DAVANGERE - Davangere Sugar
📢 Recent Corporate Announcements
Davangere Sugar Company Limited has appointed B N Rajendrababu as its Internal Auditor effective February 10, 2026. This appointment fills a casual vacancy created by the unfortunate demise of the previous auditor, Mr. B. Gangadhar. The new auditor's tenure will span from the third quarter of FY 2025-26 until the end of FY 2027-28. The appointee brings over 30 years of professional experience, including audits for nationalized banks and various private sectors.
- Appointment of B N Rajendrababu (FRN: 204552) as Internal Auditor effective Feb 10, 2026
- Tenure covers Q3 FY26 to FY28 to fill vacancy due to the death of Mr. B. Gangadhar
- New auditor possesses over 30 years of professional experience in statutory and tax audits
- Board meeting for approval was conducted between 04:00 P.M. and 04:35 P.M. on Feb 10, 2026
Davangere Sugar Company reported a 13% YoY increase in revenue to ₹82.69 crore for Q3 FY26, but net profit fell sharply by 61% to ₹2.62 crore compared to ₹6.77 crore in the same period last year. Profitability was severely impacted by the sugar segment, which recorded a loss of ₹2.47 crore at the PBIT level, while the distillery segment remained the sole profit driver with ₹10.94 crore. Total comprehensive income was further reduced to ₹1.34 crore due to a ₹1.28 crore gratuity provision. High finance costs of ₹6.33 crore continue to weigh on the bottom line.
- Revenue from operations increased 13% YoY to ₹8,268.61 Lakhs from ₹7,317.75 Lakhs.
- Net profit for the quarter declined significantly to ₹262.27 Lakhs from ₹676.89 Lakhs YoY.
- Distillery segment PBIT stood at ₹1,093.97 Lakhs, while the Sugar segment posted a loss of ₹246.62 Lakhs.
- Finance costs for the quarter remained elevated at ₹632.59 Lakhs.
- Appointed B N Rajendrababu as Internal Auditor to fill a casual vacancy until FY 2027-28.
Davangere Sugar Company Limited has responded to inquiries from both the BSE and NSE regarding recent significant movements in its share price. The company officially stated on January 17, 2026, that there is no undisclosed price-sensitive information or pending announcements that could affect its stock performance. Management clarified that the recent price volatility is entirely market-driven and reflects general market conditions. The company reaffirmed its commitment to complying with SEBI Listing Obligations and Disclosure Requirements for all future material events.
- Responded to BSE and NSE clarification requests dated January 16, 2026, regarding price volatility.
- Confirmed no undisclosed events or information exist that impact company operations or performance.
- Attributed recent stock price movements to general market conditions rather than internal company developments.
- Reiterated strict adherence to Regulation 30 of SEBI (LODR) Regulations, 2015 for timely disclosures.
Davangere Sugar Company Limited has filed its quarterly compliance certificate under Regulation 74(5) of the SEBI (Depositories and Participants) Regulations, 2018. The filing confirms that for the quarter ended December 31, 2025, all share certificates received for dematerialization were processed by the Registrar and Share Transfer Agent (RTA). The RTA, Integrated Registry Management Services Private Limited, verified that physical certificates were mutilated and cancelled, and the depository names were updated in the register of members within the required 15-day timeframe. This is a standard administrative procedure to ensure the integrity of electronic shareholding records.
- Compliance certificate submitted for the quarter ended December 31, 2025.
- RTA confirmed processing of dematerialization requests within the mandatory 15-day period.
- Physical share certificates were mutilated and cancelled after due verification.
- The filing ensures that the company's electronic share records are up-to-date and compliant with SEBI norms.
Davangere Sugar Company Limited has officially notified the stock exchanges regarding the closure of its trading window for all designated persons and their immediate relatives. The closure is effective from January 1, 2026, in preparation for the announcement of financial results for the quarter ending December 31, 2025. The trading window will remain closed until 48 hours after the results are declared. This is a mandatory regulatory requirement under SEBI (Prohibition of Insider Trading) Regulations, 2015.
- Trading window closed effective from January 1, 2026
- Closure pertains to the financial results for the quarter ended December 31, 2025
- Window to reopen 48 hours after the official declaration of results
- Compliance with SEBI (Prohibition of Insider Trading) Regulations, 2015
Davangere Sugar Company Limited announced the cessation of M/s B. Gangadhara & Co. as their Internal Auditor, effective November 30, 2025, due to the demise of its Proprietor, Mr. B. Gangadhara. The company acknowledged Mr. Gangadhara's valuable guidance and contribution during his tenure. This change is in compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. There is no appointment of a new director mentioned in the announcement.
- M/s B. Gangadhara & Co. ceased to be Internal Auditor w.e.f. November 30, 2025
- Cessation due to the demise of Proprietor Mr. B. Gangadhara
- Disclosure under Regulation 30 of SEBI Regulations, 2015
Financial Performance
Revenue Growth by Segment
Total income for FY 2024-25 was INR 216.76 Cr, a slight decline of 2.8% from INR 222.97 Cr in FY 2023-24. The Distillery segment grew 44% to INR 150.39 Cr, while the Sugar segment moderated to INR 50.87 Cr due to low rainfall. Co-generation contributed INR 6.23 Cr and Aviation INR 7.50 Cr.
Geographic Revenue Split
100% of revenue is derived from India, primarily from operations in Kukkuwada, Davangere, Karnataka.
Profitability Margins
Net Profit After Tax for FY 2024-25 was INR 10.83 Cr (5% margin). For H1 FY 2025-26, Net Profit stood at INR 3.93 Cr. Distillery segment profit was INR 65.14 Cr in FY 2024-25, while the Sugar segment recorded a loss of INR 22.90 Cr.
EBITDA Margin
Operating profit before working capital adjustments for FY 2024-25 was INR 25.56 Cr (11.8% margin). Segment results show distillery as the core profit driver with INR 65.14 Cr profit against a total segment result of INR 40.01 Cr.
Capital Expenditure
The company launched a Rights Issue in August 2025 to raise up to INR 149.22 Cr (INR 14,921.80 lakhs) at INR 3.05 per share to fund debt repayment and general corporate purposes.
Credit Rating & Borrowing
Long-term bank facilities of INR 165.21 Cr are rated CARE BB+; Stable. Short-term facilities of INR 33.84 Cr are rated CARE A4+. Interest costs for FY 2024-25 were INR 27.15 Cr on total debt, implying an average borrowing cost of approximately 13-14%.
Operational Drivers
Raw Materials
Sugarcane (primary), B-Heavy Molasses, and Maize (for ethanol production). Sugarcane availability and yield per acre are the most critical cost drivers.
Import Sources
100% sourced domestically from the state of Karnataka, specifically the Davangere region.
Key Suppliers
Sourced from local farmers with whom the company has established relationships over five decades.
Capacity Expansion
Ethanol plant commercial operations commenced in Q1 FY 2022-23. Current focus is on maximizing utilization of the integrated sugar, distillery, and power facilities.
Raw Material Costs
Raw material costs are highly sensitive to climatic conditions; scanty rainfall in FY 2024-25 reduced cane availability and yield, impacting sugar segment revenue which fell to INR 50.87 Cr.
Manufacturing Efficiency
Working capital utilization remained high at 93-95% during 2024, indicating intensive operational requirements.
Strategic Growth
Growth Strategy
Growth is driven by the strategic shift toward ethanol production, which grew 44% YoY. The company is utilizing a Rights Issue of INR 149.22 Cr to deleverage the balance sheet and improve liquidity for operational expansion in the distillery segment.
Products & Services
Sugar, Ethanol, Cogenerated Power, and Aviation services (charter/maintenance).
Brand Portfolio
Davangere Sugar.
New Products/Services
Ethanol production from Maize and B-Heavy molasses to ensure year-round distillery operations.
Market Expansion
Targeting the national 20% ethanol blending goal by 2025 to ensure regular offtake and assured pricing from Oil Marketing Companies (OMCs).
External Factors
Industry Trends
The industry is transitioning toward green energy; DSCL is positioned as a diversified energy and agro-based enterprise with 69% of revenue now coming from the distillery segment.
Competitive Landscape
Operates in a cyclical and fragmented industry, competing with other integrated sugar mills in Karnataka.
Competitive Moat
Sustainable moat derived from a 50-year track record and established relationships with local farmers, ensuring a steady supply of sugarcane in normal climatic years.
Macro Economic Sensitivity
Highly sensitive to the Government of India's ethanol blending program (20% target) and Minimum Selling Price (MSP) for sugar.
Consumer Behavior
Increasing national demand for green energy and ethanol-blended fuels is shifting the company's focus away from cyclical sugar sales.
Geopolitical Risks
Global crude oil price movements and international trade policies indirectly affect the domestic ethanol blending program and sugar export viability.
Regulatory & Governance
Industry Regulations
Operations are governed by the Fair and Remunerative Price (FRP) for sugarcane and the Minimum Selling Price (MSP) for sugar.
Environmental Compliance
Subject to increasing regulations regarding effluent treatment, waste management, and air quality; non-compliance poses penalty risks.
Taxation Policy Impact
Effective tax rate was approximately 15% in FY 2024-25, with a tax provision of INR 1.92 Cr on PBT of INR 12.86 Cr.
Risk Analysis
Key Uncertainties
Climatic pressure (rainfall) is the primary uncertainty, which can reduce sugar production and impact segment profitability (as seen in the INR 22.90 Cr sugar segment loss).
Geographic Concentration Risk
100% of manufacturing assets are concentrated in Davangere, Karnataka, making the company vulnerable to regional weather patterns.
Third Party Dependencies
High dependency on local farmers for sugarcane supply; any disruption in farmer relations could halt crushing operations.
Technology Obsolescence Risk
The company uses SAP ERP systems for internal controls and operational monitoring to mitigate technological lag.
Credit & Counterparty Risk
Low risk for ethanol sales as primary buyers are state-owned OMCs, ensuring assured pricing and timely payments.