Dwarikesh Sugar posted a weak set of earnings for the third quarter of the current financial year. The revenue for the reported period was down 36 percent owing to lower sugar sales. The margin has also contracted to 7 percent from 9 percent earlier, hit by both the sugar and the distillery segments.
Vijay Banka, Managing Director of Dwarikesh Sugar Industries, recently spoke to CNBC-TV18 and said that the shift towards ethanol is a major change in the company's business model.
“Together in this fiscal, we will be selling 7 crore litres of ethanol. Ethanol is going to be the mainstay of the business, this will help in moderation of our sugar production and inventory and this is going to be a paradigm shift in our business model,” he said.
In the fourth quarter of the current fiscal year, the company expects to sell 1.6 crore litres of ethanol. Banka also stated that they are optimistic about their ability to sell more than 10 crore litres of ethanol in the next fiscal year.
“Margins from the ethanol business are going to grow going forward as the season progresses,” he added.
The fourth quarter is a seasonally better period for all sugar companies, including Dwarikesh Sugar Industries. In the third quarter of the current fiscal year, the company had sales of 1.6 crore litres of ethanol.
“Fourth quarter is typically a good quarter for all sugar companies because we have production and better recoveries in this quarter,” he said.
The stock was down 7.22 percent in the last week and 12.90 percent in the past month.
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