After stock split from Rs 10 to Re 1 on May 31, very same day company announced an additional capacity expansion of Grain Distillery worth Rs 54 crore; details inside!

The stock gave multibagger returns of 675 per cent in 3 years with a PE of 81x, an ROE of 4 per cent and an ROCE of 7 per cent.

Davangere Sugar Company Limited (DSCL) has been making groundbreaking developments in its operations and sustainable agricultural practices. Notably, the firm recently included a grain-based distillery unit of 45 KLPD costing Rs 54 crore. As a result, DSCL can now operate independently for 330 days each year, guaranteeing a continuous production cycle. By buying maize, rice and other feedstocks directly from local farmers, DSCL boosts the local economy; and promotes sustainable agricultural practices by creating stable markets for farmers’ products.  

Besides distillery expansion, DSCL intends to enlarge the area under sugarcane cultivation by another 15,000 acres. Consequently, this move covers both existing and new regions leading to a steady supply of raw materials besides benefiting the local producers. To enhance farming output as well as allow them to buy superior seeds plus equipment for planting and harvesting activities, DSCL offers financial help in the form of loans thus enabling planters to borrow and modernize their farms. In addition to farming-related issues, the firm is also involved in R&D aimed at improving cane varieties through which high yields are realized with minimized environmental degradation hence ensuring a prosperous agro-ecology system.

Moreover, DSCL is devoted to environmental sustainability. This company has set up a 35-ton Carbon Dioxide processing unit as part of its commitment. This plant captures and repurposes CO2 emissions turning them into products such as food-grade CO2 and dry ice which can be used in industries. By doing so, DSCL does not only decrease environmental emissions but also expands their profit-making avenues. Through this whole approach of the organization to growth through business, environment and re-investment into the community, DSCL has become an example of how agricultural landscapes can be changed for the better by setting eco-standards that other companies should adopt.

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Davangere Sugar Company Limited (DSCL), established in 1970, is a Karnataka-based company that manufactures sugar and molasses from sugarcane. They also generate electricity through co-generation and operate a distillery unit. Their production facility in Karnataka has a sugar-crushing capacity of 4750 tons of cane per day (TCD), and their co-generation unit has a capacity of 24.45 megawatts (MW). Additionally, they have a distillery unit with a capacity of 63 kilolitres per day (KLPD).

The company's board ex-traded stock split of equity shares on May 31, 2024. This means each existing share with a face value of Rs 10 will be divided into 10 new shares with a face value of Re 1 each. To accommodate this split, the company's authorized share capital is being increased.

On Friday, shares of DSCL gained 9.3 per cent to an intraday high of Rs 10.88 per share from its previous closing of Rs 9.91 per share. The stock’s 52-week high is Rs 12 while its 52-week low is Rs 6. The company has a market cap of over Rs 1,000 crore and has delivered good profit growth of 31.5 per cent CAGR over the last 5 years.

The promoters of the company sold 34,37,205 shares and decreased their stake to 70.70 per cent in March 2024 compared to 74.36 per cent in December 2023.The stock gave multibagger returns of 675 per cent in 3 years with a PE of 81x, an ROE of 4 per cent and an ROCE of 7 per cent.

Disclaimer: The article is for informational purposes only and not investment advice.