Dhampur Sugar Aims for Growth with 350 KLPD Ethanol Capacity and Product Diversification
Dhampur Sugar Mills Limited plans to expand its ethanol capacity to 350 KLPD and launch greenfield projects as part of its diversification strategy. The company is venturing into ethyl acetate and potable spirits to reduce dependence on sugar. Despite revenue growth, profitability remains under pressure due to higher production costs.
Dhampur Sugar Mills Limited , a prominent player in the Indian sugar industry, has unveiled plans for integrated growth and diversification. The company aims to expand its ethanol capacity to 350 KLPD (Kilo Liters Per Day) and establish new greenfield operations, signaling a strategic shift towards a more diversified product portfolio.
Expansion and Diversification Strategy
The sugar manufacturer is broadening its horizons by venturing into value-added products, including ethyl acetate and potable spirits. This move is expected to create additional revenue streams and reduce the company’s dependence on traditional sugar production.
Key Strategic Initiatives
Dhampur Sugar is focusing on several key areas to drive growth and efficiency:
- Energy Efficiency: The company is implementing improvements in energy efficiency across its operations.
- Brand Development: ‘Mishti by Dhampur’ is being developed as a key brand in the company’s portfolio.
- Revenue Stability: By diversifying its product mix between sugar and ethanol, Dhampur Sugar aims to achieve greater revenue stability.
Government Policy Support
The company’s expansion plans are supported by government policy measures, which are expected to contribute to margin expansion.
Financial Performance
Despite these forward-looking initiatives, Dhampur Sugar’s recent financial results reflect the challenges faced by the industry:
| Particulars (in Rs. Crore) | Q2 FY26 | Q2 FY25 | H1 FY26 | H1 FY25 |
|---|---|---|---|---|
| Revenue from Operations | 711.20 | 580.40 | 1451.70 | 1258.30 |
| EBITDA | 10.40 | 5.10 | 41.10 | 36.10 |
| Profit Before Tax (PBT) | -13.50 | -20.20 | -12.40 | -18.20 |
| Profit After Tax (PAT) | -8.80 | -13.50 | -8.10 | -12.20 |
While the company has seen an increase in revenue, it continues to face profitability challenges. However, there are some positive indicators:
- Sugar sales volume increased to 0.80 lakh tons in Q2 FY26 from 0.71 lakh tons in Q2 FY25.
- Sugar realization improved to Rs. 39,956/ton in Q2 FY26 from Rs. 38,163/ton in Q2 FY25.
- Ethanol sales volume grew to 132.47 lakh BL in Q2 FY26 from 93.17 lakh BL in Q2 FY25.
Challenges
The company faced headwinds due to lower pol in cane, which resulted in higher sugar production costs. The cost of production increased to Rs. 37,416/ton in the 2024-25 sugar season, up from Rs. 34,861/ton in the 2023-24 season.
Outlook
Dhampur Sugar’s strategic initiatives, including capacity expansion and product diversification, may position the company for potential growth. However, the success of these efforts will depend on various factors, including market conditions, policy environment, and operational execution.
Historical Stock Returns for Dhampur Sugar Mills
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -0.28% | -2.09% | -5.82% | +3.63% | -29.48% | +6.99% |
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Source : Scanx
