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India's Dalmia Bharat Sugar and Industries reported a near 25% fall in fourth-quarter profit on Tuesday, hurt by a drop in sales in its mainstay refined sugar segment.
WHY IT'S IMPORTANT
India, the world's second-largest sugar producer, has not allowed exports in the current season to keep a lid on local prices, due to the elections and uneven rainfall in the primary sugarcane-growing states of Maharashtra and Karnataka.
Peers Dhampur Sugar Mills and Dwarikesh Sugar Industries too reported a fall in their respective quarterly profits.
With the majority of India's sugar mills having completed crushing for the 2023/24 season, output as of May 1 stands at 31.59 million metric tons, according to the National Federation of Cooperative Sugar Factories, down 1.8% from the previous full year.
CONTEXT
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India's sugar consumption this year is poised to hit a record high as demand during the peak summer season gets a boost from heat waves and the mobilisation of millions for elections in the scorching temperatures.
Dalmia Bharat Sugar's major business segments include sugar and distillery. It supplies sugar to companies like Coca-Cola, PepsiCo, Britannia, Walmart India, Dabur, United Breweries, and Carlsberg.
The company also sells ethanol to Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum, according to its website.
BY THE NUMBERS
Dalmia Bharat Sugar reported a consolidated net profit of Rs 93.37 crore ($11.2 million) for the quarter ended March 31, compared with 1.24 billion rupees last year.
Revenue from operations fell 34.8% to Rs 750 crore.
Total sugar sales fell 42.2% during the quarter.
The company recommended a dividend of 1.25 rupees per share for fiscal 2024.
