Dwarikesh Sugar Industries Limited

Dwarikesh Sugar Industries Ltd is primarily engaged in manufacturing of sugar and allied products. It has strong presence in fields such as sugar manufacturing, power and ethanol/ industrial alcohol production. It is also a bio-energy company with supporting businesses of sugar manufacture and power co-generation. Product Portfolio: Company manufactures sugar, ethanol (and related products) and power. The company is trying to consolidate itself from a sugar company into a bio-energy co. In FY23, Company’s working capital outlay was Rs.180 crore, a 47% decline from the peak. Manufacturing Capabilities: Co. has 3 manufacturing units in UP (2 in Bijnor & 1 in Bareilly). It had embarked upon a 175 KLPD distillery project worth Rs 232/- Cr at Dwarikesh Dham which commenced commercial production in FY23. Company has sugarcane crushing capacity of 21,500 TCD, a Cogeneration power capacity of 96 MW, and Distillery Capacity of 3,37,500 LPD. The distillery is running at 100% capacity utilisation. The company is planning to engage in extensive cane development using digital tools, drones and GPS too. The company also expects its ethanol output to be ~11 crore litres in FY24. The Company may consider acquisition of sugar units contiguous to large command areas in select Maharashtra regions that are not water-stressed. The financials of the company is good, RoNW is 14.9% and at CMP its looks fully priced. Price difference is around 30% and acceptance ratio as per current share holding for retail will be within 1%, so final buyback ration may be within 10% and one may get around 1-3% on investment. So we give NEUTRAL rating to this buyback, those who are currently holding may participate in buyback.

• 1 Mr. Rajesh Pirogiwal
• 2 Mrs. Sunita Pirogiwal
• 3 Miss Tanvi Pirogiwal