 "Dwarikesh Sugar extends rally; zooms over 80% in March")
Dwarikesh Sugar Industries has surged 6% to Rs 184, extending its past two weeks rally on the BSE, after the rating agency ICRA upgraded the long-term rating of the Line of Credit (LOC). The outlook on the long term rating has been changed to positive from stable.
The stock currently trading at its 52-week high and zoomed 81% from Rs 102 on February 29, as compared to nearly 8% rise in the S&P BSE Sensex.
“The rating action factors in the improved outlook for the company’s core sugar business arising out of the significant increase in domestic sugar prices coupled with an improvement in the recovery of sugar from sugarcane leading to lower cost of production during SY16,” ICRA said in a statement.
Expectations of lower domestic sugar output in SY16 owing to drought conditions in major producing states together with mandatory exports of 4 million tone notified by the Government of India have led to an uptrend in domestic sugar prices. Further, with the Uttar Pradesh State Administered Price (SAP) for cane being retained at previous year’s levels of Rs 280/ quintal for SY16 along with a significant subsidy, the company’s profitability and cash accruals are expected to improve from the earlier estimates, it added.
The company had reported a net profit of Rs 2.84 crore for the quarter ended December 2015 against a loss of Rs 23.43 crore in the same quarter last year.
According to the unaudited financials, Dwarikesh Sugars reported an operating income of Rs. 568 crore and net loss of Rs 13.86 crore during 9MFY16 as against an operating income of Rs 517 crore and net loss of Rs 33.40 crore in 9M FY15.
The stock currently trading at its 52-week high and zoomed 81% from Rs 102 on February 29, as compared to nearly 8% rise in the S&P BSE Sensex.
“The rating action factors in the improved outlook for the company’s core sugar business arising out of the significant increase in domestic sugar prices coupled with an improvement in the recovery of sugar from sugarcane leading to lower cost of production during SY16,” ICRA said in a statement.
Expectations of lower domestic sugar output in SY16 owing to drought conditions in major producing states together with mandatory exports of 4 million tone notified by the Government of India have led to an uptrend in domestic sugar prices. Further, with the Uttar Pradesh State Administered Price (SAP) for cane being retained at previous year’s levels of Rs 280/ quintal for SY16 along with a significant subsidy, the company’s profitability and cash accruals are expected to improve from the earlier estimates, it added.
The company had reported a net profit of Rs 2.84 crore for the quarter ended December 2015 against a loss of Rs 23.43 crore in the same quarter last year.
According to the unaudited financials, Dwarikesh Sugars reported an operating income of Rs. 568 crore and net loss of Rs 13.86 crore during 9MFY16 as against an operating income of Rs 517 crore and net loss of Rs 33.40 crore in 9M FY15.
