ICICI Direct Suggests Small Cap Sugar Stock That Rallied 143% In 3-Years, Buy For 32% Return

Brokerage firm ICICI Direct has assigned buy call to Dwarikesh Sugar Industries with a target price of Rs 120 apiece. If you buy Dwarikesh Sugar Industries now, you can fetch 32% return. The stock has given multibagger returns to investors. The company has a market capitalisation of Rs 1,712.60 crore. Check details below:

1. Dwarikesh Sugar Industries Stock Performance & Return

The last trading price of the stock is Rs 90.95 apiece with an intraday gain of 2.25%. The stock's 52-week high is Rs 148.45 apiece and 52-week low is Rs 79.00 apiece, respectively. The stock declined 15% in last 6-months and 7% in last 1-year. It gave a return of 143% in last 3-years and 125% in last 5-years.

2. Dwarikesh Sugar Industries Valuation

According to ICICI Direct, "DSL's share price has gone up 111% in the last five years (from Rs 42 in February 2018 to Rs 89 in February 2023). We cut our sales & earnings estimate considering lower sugar volumes, dip in recovery & increase in sugarcane SAP in 2023-24 sugar season. We maintain our BUY rating on the stock. We value the stock at Rs 120, valuing the business at 12x FY24 PE."

DSL witnessed weak results with a sharp dip in sugar sales. Sales were down 36.2% YoY on account of lower sugar sales volumes. EBITDA was at Rs 26.5 crore, down 51.9% YoY, with margins at 6.9%. Consequently, PAT was at Rs 10.5 crore (down 63.6% YoY)

3. Dwarikesh Sugar Industries About

Dwarikesh Sugar (DSL) is a UP based sugar company with sugar crushing capacity of 21500 TCD, distillery capacity of 337.5 KLD & co-generation capacity of 96 MW. The company would be diverting 15-20% of sugarcane towards juice ethanol & remaining towards B-heavy ethanol, which would result in 1.4 lakh tonnes (lt) of sugar equivalent sugarcane diversion towards ethanol.

Disclaimer

The stock has been picked from the brokerage report of ICICI Direct. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.