How has been the historical performance of Dwarikesh Sugar?

Dec 01 2025 11:09 PM IST

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Dwarikesh Sugar's historical performance has shown significant fluctuations, with a notable decline in profitability in the fiscal year ending September 2010, resulting in a loss after tax of -9.05 crore and a drop in EPS to -0.56, despite increased net sales. The company faced rising costs, leading to a challenging financial year overall.

Revenue and Profitability Trends

Examining the consolidated annual results from the fiscal years ending September 2009 and 2010, Dwarikesh Sugar's net sales increased from ₹461.88 crores to ₹555.07 crores, reflecting a notable rise in top-line revenue. However, this growth was accompanied by a significant increase in raw material costs, which surged from ₹201.25 crores to ₹487.50 crores within the same period. The company also experienced a negative change in stock levels in 2010, contrasting with a positive stock increase in 2009, which impacted the cost structure.

Operating profit before depreciation, interest, and tax (PBDIT) declined sharply from ₹125.98 crores in 2009 to ₹65.00 crores in 2010, indicating pressure on operational efficiency. This was further reflected in the operating profit margin, which dropped from 25.68% to 10.93%. Gross profit margin also contracted significantly, falling from 13.28% to 3.24%. The company’s interest expenses decreased from ₹61.64 crores to ₹46.31 crores, yet the profit before tax swung from a positive ₹31.38 crores in 2009 to a loss of ₹13.36 crores in 2010. Consequently, the net profit after tax turned negative, with a loss of ₹9.05 crores in 2010 compared to a profit of ₹25.08 crores the previous year. Earnings per share mirrored this downturn, moving from a positive ₹1.54 to a negative ₹0.56.

Balance Sheet Evolution

Over a six-year span from March 2020 to March 2025, Dwarikesh Sugar's standalone balance sheet reflects steady growth in shareholder funds, rising from ₹483.71 crores to ₹806.22 crores. This increase is supported by a consistent build-up in reserves, which grew from ₹464.88 crores to ₹787.69 crores, signalling retained earnings accumulation and capital strengthening.

The company’s total liabilities have shown a gradual decline from ₹1,550.46 crores in 2020 to ₹1,462.87 crores in 2025, with total debt reducing from ₹669.41 crores to ₹503.21 crores over the same period. Notably, long-term borrowings decreased from ₹193.25 crores to ₹92.63 crores, while short-term borrowings fluctuated but remained substantial at ₹410.57 crores in 2025. The net block of fixed assets increased from ₹427.20 crores to ₹543.44 crores, indicating ongoing capital investment and asset base expansion.

Current assets have remained robust, with inventories consistently high around ₹750 crores and cash and bank balances improving significantly to ₹82.97 crores by March 2025. Net current assets also strengthened, rising from ₹191.94 crores in 2020 to ₹429.30 crores in 2025, reflecting improved liquidity and working capital management. The book value per share has appreciated steadily from ₹25.69 to ₹43.51, underscoring enhanced shareholder value over the years.

Cash Flow and Operational Efficiency

Cash flow data from March 2020 to March 2025 shows fluctuating but generally positive cash generation from operating activities. After a low base of ₹11 crores in 2020, operating cash flow surged to ₹60 crores in 2025, despite some volatility in working capital changes. Investing activities have consistently been cash outflows, reflecting ongoing capital expenditure, while financing activities have varied between inflows and outflows, indicating active debt management and capital restructuring.

Net cash inflow was positive at ₹81 crores in 2025, a marked improvement compared to near breakeven or slight outflows in previous years. This suggests a strengthening cash position and better financial flexibility for the company.

Summary of Historical Performance

Dwarikesh Sugar’s historical performance presents a narrative of growth tempered by operational challenges. The company expanded its revenue base significantly in the late 2000s but faced margin compression and profitability setbacks around 2010. Over the subsequent years, the balance sheet has strengthened with rising reserves and shareholder funds, alongside a reduction in overall debt levels. The asset base has expanded, and liquidity metrics have improved, supported by positive operating cash flows in recent years.

While the company has demonstrated resilience and capital growth, the fluctuations in profitability and debt management highlight areas for investor scrutiny. The steady increase in book value per share and improved cash position are positive indicators, yet the historical volatility in earnings underscores the cyclical nature of the sugar industry and the importance of monitoring operational efficiencies and market conditions.

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