Dalmia Bharat Sugar Reports 56.3% Drop in Net Profit for Q2 FY26 Amidst Revenue Growth

Dalmia Bharat Sugar and Industries Limited announced its financial results for the second quarter of the fiscal year ending September 2025 (Q2 FY26). The company's net profit saw a significant year-on-year decline of 56.3%, dropping to ₹23.32 crore from ₹53.37 crore in the same period last year (Q2 FY25). Despite the profit decrease, the company's revenue for the quarter increased by 7.4% to ₹988.7 crore, up from ₹920.3 crore in Q2 FY25.

Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) experienced a decline of 16.8%, falling to ₹56 crore from ₹67.3 crore year-on-year. Consequently, the EBITDA margin compressed to 5.6% from 7.3% in the comparable quarter of the previous fiscal year.

Sugar sales volume for the quarter rose by 2% to 1.8 lakh metric tonnes (LMT), with the average net selling rate (NSR) increasing by 4% to ₹39.91 per kg. Distillery volumes also saw a 3% increase, reaching 4.02 crore litres.

For the first half of the fiscal year ended September 30, 2025, the company registered total revenue of ₹1,930 crore, a 3% increase year-on-year. However, the company incurred a net loss of ₹63 crore for this six-month period. This performance was affected by higher sugar costs due to the Fair and Remunerative Price (FRP) hike in Maharashtra, lower sugar recovery rates, and reduced operations in cane-based distilleries. Support came from increased sugar NSR, higher grain distillery volumes, and a power tariff revision by the Uttar Pradesh Electricity Regulatory Commission (UPERC).

Impact This news is crucial for investors as it highlights margin pressures and operational challenges faced by Dalmia Bharat Sugar. The decline in profitability, despite revenue growth, may lead to caution among investors and could affect the company's stock performance. Investors will be looking for strategies to navigate rising costs and improve margins. Rating: 5/10

Difficult Terms: • FRP (Fair and Remunerative Price): The minimum price set by the government that sugar mills must pay to sugarcane farmers for their produce. • LMT (Lakh Metric Tonnes): A unit of weight commonly used in India, representing 100,000 metric tonnes. • NSR (Net Selling Rate): The average price realised from the sale of a product after accounting for any discounts, returns, or taxes. • EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortisation): A metric used to evaluate a company's operational performance by excluding interest, taxes, depreciation, and amortisation expenses. • EBITDA margin: This ratio, calculated by dividing EBITDA by revenue, indicates the profitability generated from a company's core business operations. • Distillery volume: The total quantity of alcohol or spirits produced by the company's distillery units. • Cane-based distilleries: Industrial facilities that use sugarcane or its by-products to produce alcohol, ethanol, or other chemical products. • Grain distilleries: Industrial facilities that use grains such as corn or wheat to produce alcohol or ethanol. • UPERC (Uttar Pradesh Electricity Regulatory Commission): An independent statutory body established to regulate the electricity sector within the state of Uttar Pradesh, India. • Power tariff revision: An update or change in the rates charged by electricity providers for the consumption of power.