Dalmia Bharat Sugar: revenue up, profit down in H1 FY26

Dalmia Bharat Sugar and Industries Limited (DBSIL) reported a 7% year-on-year increase in Q2 FY26 turnover, reaching INR 989 crore, with half-year revenue from operations up 3% to INR 1,930 crore compared to INR 1,872 crore in H1 FY25. However, profit after tax (PAT) for the half-year significantly decreased by 42% to INR 63 crore from INR 107 crore in the previous year, while Q2 PAT fell 56% to INR 23 crore. The company cited higher sugar Cost of Production (COP) due to FRP hike in Maharashtra and lower sugar recovery, along with reduced operations in cane-based distilleries, as key factors impacting profitability.

The decline in profitability was partially offset by higher sugar NSR, increased volumes in grain distilleries, and a power tariff revision. Sugar sales volume for H1 FY26 decreased by 6% to 3.2 Lakh MT, although the average realization rose by 4% to INR 39.86/kg. Distillery sales volume, however, increased by 12% to 9.17 crore litres. An emphasis of matter in the audit report highlights the demerger of the company’s "Refractory and Travel Agency" non-core businesses into Dalmia Bharat Refractories Limited, effective July 1, 2023, which has impacted comparative figures.

Future outlook indicates promising sugarcane crop conditions due to above-normal rainfall. However, increased sugarcane prices in Uttar Pradesh for SS 2025-26 and the need for early decisions on sugar export and ethanol prices will be crucial to mitigate ongoing margin pressures.