from LSEG IBES
-- $1 = 84.0480 Indian rupees    


    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Dalmia Bharat Sugar Sept Qtr 2024 vs Peers    https://tmsnrt.rs/3YlDvZt
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Reporting by Ashish Chandra in Bengaluru; Editing by Sonia Cheema)
 ((ashish.chandra@thomsonreuters.com; +91 7982114624;))