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Sugar firms' bottom line drops to 10-quarter low

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Ashok Divase Mumbai
Last Updated : Jun 14 2013 | 5:41 PM IST
Bottom lines of sugar companies declined to their ten-quarter low during the quarter ended December 2006, with 20 companies recording a 66.7 per cent drop in their aggregate net profit at Rs 85.73 crore. Their aggregate profit was Rs 75.14 crore in the quarter ended September 2004.
 
Lower global and domestic prices on account of bumper production dented the profits of sugar companies. Besides, the ban on exports to check prices also added to the woes of sugar majors.
 
The impact on the sugar industry was so severe that six companies "" Dhampur Sugar (Kashipur), Mawana Sugar, Ugar Sugar, Rajshree Sugar, Thiru Arooran Sugar and Dharni Sugar "" posted net losses. The bottom lines of Dhampur Sugar, KCP Sugar, KM Sugar Mills, Upper Ganges Sugar, Oudh Sugar Mills, DCM Shriram Ind, EID Parry and Kesar Enterprises took a knock, dropping by over 80 per cent each. 

BITTER PILLS
(Rs in Crore)
Sugar sales*
Operating profit*
Dec '05
Dec '06
% Chg
Dec '05
Dec '06
% chg
Balrampur Chini277.60320.4015.4035.7013.70

-61.80

Bajaj Hindustan267.50277.103.6035.907.30

-79.70

Triveni Engineering225.20198.10-12.0023.105.90

-74.30

EID Parry152.20158.604.208.10-0.60

-

Dhampur Sugar224.90135.00-40.0030.407.00

-77.00

Rajshree Sugars68.20106.1055.5014.20-6.50

-

Sakthi Sugars139.30102.90-26.1019.202.40

-87.40

DCM Shriram Ind106.8095.60-10.5014.104.60

-67.50

Oudh Sugar118.7095.00-20.0021.903.20

-85.60

Shree Renuka157.1092.30-41.2028.8014.10

-51.00

Total for 20 firms2359.202185.70-7.40336.9069.90

-79.20

* Quarter ended Dec 2006
 
The aggregate sales of the 20 sugar firms declined by 8.48 per cent in the December 2006 quarter, a record fall in the sugar industry's turnover. Of the 20 sugar companies, net sales of 13 declined by 44 per cent.
 
The list includes Dharani Sugar (sales down 44 per cent), Dhampur Sugar (-37 per cent), Mawana Sugars (-31 per cent), EID Parry, Upper Ganges Sugars and Shree Renuka Sugars (-28 per cent each).
 
Brokerage house JM Morgan Stanley Securities expects the domestic sugar prices to remain depressed, as the country enters a phase of surplus production. The ability of producers to export the surplus remains uncertain, with low global prices making exports unattractive.

 

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First Published: Feb 07 2007 | 12:00 AM IST

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