🔍 At a Glance
Once hailed as a promising sugar-to-ethanol transition story, Dwarikesh Sugar has ended up as the guy who brought jaggery to a cake fight. In FY25, profit fell 72%, margins halved, and ROE crashed to 3%. Despite ethanol euphoria, the stock is down 33% in one year and 21% over three. With a P/E of 39x and no dividend in sight, investors are left wondering: Where’s the sugar rush, bro?
🧩 1. WTF Do They Even Do?
- Dwarikesh Sugar is a U.P.-based sugar miller with verticals in:
- Sugar production (core)
- Ethanol / industrial alcohol 🚗🍾
- Power co-generation ⚡ (bagasse-fueled)
- Installed capacity: ~21,500 TCD sugar crushing
- Ethanol blending push is supposedly the growth lever
But judging by the FY25 numbers… someone forgot to turn the blender on.
📊 2. Financials – Profit, Margins, ROE
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 1,839 | 1,979 | 2,103 | 1,710 | 1,359 🔻 |
| EBITDA (₹ Cr) | 201 | 291 | 215 | 205 | 113 |
| PAT (₹ Cr) | 92 | 155 | 105 | 84 | 23 🪦 |
| ROE (%) | 4.9 | 8.2 | 5.6 | 4.4 | 1.3 |
| OPM (%) | 11% | 15% | 10% | 12% | 8% |
🧠 Translation:
- Sales are down ~35% in 2 years
- Profits collapsed by 72% YoY
- Margins: Gone with the ethanol wind
💸 3. Valuation – Is It Cheap, Meh, or Crack?
| Metric | Value |
|---|---|
| CMP | ₹49.8 |
| Market Cap | ₹922 Cr |
| P/E | 39.5x 🤕 |
| Book Value | ₹43.5 |
| P/B | 1.14x |
EduInvesting Fair Value Calculation:
Assume normalized PAT ₹60 Cr
Assign conservative P/E = 10–12x
📉 Fair Value = ₹23 – ₹28 range
Current Price = Almost 2x that.
So unless they start printing ethanol like it’s Patanjali cow urine, this looks rich.
🍿 4. What’s Cooking – News, Triggers, Drama?
- ❌ FY25 Revenue -35% from FY23 peak
- ❌ PAT down to ₹23 Cr from ₹155 Cr in FY22
- ✅ Still no dividend 😑
- 🥴 Ethanol play hasn’t scaled as promised
- 📉 FII holding fell from 7.1% to 2% in 2 years
- 🧑💻 Analyst calls full of optimism; numbers full of contradiction
🏦 5. Balance Sheet – How Much Debt, How Many Dreams?
| FY | Net Worth (₹ Cr) | Borrowings (₹ Cr) | Total Assets (₹ Cr) |
|---|---|---|---|
| FY21 | 579 | 609 | 1,445 |
| FY23 | 740 | 375 | 1,280 |
| FY25 | 807 | 507 | 1,463 |
- Debt is rising again after repayment streak
- Reserves have flatlined despite operating for two decades
- Capex? Nah. This is a stagnation story, not a scale-up one
💰 6. Cash Flow – Sab Number Game Hai
| FY | CFO (₹ Cr) | CFI | CFF | Net Cash |
|---|---|---|---|---|
| FY23 | ₹314 | ₹(92) | ₹(222) | ₹0 |
| FY24 | ₹13 | ₹(41) | ₹27 | ₹(0) |
| FY25 | ₹61 | ₹(7) | ₹27 | ₹81 ✅ |
- Positive CFO in FY25 is a rare W
- Capex minimal = maybe ethanol dreams on hold?
- ₹81 Cr net cash flow = someone’s selling sugar at D-Mart margins and calling it a win
📏 7. Ratios – Sexy or Stressy?
| Metric | FY25 |
|---|---|
| OPM | 8% |
| NPM | 1.6% |
| ROE | 2.9% |
| ROCE | 5.5% |
| Inventory Days | 265 ⏳ |
| CCC | 271 days 🚨 |
High inventory + long working capital + ROE < 3% = textbook capital misallocation
📈 8. P&L Breakdown – Show Me the Money
| Component | FY25 |
|---|---|
| Revenue | ₹1,359 Cr |
| EBITDA | ₹113 Cr |
| Depreciation | ₹49 Cr |
| Interest | ₹19 Cr |
| PBT | ₹52 Cr |
| PAT | ₹23 Cr |
You’re telling me a ₹1,359 Cr business made ₹23 Cr net profit?
That’s 1.7% NPM on a good year.
🧊 9. Peer Comparison – Who Else in the Game?
| Company | P/E | ROE | OPM | CMP/BV | Sales (₹ Cr) |
|---|---|---|---|---|---|
| Dwarikesh | 39.5 | 2.9% | 8% | 1.14x | ₹1,359 |
| Balrampur | 27.3 | 12.1% | 13% | 3.14x | ₹5,415 |
| Triveni Eng | 35.2 | 7.9% | 8.4% | 2.69x | ₹5,689 |
| Piccadily Agro | 53.1 | 20.1% | 22.3% | 7.94x | ₹818 |
TL;DR: Everyone’s overvalued. But Dwarikesh is overvalued without the profit to back it.
👥 10. Shareholding – Promoters, FIIs, Mango Public
| Holder | Mar ’23 | Mar ’25 |
|---|---|---|
| Promoters | 42.09% | 42.10% |
| FIIs | 4.4% | 2.0% 🔻 |
| Public | 50.1% | 55.7% 🔺 |
| DIIs | 3.3% | 0.03% 🧻 |
FII & DII running for cover. Public left holding the sugar bag.
🧠 EduInvesting Verdict™
Dwarikesh Sugar is what happens when ethanol hype meets execution diabetes.
- FY25 profit crash shows ethanol is not immunity syrup
- ROE near FD levels
- FII + DII bailing out, no dividend to compensate
- Valuation still priced like it’s FY22
📉 This is not a buy/sell reco. Just a reminder that ethanol dreams don’t pay off unless your P&L agrees.
🎯 EduInvesting Fair Value: ₹23 – ₹28 range (Based on normalized P/E of 10–12x)
Current CMP: ₹49.8
👀 Margin of safety? As absent as sugar prices in the monsoon.
✍️ Written by Prashant | 📅 June 30, 2025
Tags: Dwarikesh Sugar, Ethanol Stocks, Sugar Sector, UP Sugar Mills, Low ROE Stocks, EduInvesting
