ICICI Direct has given Buy recommendation for Dalmia Bharat Sugar with a target price of Rs. 200 in its research report issued on Feb 06, 2021

ICICI Direct’s research report on Dalmia Bharat Sugar

Dalmia Bharat Sugar reported a strong set of number with revenue growth of 20.1% & PBT growth of 13.5%. The healthy revenue growth was led by 17.9% increase in sugar sales led by higher domestic sales quota during festive season & 31.3% jump in distillery volumes given new capacities have been commissioned in the last one year. Operating profit was flat due to increase in FRP for Maharashtra mills & significant reduction in inventory (the company is holding only new season sugar inventory as on December 2020, which is a high cost inventory). However PBT grew 13.5% due to significant reduction in interest cost given debt levels have been considerably lower compared to last year. PAT growth of 39% can be attributed to lower tax provisioning during the quarter. The company sold 1.45 lakh tonnes (lt) and 2.1 crore litre of ethanol/ENA during the quarter.

Outlook

We value stock at 6x FY22E earnings with target price of Rs 200 (earlier Rs 180) and maintain BUY rating.

For all recommendations report, click here

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