At a Glance
Dhampur Bio Organics Ltd is a 2022 demerged sugar entity trying to blend ethanol, biomass, and biofuels into a sustainable future. But FY25 profits fell 67% vs FY24. ROE is below 2%, the stock trades at 0.54x book, and FII exit is accelerating. Is this undervalued… or undercooked?
1️⃣ Introduction with Hook
Sugar stocks are cyclical.
Biofuel is sexy.
And Dhampur Bio is trying to straddle both.
But when inventory days hit 288, working capital cycles extend to 270 days, and profits fall 67% YoY, even the sweetest stock can leave a bitter aftertaste.
Let’s chew through this molasses.
2️⃣ WTF Do They Even Do?
- 🎂 Born: 2022 (demerger from Dhampur Sugar Mills)
- 🌱 Business: Integrated sugarcane processing → refined sugar, ethanol, co-gen biomass power
- 🚜 Facilities: 3 manufacturing units (Asmoli, Mansurpur, Rajpura)
- ⚡ Bio Agenda: Big push on green energy, molasses-to-ethanol blending, and “agro-industrial” integration
They want to be India’s next green fuel champion. But till now, it’s mostly sugar and dreams.
3️⃣ Financials Overview – Profit, Margins, ROE, Growth
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue (₹ Cr) | 2,408 | 1,864 | 1,862 (flat) |
| Net Profit (₹ Cr) | 111 | 46 | 15 ⬇️ |
| EPS (₹) | 16.7 | 7.0 | 2.2 |
| ROE | 6% | 2% | 1.56% |
| OPM | 8% | 8% | 7% |
😬 Three years, one trend: declining profits + flat revenues + falling margins.
Not the kind of combo that screams multibagger.
4️⃣ Valuation – Is It Cheap, Meh, or Crack?
- CMP: ₹82.4
- Book Value: ₹152 → P/B = 0.54x
- P/E (TTM): 34.8
- Market Cap: ₹547 Cr
- FY25 PAT: ₹15 Cr
🔍 Fair Value Estimate:
Let’s assume:
- Normal sugar sector P/E: 12–15
- Use peak EPS from FY23 = ₹16.7
- Or base it on Book Value
Based on EPS:
iniCopyEditFV = ₹16.7 × 12–15 = ₹200–₹250 (historical high, not sustainable now)
Based on Book:
iniCopyEditFV = 0.7–0.8x Book = ₹106–₹122 (on asset base recovery logic)
🧠 Current stock price (₹82) is:
- 🔻 Far below book
- ❌ Still expensive on earnings
📉 Verdict: Deep value optics, but underlying business is weakening.
5️⃣ What’s Cooking – News, Triggers, Drama
- 🗳️ Declared ₹1.25 dividend (1.5% yield) — nice gesture
- 🧾 FY25 net profit tanked 67% YoY
- 📉 FII holding dropped from 8.5% (2022) to 0.5%
- 📢 AGM on July 11, 2025 — retail questions expected
- 🏭 Inventory bloated → Sugar glut + ethanol demand delays?
🚫 No new capacity. No PLI. No fresh contracts. Just survival mode.
6️⃣ Balance Sheet – How Much Debt, How Many Dreams?
| Metric | FY25 |
|---|---|
| Equity Capital | ₹66 Cr |
| Reserves | ₹945 Cr |
| Borrowings | ₹1,162 Cr |
| Debt/Equity | ~1.2x |
| CWIP | ₹79 Cr (from ₹13 Cr in FY24) |
Debt is inching up. CAPEX in progress. But profits are falling.
😟 Not a great mix.
7️⃣ Cash Flow – Sab Number Game Hai
| FY | CFO | CFI | CFF | Net |
|---|---|---|---|---|
| FY23 | ₹368 Cr | -₹209 Cr | -₹78 Cr | ₹81 Cr |
| FY24 | -₹101 Cr | -₹166 Cr | ₹170 Cr | -₹98 Cr |
| FY25 | ₹130 Cr | -₹145 Cr | ₹19 Cr | ₹3 Cr |
Positives:
- FY25 had positive CFO
Negatives: - Operating cash can’t fund investing needs
- Relies on external financing
🚨 Classic sugar biz liquidity trap.
8️⃣ Ratios – Sexy or Stressy?
| Metric | FY25 |
|---|---|
| ROE | 1.56% |
| ROCE | 3.97% |
| Interest Coverage | Barely above 1x |
| Dividend Payout | 56% (despite falling profit) |
| Inventory Days | 288 |
| Working Capital Cycle | 270 days |
📛 That’s almost 3/4th of the year stuck in sugar bags and receivables.
9️⃣ P&L Breakdown – Show Me the Money
| Segment | FY25 |
|---|---|
| Revenue | ₹1,862 Cr |
| Operating Profit | ₹135 Cr |
| Net Profit | ₹15 Cr |
| Depreciation + Interest | ₹121 Cr combined |
Basically, most of the profit is lost to financing and fixed cost absorption.
🔟 Peer Comparison – Who Else in the Sugar Rush?
| Company | P/E | ROE | P/B | Market Cap |
|---|---|---|---|---|
| Balrampur Chini | 27.3 | 12.1% | 3.14 | ₹11,913 Cr |
| Piccadilly Agro | 53.2 | 20.1% | 7.94 | ₹5,438 Cr |
| Dalmia Bharat Sugar | 8.8 | 12.4% | 1.04 | ₹3,356 Cr |
| Dhampur Bio | 34.8 | 1.56% | 0.54 | ₹547 Cr |
📉 Bottom of the barrel in ROE and profits. Valuation gap deserved.
1️⃣1️⃣ Miscellaneous – Shareholding, Promoters
| Type | FY23 | FY25 |
|---|---|---|
| Promoters | 50.2% | 50.8% |
| FIIs | 5.3% | 0.54% 👎 |
| Public | 44% → 48.2% |
Retail is increasing… FII is running. 👀
🧠 EduInvesting Verdict™
🥤 Dhampur Bio Organics is like sugarcane juice left out in the sun—turning sour fast.
- 📉 Falling profits
- 🏭 Stagnant revenue
- 💸 Heavy working capital
- 🚪 FII exodus
- 🐢 Biofuel optionality not yet realized
But with 0.54x book, ₹82 CMP, and Rs 1.25 dividend, it’s also a possible bet on revival. Just not for the impatient.
🎯 Fair Value Range: ₹60 – ₹90
Based on asset value + muted profit outlook
✍️ Written by Prashant | 📅 30 June 2025
Tags: Dhampur Bio Organics, Sugar Stocks, Ethanol Stocks, Sugar Sector India, Biofuel India, Cyclical Stocks, FII Exit, EduInvesting Deep Dive, Value Stocks India
