Low Finance Cost Helps Dhampur Sugar, Net Spurts 300 Times

Dhampur Sugar has posted an overwhelming performance for the fourth quarter as its net profit surged from meager Rs 16 lakh in Q4FY13 to Rs 50 crore in Q4FY14, an escalation of almost 314 times. The sudden rise in net profit was mainly due to a significant decrease in the finance cost of the company from Rs 40 crore to Rs 28 crore in Q4FY14. On the other hand, the company’s topline remained flat in the fourth quarter at Rs 434 crore as against Rs 462 crore in Q4FY13, a marginal decline of 6.4%. 

The company’s EBITDA also appreciated by 73% to Rs 74.52 crore in the current quarter as against Rs 43.03 crore in the corresponding quarter last year. On consolidated basis, the company’s topline during FY14 remained quite robust as its revenue appreciated to reach Rs 1822 crore as against Rs 1481 crore in FY13, a jump of 23%. However the bottomline of the company got a beating on annual basis, owing to fluctuation in inventories of finished goods and slippage of net work-in-progress from a profit of Rs 22.70 crore in FY13 to a net loss of Rs 78 crore in FY14. 

Though sugar industry is going through a rough patch, company's performance was quite decent as production cost is also rising. However the company’s performance in the sugar segment remained muted, its PBIT from sugar segment has improved from a net loss of Rs 20.11 crore in Q4FY13 to a profit Rs 3.52 crore in Q4FY14. The revenue from sugar also increased from Rs 375 crore in Q4FY13 to Rs 432 crore in Q4FY14, a jump of 15.2%. Chemical and Ethenol segment also reported a decent growth during the fourth quarter as its operating profit improved from Rs 5.59 crore to Rs 11.80 crore during Q4FY14, showing a growth of 111%. On the other hand, the performance of power segment remained flat while other revenue rose from a meager Rs 26 lakh to Rs 2.68 crore in Q4FY14.