This sugar stock records the highest profit in the last 8 quarters; board-approved commissioning of a new CO2 plant
Company witnessed a notable surge in its stock price today, climbing by 9.15 per cent to reach its day high, supported by its strong Q3FY24 results.
Davangere Sugar Company Ltd witnessed a notable surge in its stock price today, climbing by 9.15 per cent to reach its day high, supported by its Q3FY24 results. The company reported a staggering 143 per cent year-over-year surge in net profit. Additionally, investor sentiment was driven by the announcement of a new CO2 plant, signalling potential revenue stream option in coming time and waste management.
DSIJ offers a service 'PAS' which provides stock recommendations that have the potential to generate excellent returns on your portfolio. If this interests you, then do download the service details pdf here
The sales figures shown an impressive recovery in September 2023, with sales soaring to 78.31 Crore, reflecting a remarkable quarter-over-quarter growth of 190.90 per cent.
In terms of net profit, there was a notable increase from December 2022 to September 2023, with profits climbing from 2.3 Crore to 5.61 Crore, showcasing a robust year-over-year growth of 143.91 per cent. The quarter-over-quarter growth in net profit was even more remarkable, surging by a staggering 478.35 per cent.
|
Particulars
|
Dec-21
|
Mar-22
|
Jun-22
|
Sep-22
|
Dec-22
|
Mar-23
|
Jun-23
|
Sep-23
|
Dec-23
|
|
Sales
|
48.99
|
47.4
|
46.19
|
50.93
|
94.71
|
88.13
|
47.73
|
26.92
|
78.31
|
|
YoY growth
|
1.22%
|
-18.21%
|
138.95%
|
251.00%
|
93.33%
|
85.93%
|
3.33%
|
-47.14%
|
-17.32%
|
|
Net Profit
|
6.35
|
2.95
|
0.82
|
1.52
|
2.3
|
8.57
|
1.1
|
0.97
|
5.61
|
|
YoY growth
|
8.7%
|
247.1%
|
-124.7%
|
-300.0%
|
-63.8%
|
190.5%
|
34.1%
|
-36.2%
|
143.9%
|
|
EPS in Rs
|
0.67
|
0.31
|
0.09
|
0.16
|
0.24
|
0.91
|
0.12
|
0.1
|
0.6
|
All values are in Crore
Davangere Sugar Company Ltd is in the process of commissioning a new CO2 plant. The new plant will have an Investment of Rs 3 crores and will be financed through borrowings from a bank. The rationale for the new plant is to convert waste molasses fermentation into liquefied carbon dioxide and dry ice. This process has several benefits, including environmental and economic benefits.
Environmentally, converting waste into liquefied CO2 and dry ice helps to mitigate climate change by reducing the amount of CO2 emitted into the atmosphere. CO2 is a greenhouse gas that contributes to climate change, and by capturing and storing it, Davangere Sugar Company Ltd is helping to reduce its environmental impact.
Economically, converting waste into liquefied CO2 and dry ice can create new revenue streams for Davangere Sugar Company Ltd. Liquefied CO2 and dry ice have a variety of industrial applications, and by producing these products, Davangere Sugar Company Ltd can tap into new markets.
Simply looking, the new plant is expected to have a breakeven on the 3-crore investment after a few years. Once it reaches breakeven, it is expected to add more to the net profit, which may be around 60 per cent more on existing capacity. This is because the company will be able to sell the liquefied carbon dioxide and dry ice that it produces, which will generate additional revenue.
About Company
Incorporated in 1970, Davangere Sugar is in the business of Sugar Manufacturing (By-product Molasses) from Sugarcane and Co-generation of Electricity Power
Disclaimer: The article is for informational purposes only and not investment advice.