Sugar Manufacturing company’s shares rose 9 percent to Rs 81.90 apiece on Monday after the company announced plans to expand ethanol production capacity. The company has a market value of Rs 718 crore.
The shares of Davangere Sugar Company Ltd closed at Rs 76.34, up 1.92 percent from its previous close price of Rs 74.90.
As per company’s exchange filing,The company’s board of directors has approved an expansion of ethanol production capacity from 65 KLPD (Kilo Litre Per Day) to 110 KLPD, for which the company would invest 54 crores.The company’s existing capacity utilisation is at 99.96%.
The company’s ethanol plant expansion is driven by the Indian government mission to achieve 20 percent blending (E20) by 2025.
According to the company’s financials, revenues climbed by 125 percent year on year, from Rs 124 crores in FY 21-22 to Rs 279 crores in FY 22-23. Within the same timeframe, Net profit increased by 160 percent, from Rs 5 crores to Rs 13 crores.
In the past year, the company’s share price increased from Rs 30.95 to Rs 76.34 giving multibagger returns of 146 percent. Therefore, if an investor had invested Rs 1 lakh in the company’s shares in the last year, the value of their holdings would have been Rs 2.46 lakhs today!
The profitability ratio of the firm has grown year on year, with return on equity increasing from 2.26 percent to 4.23 percent and return on capital employed increasing from 5.89 percent to 10.58 percent.
Davangere Sugar manufactures sugar from sugarcane and generates electricity through co-generation.The company has a manufacturing operation in Karnataka with a sugar crushing capacity of 4750 TCD.
As per the latest shareholding pattern, promoters of the company hold a 74.45 percent stake, and retail investors hold 25.54 percent stake in the company.
Written by Omkar Chitnis
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