Dwarikesh Sugar Q4 2025 Conference Call

Here are the key highlights from the transcript of the Duaresh Sugar Industries Q4 FY25 earnings call:

  1. Strong Q4 Performance:
  • Profit Before Tax (PBT): ₹87.63 crores (up from ₹55.80 crores YoY).
  • Profit After Tax (PAT): ₹46.33 crores (up from ₹22.89 crores YoY).
  • Total income for the quarter: ₹459 crores (compared to ₹382 crores YoY).
  1. Full Year Financials:
  • Total income: ₹1,365 crores (down from ₹1,721 crores last year).
  • PBT: ₹120 crores (lower than previous year).
  • PAT: ₹75.30 crores.
  1. Operational Highlights:
  • Sugar sales: 5.79 lakh quintals in Q4, slightly higher than 5.69 lakh quintals YoY.
  • Average sugar realization: ₹3,957 per quintal (₹200 higher YoY).
  • Full-year sugar sales: 23.50 lakh quintals; realization: ₹3,834 per quintal.
  • Sugar stock as of March 31, 2025: 15.79 lakh quintals valued at ₹3,727 per quintal (lower than last year’s stock).
  1. Ethanol and Industrial Alcohol:
  • Quarterly ethanol sales: over 3 crore liters (up from 2.11 crore liters YoY).
  • Full-year ethanol sales: 9.44 crore liters (down from 9.94 crore liters last year).
  • Ethanol produced directly from sugarcane juice: 2.69 crore liters (up from 2.09 crore liters).
  • Impact of lower crushing (263 lakh quintals vs. 367 lakh in previous year) affected ethanol and molasses production.
  1. Challenges Faced:
  • Reduced crushing due to lower cane availability, impacted by red rot disease affecting yields and recovery.
  • Red rot significantly affected crop yields and recovery rates.
  • The company exercised tight financial discipline, maintaining a strong balance sheet with long-term loans of ₹147.45 crores.
  1. Varietal Development & Future Outlook:
  • Transitioning away from the older, disease-prone variety 0-238; new varieties like 118, 15021, and 14 are being adopted.
  • Expectation of better yields and recovery in upcoming seasons.
  • Anticipation of improved crushing and production volumes in FY26 and FY27, with a return to pre-2023 levels.
  1. Market and Policy Environment:
  • Global sugar production estimated at a deficit of ~5.46 million tons for 2024-25.
  • Expectation of a surplus in 2025-26, with prices likely to remain firm around ₹4,000 per quintal.
  • The government has allowed export of 1 million tons; ethanol blending target is expected to reach 20% by the end of the current season.
  • Ongoing dialogue with government regarding ethanol pricing; no significant increase in ethanol prices yet.
  1. Industry and Market Dynamics:
  • Global demand-supply scenario indicates a deficit in 2024-25, with a potential surplus in 2025-26.
  • Crushing days in 2024-25 are expected to be among the lowest in recent years (~24-25 days).
  • Industry is awaiting monsoon and production estimates to finalize policies and production plans.
  1. Management Outlook:
  • The company believes the worst is behind, expecting better operational performance in the coming seasons.
  • Focus on reducing costs, improving yields, and increasing ethanol production.
  • The company’s ratings remain strong (AA- by RCRA, A1+ for commercial paper).
  1. Closing Remarks:
    • The management expressed optimism about returning to normal momentum.
    • Thanks to investors for their support and confidence.
    • Anticipates better crushing, higher yields, and improved financial metrics in the upcoming seasons.

These highlights encapsulate the company’s recent performance, challenges faced, strategic initiatives, and outlook for the future.

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