Davangere Sugar Company’s 9MFY25 PAT Increases 40% YoY; Scrip At 10% Upper Circuit Limit

Davangere Sugar Company Limited (BSE: 543267, NSE: DAVANGERE), which has established itself as one of the key sugar producers diversifying into renewable energy, has released its un-audited financial statements for the quarter ended December 31 along with the results of its operations for the nine-month period ending on December 31, 2024. The company has achieved remarkable improvements in all key financial metrics, courtesy of the company's strategic transformation for growth and investment in sustainability measures.

The net profit of the company for the nine-month period ending December 31, 2024 went up by 40% YoY to Rs 1,076.14 lakhs from Rs 768.48 lakhs earned during the previous year. For Q3, net profit gained 428% QoQ from Rs 1.28 crore to Rs 6.76 crore. Revenue for Q3 reached Rs 73.17 crore an 86% increase QoQ while total revenue for the nine month period was Rs 1,592.8 crore. EBITDA for the third quarter stood at Rs 18.2 crore for the third quarter, a 14% increase YoY.

In September of 2024, the company planned to conduct a rights issue of shares that was approved by the company's board to raise Rs 400 crores. The proceeds will be directed towards improving the company's ethanol production capacity and the necessary infrastructure facilities. The company is also facilitating sugarcane farmers by providing them with subsidized seeds and other inputs to increase their productivity. The Davangere Sugar Company also undertakes the positive endeavour of planting over 15,000 acres of sugarcane to ensure a stable supply of raw materials while positively impacting the community. More help is provided by giving out subsidies for plantations and other monetary aid to the farmers.

The ethanol sector has experienced remarkable growth as grain-based ethanol continues to represent 51% of the country's total production in FY25, compared to 37% in FY24. This growth is in step with government schemes encouraging ethanol production from grain and indicates a distinct shift to sustainable energy sources.

Davangere Sugar Company boasts of a new plant, which includes a sugar factory with a capacity of 6,000 TCD, an ethanol distillery that produces 65 KLPD, and a co-generation power plant with a capacity of 24.45 MW. The company has five storage units for sugar, each with a capacity of 60,000 tonnes, which ensures efficient distribution and excellent storage.

The management focuses on providing the farmers with assured timely returns, modern farming techniques, and financial aid. The company's goal to enhance innovation and sustainability enables it to not only secure raw material supply but also generate social and economic impact on the local people. Since it was established in 1970 at Kukkuwada in Karnataka, Davangere Sugar Company has been instrumental in the development of this region. Now, it deals with sugar, ethanol, and sustainable power generation, servicing all markets ensuring quality, innovation, and sustainability.