Ethanol Stock Under ₹60 Soars 4% After Net Profit Surges 332% in Q4 — What’s Driving Dwarikesh Sugar’s Turnaround?
Introduction
Ethanol Stock : In a surprising move that caught investors’ attention, Dwarikesh Sugar Industries Ltd, an ethanol and sugar manufacturing company trading under ₹60, witnessed a 4% rally during Friday’s trading session. The spike followed a jaw-dropping 332% quarter-on-quarter increase in net profit, signaling a potential financial revival for the small-cap stock.
Stock Movement & Historical Returns
Dwarikesh Sugar’s stock touched an intraday high of ₹50.90, up 4% from its previous close of ₹48.97, before settling around ₹49.15. Despite recent volatility, the stock has been a silent performer over the years—delivering over 160% returns in the past five years. Priced attractively under ₹60, it has reignited retail and institutional interest, especially amid India’s push toward ethanol blending.
🚀 Stellar Financial Performance in Q4 FY25
The recent rally is firmly backed by a strong financial report. Here’s a quick breakdown:
- Q4 FY25 revenue: ₹459.06 crore
🔼 Up 20.15% YoY from ₹382.05 crore
🔼 Up 45.05% QoQ from ₹316.39 crore - Q4 FY25 net profit: ₹46.33 crore
🔼 Up 102.42% YoY from ₹22.89 crore
🔼 Up 332.67% QoQ from ₹10.72 crore
However, the annual numbers paint a mixed picture:
- FY25 revenue: ₹1,365.32 crore
🔽 Down 20.68% from ₹1,721.24 crore in FY24 - FY25 net profit: ₹23.33 crore
🔽 Down 72.06% from ₹83.51 crore in FY24
While the annual decline is notable, the sharp quarterly recovery signals a potential bottoming out and revival.
🏭 Operational Strength: Manufacturing Footprint & Capacity
Dwarikesh Sugar operates three plants in Uttar Pradesh, strategically located near major sugarcane producing regions and key transport routes:
| Plant Name | Sugar Capacity (TCD) | Power (MW) | Ethanol Capacity (KLPD) |
|---|---|---|---|
| Dwarikesh Nagar | 6,500 | 20 | 162.5 |
| Dwarikesh Puram | 7,500 | 33 | – |
| Dwarikesh Dham | 7,500 | 41 | 175 |
These facilities, especially with strong ethanol production capacities, align well with India’s ethanol blending policy and can generate long-term value.
📊 Financial Ratios Snapshot
Here’s a closer look at Dwarikesh Sugar’s key valuation and performance metrics:
| Metric | Value |
|---|---|
| Market Cap | ₹901 Cr. |
| Current Price | ₹48.8 |
| 52-Week High/Low | ₹81.8 / ₹33.0 |
| Stock P/E | 38.6 |
| Book Value | ₹43.5 |
| Dividend Yield | 0.00% |
| ROCE | 5.48% |
| ROE | 2.87% |
| Face Value | ₹1.00 |
Despite modest ROCE and ROE, the low book value and strategic ethanol focus present opportunities for rerating.
💡 What’s Fueling Investor Optimism?
- Massive Q4 turnaround — A 332% net profit surge QoQ has caught the market’s attention.
- Strong ethanol infrastructure — High-capacity ethanol production puts Dwarikesh in a sweet spot, given India’s ethanol policy.
- Attractive valuation — Trading under ₹60, it appeals to value investors and retail participants.
- Strategic location — Proximity to cane-producing belts ensures efficient operations and logistics.
- Past performance — 160% returns in five years show long-term resilience.
❓ Q&A Section – Simplifying the Buzz
Q1: Why did Dwarikesh Sugar stock rally 4% on Friday?
A: The company posted a 332% QoQ increase in net profit in Q4 FY25, signaling a strong earnings rebound and drawing investor interest.
Q2: What is Dwarikesh Sugar’s core business?
A: It manufactures sugar and ethanol. With a large production capacity, it benefits from India’s ethanol blending initiatives.
Q3: How much revenue and profit did the company make in Q4 FY25?
A: Revenue was ₹459.06 crore, and net profit was ₹46.33 crore, up significantly from the previous quarter and year.
Q4: Is the stock a multibagger?
A: Historically, yes. The stock has delivered over 160% returns in five years, but future performance will depend on sustained profitability and ethanol demand.
Q5: What are the key financial metrics for investors to note?
A: A P/E of 38.6, ROE of 2.87%, and zero dividend yield. These numbers suggest growth potential, but some caution is advised.
Q6: Where are Dwarikesh Sugar’s plants located?
A: All three plants are in Uttar Pradesh, strategically placed for easy cane access and ethanol distribution.
📌 Conclusion
Dwarikesh Sugar Industries Ltd is showcasing signs of a turnaround, with robust Q4 numbers, expanding ethanol capacity, and historical outperformance. While annual figures still show some lag, the recent profit surge could mark the beginning of a growth phase. For investors looking for value in the ethanol space under ₹60, this stock deserves close attention.
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