At a Glance
Dhampur Sugar is a 90-year-old fully integrated sugar and ethanol player. It’s got everything — cane crushing, power co-gen, distilleries, and even machinery exports. But despite all that, the stock trades at 0.88x book, ROE is just 4.6%, and the past 5 years have been a sugar-coated disappointment. Buybacks may be trying to prop up sentiment, but margins are melting faster than a barfi in June.
1. 🧲 Introduction with Hook
If you’ve held Dhampur for the past 5 years, you’ve aged like sugarcane without irrigation.
- Revenue growth? ❌
- Profit growth? ❌
- Market share? Stable.
- Government ethanol policy? ✅
- Shareholder returns? Kaccha Khaata.
But just when it looked like the stock was headed for “gur” status, the company announced a ₹20 Cr buyback at ₹185, and bulls came buzzing again.
2. ⚙️ WTF Do They Even Do? (Business Model)
Core Business Streams:
- Sugar: Crushing capacity of ~45,500 TCD
- Ethanol: From molasses, distillery capacity ramped to capitalize on E20 blending policy
- Cogeneration: Power from bagasse, partially sold to grid
- Byproducts: Chemicals like ethyl acetate, alcohol
- Others:
- Sugar trading
- Machinery exports
- E-commerce (yes, apparently)
Full-spectrum sugar mill operator with a decent ethanol kicker.
3. 💸 Financials – Profit, Margins, ROE, Growth
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue (₹ Cr) | 2,460 | 2,169 | 1,957 |
| Net Profit (₹ Cr) | 158 | 135 | 52 |
| EBITDA Margin | 12% | 12% | 9% |
| ROCE | 15% | 11% | 6% |
| ROE | 23.7% | 20.5% | 7.98% |
📉 Revenue and profit both falling for 3 straight years. FY25’s 61% profit drop is a red flag dipped in molasses.
4. 💰 Valuation – Is It Cheap, Meh, or Crack?
| Metric | Value |
|---|---|
| CMP | ₹155 |
| Market Cap | ₹1,013 Cr |
| EPS (TTM) | ₹7.98 |
| P/E | 19.4x |
| Book Value | ₹176 |
| P/B | 0.88x |
📉 CMP is below book value. The market’s basically saying, “Your assets are worth more than your operations.”
🎯 Fair Value Range:
If we normalize EPS at ₹10–₹12, fair P/E of 10–12x → FV = ₹100 – ₹144
👉 CMP ₹155 is slightly above realistic upside, unless margins improve fast.
5. 🍿 What’s Cooking – News, Triggers, Drama
- ✅ ₹20 Cr Buyback @ ₹185 for 10.81 lakh shares (May 2025)
- 🧴 Expecting better ethanol margins in FY26 due to higher blending targets
- 🌾 Hit by cane shortages in FY25, volume pressure across segments
- 🧑💼 CEO change in Sep 2023 — Subhash Pandey took over
- 📉 FIIs dumped from 7.6% to 1.98% in FY25
- 📈 Sugar prices volatile globally, hurting export plans
6. 🏦 Balance Sheet – How Much Debt, How Many Dreams?
| Item | FY23 | FY24 | FY25 |
|---|---|---|---|
| Borrowings (₹ Cr) | 744 | 981 | 936 |
| Reserves (₹ Cr) | 976 | 1,035 | 1,087 |
| Total Liabilities | 2,122 | 2,357 | 2,387 |
🔺 Debt went up slightly despite falling revenue. Not great when cash flows are drying up.
7. 💵 Cash Flow – Sab Number Game Hai
| Year | CFO (₹ Cr) | CFI (₹ Cr) | CFF (₹ Cr) | Net Cash Flow |
|---|---|---|---|---|
| FY23 | 383 | -146 | -243 | -6 |
| FY24 | -53 | -92 | 109 | -36 |
| FY25 | 201 | +22 | -111 | +112 |
📈 Finally, decent positive cash flow in FY25 despite lower PAT. Likely from inventory unwinding and WC release.
8. 📊 Ratios – Sexy or Stressy?
| Ratio | Value |
|---|---|
| ROCE | 6.01% |
| ROE | 4.64% |
| Debtor Days | 28 |
| Inventory Days | 215 |
| Payables Days | 32 |
| Cash Conversion | 211 days |
🛑 CCC of 211 days is sticky and sugar-heavy. WC days trending up = cash stuck in warehouses.
9. 📈 P&L Breakdown – Show Me the Money
FY25 breakdown:
- Revenue: ₹1,957 Cr
- EBITDA: ₹170 Cr
- PAT: ₹52 Cr
- EPS: ₹7.98
- OPM: Just 9% vs 12–16% historical average
Margins hit by raw material price volatility and weak sugar realizations.
10. 🧢 Peer Comparison – Who Else in the Game?
| Company | P/E | ROE | Sales (Cr) | PAT (Cr) | P/B |
|---|---|---|---|---|---|
| Balrampur Chini | 27.8x | 12.1% | ₹5,415 | ₹437 | 3.2x |
| Triveni Engg | 33.8x | 7.9% | ₹5,689 | ₹238 | 2.6x |
| Dalmia Sugar | 8.3x | 12.4% | ₹3,745 | ₹384 | 0.98x |
| Dhampur Sugar | 19.4x | 4.6% | ₹1,957 | ₹52 | 0.88x |
✅ Dhampur is cheap on P/B but expensive on earnings — a rare combo caused by shrinking profits and stagnant volume growth.
11. 🧾 Miscellaneous – Shareholding, Promoters
| Shareholder Group | Mar 2023 | Mar 2024 | Mar 2025 |
|---|---|---|---|
| Promoters | 49.09% | 49.12% | 49.10% |
| FIIs | 7.57% | 2.14% | 1.98% |
| DIIs | 0.47% | 0.46% | 0.47% |
| Public | 42.88% | 48.30% | 48.45% |
📉 FIIs have ghosted the stock. Promoters stable, but no buying despite depressed valuation.
12. 🧑⚖️ EduInvesting Verdict™
Dhampur Sugar is like your IIT batchmate who peaked in the third year — impressive history, promising future, but stuck in a productivity slump.
- Ethanol tailwinds? Yes.
- Government support? Ongoing.
- Execution? Meh.
- Margins? Weak.
- Buyback? PR move?
Unless sugar prices rise or ethanol margins really kick in, this is more of a deep-value trap than a sweet spot.
🎯 Fair Value Estimate
- Assuming normalized EPS of ₹10–12
- 10–12x P/E gives us FV range = ₹100–₹144
📌 CMP ₹155 is already at the upper end of hope. Not expensive, but not the no-brainer it once was.
✍️ Written by Prashant | 📅 July 10, 2025
Tags: Dhampur Sugar, Ethanol Blending, Sugar Stocks, Buyback India, FMCG, Smallcap Energy, Molasses, Distillery Stocks, EduInvesting, PSU Sugar Revival, U.P. Sugar Industry
