Dhampur Sugar Mills Limited — Investor Meet, 12-02-2025: Analysts/Institutional Investor Meet/Con. Call Updates

1. **Financial Performance:** Dhampur Sugar Mills reported revenue from operations of INR 587 crores for the quarter, a significant increase from INR 482 crores in the same quarter last year. Despite this growth, profit after tax decreased to INR 15 crores from INR 31.6 crores, influenced by lower ethanol sales and overall margin pressures. EBITDA for the quarter stood at INR 48.1 crores, down from INR 69.5 crores. The sugar production significantly declined to 0.97 lakh tons from 1.29 lakh tons due to late harvest and cane quality issues.

2. **Future Outlook and Growth Drivers:** Management projects India's sugar production for the year at 26.5 to 27 million tons, with expectations of improved production in subsequent years due to better cane varieties and planting strategies. The focus will remain on cane development to address the ongoing challenges posed by red rot.

3. **Order Book and Operational Updates:** The company has been allocated an export quota of 10,256 tons of sugar, which may be exchanged with neighboring mills for domestic quotas. The management also noted that operations of both plants commenced on November 7, 2024, and have crushed 11.33 lakh tons of cane in the current season.

4. **Analyst Q&A Insights (Detailed):**

- **Revenue and Profitability:** The management acknowledged lower profitability due to decreased cane availability and ethanol production, but highlighted their hedging strategies against forex risks.

- **Market Position and Competitive Landscape:** Analysts inquired about sugar prices and competitive pressures, with management indicating a slight uptick in sugar prices recently to around INR 41 ex-mill.

- **Operational Challenges or Risks:** The team addressed the impact of lower cane availability on margins and indicated ongoing challenges related to crop health.

- **Capex and Capital Allocation:** There are no immediate expansion plans, but management is open to exploring dividends or buybacks after the fiscal year-end.

- **Strategic Priorities and Long-Term Vision:** A strategic pivot towards diversifying sugarcane usage for ethanol production will continue, with mentions of the opportunities in ethanol given rising government targets for ethanol blending.

5. **Market or Regulatory Updates:** The company’s plans for exports have been adapted to sell quota to nearby mills instead of direct exports, amidst fluctuating global prices.

6. **Strategic Focus Areas:** Key themes include innovation in cane varieties to combat red rot, maintaining diverse product lines, and balancing operational costs amid fluctuating sugar and ethanol prices.

7. **Investor Insight:** Given the recovery in sugar prices, revenue growth despite production challenges, and proactive management strategies amidst risks, a “buy” position appears aligned for retail investors, presuming continued operational recovery and stability in sugar pricing.