Dwarikesh Sugar Industries Ltd Gains 9.78%: 3 Key Factors Driving the Weekly Rally

9 February 2026: Mojo Grade Upgrade Sparks Initial Gains

The week commenced with MarketsMOJO upgrading Dwarikesh Sugar Industries Ltd’s Mojo Grade from 'Strong Sell' to 'Sell' on 6 February 2026, reflecting a nuanced shift in the stock’s technical outlook despite persistent fundamental challenges. This upgrade was driven by stabilising technical indicators such as a mildly bullish monthly MACD and On-Balance Volume, signalling potential accumulation at lower levels.

On 9 February, the stock responded positively, closing at ₹36.09, a gain of 5.03% on the day, outperforming the Sensex’s 1.04% rise. The upgrade highlighted ongoing operational difficulties, including a net loss of ₹32.62 crores in the previous quarter and rising interest expenses, but the technical stabilisation appeared to encourage cautious buying interest.

10 February 2026: Continued Uptrend Amid Modest Volume

On 10 February, the stock extended its gains, closing at ₹37.18, up 3.02%, while the Sensex rose marginally by 0.25%. The price appreciation was accompanied by lower volume compared to the previous day, suggesting selective buying interest. The market appeared to digest the implications of the Mojo Grade upgrade, with investors cautiously optimistic about the technical stabilisation despite ongoing financial headwinds.

11 February 2026: Q3 FY26 Results Highlight Profit Surge Amid Structural Challenges

Dwarikesh Sugar released its Q3 FY26 results on 11 February, revealing a significant profit surge that masked underlying structural headwinds. The company reported a Profit Before Tax excluding Other Income (PBT LESS OI) of ₹23.75 crores, a remarkable 208.2% increase compared to the previous four-quarter average. Profit After Tax (PAT) soared 310.1% to ₹15.44 crores, signalling a strong turnaround in earnings.

However, this profitability improvement came despite an 8.6% decline in net sales to ₹325.12 crores, reflecting ongoing challenges in top-line growth within the sugar sector. The operating profit to interest coverage ratio reached a record 26.32 times, underscoring enhanced operational efficiency and financial health. Despite these positives, the stock price retreated 2.07% to ₹36.41 on the day, as investors weighed the mixed signals.

12 February 2026: Financial Trend Reversal Amid Revenue Decline

The company’s financial trend score improved markedly from -12 to +8 over the past three months, signalling a shift from deteriorating to improving fundamentals. This was reflected in the MarketsMOJO Mojo Grade upgrade to 'Sell' earlier in the week. The debt-equity ratio remained low at 0.23 times, supporting a conservative capital structure.

Despite the positive earnings momentum, the stock price declined slightly by 0.52% to ₹36.22, while the Sensex fell 0.56%. The revenue contraction and sector-specific pressures, including fluctuating sugarcane prices and regulatory challenges, continued to temper investor enthusiasm.

13 February 2026: Strong Finish to the Week on Heavy Volume

The week concluded with a strong rally on 13 February, as the stock surged 4.14% to close at ₹37.72 on heavy volume of 142,066 shares. This marked the highest closing price of the week, reflecting renewed buying interest amid the backdrop of improved profitability and technical stabilisation. The Sensex, however, declined 1.40%, underscoring the stock’s significant outperformance.

This price action suggests that investors are cautiously optimistic about the company’s ability to sustain its earnings recovery despite persistent revenue challenges and sector headwinds.

Key Takeaways

Positive Signals: The week’s 9.78% gain significantly outpaced the Sensex’s 0.54% decline, driven by a strong quarterly earnings turnaround and technical stabilisation. The upgrade to a 'Sell' rating from 'Strong Sell' reflects a moderation in the downtrend, supported by improved operating profit to interest coverage and low debt levels. The surge in PAT and PBT despite revenue contraction indicates enhanced operational efficiency and cost management.

Cautionary Notes: Despite the earnings improvement, net sales declined 8.6%, highlighting ongoing top-line challenges in a cyclical sugar industry. The stock’s long-term underperformance relative to the Sensex and absence of domestic mutual fund holdings underscore persistent fundamental risks. Technical indicators remain mixed, with some bearish signals still present, suggesting that the recovery is tentative.

Conclusion

Dwarikesh Sugar Industries Ltd’s performance this week encapsulates a complex narrative of cautious optimism amid structural challenges. The stock’s 9.78% weekly gain and technical stabilisation offer encouraging signs after a prolonged period of underperformance. The strong quarterly profit surge, despite revenue pressures, signals operational improvements that may provide a foundation for future recovery.

However, the persistent revenue decline, sector headwinds, and mixed technical signals counsel prudence. The MarketsMOJO upgrade to a 'Sell' rating rather than a more positive grade reflects this balanced outlook. Investors should monitor upcoming results and industry developments closely to assess whether the company can sustain its earnings momentum and translate it into consistent growth.

Upgrade at special rates, valid only for the next few days. Claim Your Special Rate →