BENGALURU (Reuters) – India’s Dalmia Bharat Sugar and Industries reported a 10.8% fall in first-quarter profit on Friday, hurt by higher inventory and expenses.
The company, which supplies sugar to companies like Coca-Cola, Britannia, Dabur, and Carlsberg, reported consolidated net profit of 547.3 million rupees ($6.5 million), compared to 613.4 million rupees year ago.
Revenue from operations rose 15.2% to 9.6 billion rupees. However, total expenses rose 19.2% to 9.01 billion rupees.
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KEY CONTEXT
Indian sugar companies have been battling increased inventory costs. While Dalmia Bharat’s inventory cost rose more than two-fold in the first quarter, rival Dwarikesh Sugar Industries and Dhampur Sugar Mills saw those expenses grow more than five-fold and nearly 10% respectively. India, the world’s largest sugar consumer and second-biggest producer, restricted the use of sugar in ethanol production during the 2023/24 marketing year that ends on Sept. 30 and also prohibited exports to keep a lid on domestic prices, leading to a larger inventory for the companies.
PEER COMPARISON
Valuation (next Estimates (next Analysts’ sentiment
12 months) 12 months)
RIC PE EV/EBIT Revenue Profit Mean No of Stock to Div
DA growth growth rating* analysts price yield
(%) (%) target** (%)
Dalmia Bharat 10.42 7.79 17.19 10.79 Hold 1 0.82 1.25
Sugar and
Industries Ltd
E I D-Parry 38.04 45.55 – – Strong 1 0.89 1.00
(India) Ltd Buy
Dwarikesh Sugar 11.79 8.39 2.36 18.51 Buy 2 0.97 –
Industries Ltd
Balrampur Chini 16.96 12.94 9.35 8.66 Strong 4 0.98 0.62
Mills Ltd Buy
* 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
APRIL-JUNE STOCK PERFORMANCE
— All data from LSEG
— $1 = 83.7250 Indian rupees
(Reporting by Ashish Chandra in Bengaluru)
