DALMIASUG - Dalmia Bharat

📊 NSE: DALMIASUG 🏢 Sugar 📅 Last Updated: 12/13/2025 21:20

💰 Financial Performance

Revenue Growth by Segment

Total operating income grew 29% YoY to INR 3,762.6 Cr in FY25 from INR 2,915.7 Cr in FY24. Sugar sales volumes increased 42.7% to 605k MT, while distillery sales volumes grew 1.7% to 180k KL. Co-generation sales declined 7.6% to 207 million units.

Geographic Revenue Split

Operations are strategically diversified across two major sugar-producing states: Uttar Pradesh (UP) and Maharashtra, utilizing 6 sugar mills with a combined 43,200 TCD capacity to mitigate regional climatic risks.

Profitability Margins

Net Profit (PAT) margin improved to 10.33% in FY25 from 9.38% in FY24. However, H1FY26 PAT margin dropped significantly to 3.2% due to seasonal factors and regulatory constraints. Return on Equity (ROE) rose to 13% from 10% in the previous year.

EBITDA Margin

Operating EBITDA margin compressed by 169 basis points to 12.52% in FY25 from 14.21% in FY24. This was primarily due to lower grain ethanol profitability, higher cane costs, and limited sugar diversion during the off-season in ESY 24.

Capital Expenditure

The company is executing a planned expansion of its distillery capacity from 850 KLPD to 950 KLPD scheduled for completion in FY2026 to enhance high-margin downstream revenue.

Credit Rating & Borrowing

ICRA reaffirmed [ICRA]A1+ for Commercial Paper, enhancing the rated amount to INR 1,000 Cr. Interest coverage stood at 7.7x in FY25 (down from 8.5x in FY24), while Net Debt to OPBIDTA improved to 1.5x from 2.2x.

⚙️ Operational Drivers

Raw Materials

Sugarcane is the primary raw material, supplemented by grains for ethanol production. Cane costs increased in FY25, contributing to a 169 bps compression in EBITDA margins.

Import Sources

Sourced domestically from a 60,000-hectare command area across Uttar Pradesh and Maharashtra through deep farmer engagement programs.

Key Suppliers

Sourced directly from local farmers in the command areas of its six sugar mills in UP and Maharashtra.

Capacity Expansion

Current sugar crushing capacity is 43,200 TCD. Distillery capacity is 850 KLPD, expanding to 950 KLPD by FY2026. Co-generation capacity is 138 MW.

Raw Material Costs

Cane costs rose in FY25 due to government-mandated price hikes (FRP/SAP). The company manages costs through high varietal efficiency and early harvesting strategies.

Manufacturing Efficiency

Sugar production was 556k MT in FY25 with a healthy gross recovery rate. Wind farm plant load factor (PLF) was 14% in FY25, down from 18% in FY24.

Logistics & Distribution

Distribution is managed through integrated facilities; trade receivable turnover ratio improved 38% to 29.74 in FY25 due to higher sales volumes.

📈 Strategic Growth

Expected Growth Rate

29%

Growth Strategy

Growth is driven by increasing distillery capacity to 950 KLPD, deepening ethanol diversion to protect margins from sugar cyclicality, and the merger of Baghauli Sugar and Distillery Limited to streamline operations. The company also maintains financial flexibility through a 1.71% stake in Dalmia Bharat Limited valued at INR 582 Cr.

Products & Services

Refined sugar, Ethanol (B-heavy, Juice-based, and Grain-based), Co-generated Power, Wind Power, and Travel Services (Govan Travels).

Brand Portfolio

Dalmia Bharat Sugar

New Products/Services

Increased focus on grain-based ethanol to ensure year-round distillery operations, although currently facing lower profitability compared to cane-based feedstock.

Market Expansion

Expansion is focused on downstream integration in UP and Maharashtra to increase the share of ethanol in the total revenue mix.

Market Share & Ranking

One of the leading integrated sugar manufacturers in India and the only major private-sector player from UP with legacy strengths.

Strategic Alliances

Part of the Dalmia Bharat Group, providing access to diversified lenders and group-level financial flexibility.

🌍 External Factors

Industry Trends

The industry is shifting toward a 'Sugar-as-a-Fuel' model with the government's 20% ethanol blending target by 2025-26, which supports long-term demand for distillery operations.

Competitive Landscape

Competes with other large integrated players like Balrampur Chini and Triveni Engineering, but benefits from being part of the Dalmia Bharat Group.

Competitive Moat

Moat is built on geographical diversification (UP & Maharashtra), deep farmer relationships across 60,000 hectares, and high integration (Sugar-Distillery-Power) which cushions against cyclicality.

Macro Economic Sensitivity

Highly sensitive to monsoon patterns and agro-climatic conditions affecting cane yield. Profitability is also tied to global sugar price fluctuations.

Consumer Behavior

Increasing demand for ethanol as a green fuel and stable domestic sugar consumption drive long-term volumes.

Geopolitical Risks

International trade bans on sugar exports by the Indian government to control domestic inflation directly limit global market participation.

⚖️ Regulatory & Governance

Industry Regulations

Operations are highly regulated by the Central and State governments via Fair and Remunerative Price (FRP), State Advised Price (SAP), domestic sugar sale quotas, and ethanol pricing policies.

Environmental Compliance

The company operates bagasse-based co-generation and wind farms (16.53 MW) to promote renewable energy use.

Taxation Policy Impact

Effective tax rate resulted in a PAT of INR 386.8 Cr from a PBT of INR 350 Cr in FY25, aided by deferred tax adjustments or credits.

Legal Contingencies

The NCLT approved the merger of Baghauli Sugar and Distillery Limited on April 25, 2025. The demerger of non-core units received NSE/BSE observation letters on July 30, 2024.

⚠️ Risk Analysis

Key Uncertainties

Regulatory shifts in ethanol blending mandates or pricing could impact distillery margins by 10-15%. Agro-climatic risks remain a primary threat to feedstock security.