Dwarikesh Sugar's Q1 loss widens to ₹25.73 cr as margins get squeezed
High-cost inventory from last season and weak ethanol volumes drag the sugar maker deeper into the red. Ex-factory prices are firming, but the recovery isn't here yet.
— 2 earlier stories on Dwarikesh Sugar Industries Ltd. →What's new
- Net loss more than doubled to ₹25.73 cr from ₹9.38 cr in Q1 FY26
- Total income fell to ₹360.07 cr from year-ago levels
- Sugar realisations pressured by sale of high-cost inventory from previous season
- Ethanol profitability hit by lower production and sales; no surplus bagasse sold
Why this matters
Dwarikesh is still working through old inventory, which kept sugar margins under pressure even as ex-factory prices have risen to ₹4,200-4,300 per quintal. Ethanol weakness adds to the drag. With a P/E of 25.6 and ROE of just 2.9%, the stock prices in a recovery that the numbers haven't delivered yet.
What we're watching
- Whether ex-factory sugar prices sustain at current levels through Q2
- Crop health after cane development initiatives; weather remains a risk
- Any signs of ethanol volume recovery in upcoming quarters
The full read
Dwarikesh Sugar's ₹25.73 crore net loss for the June quarter is more than double last year's ₹9.38 crore loss. Total income slipped to ₹360.07 crore. The culprit is high-cost inventory from the previous sugar season. The company sold 7.50 lakh quintals at an average ₹4,064 per quintal, but margins got squeezed as that old stock came through. Ethanol didn't help. Lower production and sales pulled profits down, and there was no surplus bagasse to sell. Management points to ex-factory prices that have risen to ₹4,200-4,300 per quintal and a promising cane crop. But the Q1 numbers are a reminder that the turnaround isn't here yet. For a micro-cap with a P/E of 25.6x and ROE of 2.9%, the market is already pricing in better days. The filing says the recovery is still conditional.
Questions answered
- Why did Dwarikesh's loss widen despite firming sugar prices?
- The company sold sugar from high-cost inventory produced in the previous season, which compressed margins. Ethanol profitability also dropped due to lower production and sales.
- What was the sugar realisation in Q1 FY27?
- Dwarikesh sold 7.50 lakh quintals at an average price of ₹4,064 per quintal. Ex-factory prices have since firmed to ₹4,200-4,300 per quintal, but the Q1 average was lower.
- How did the ethanol segment perform?
- Ethanol profitability was hampered by lower production and sales volumes. Additionally, the company had no surplus bagasse available for sale, limiting an ancillary revenue stream.
- What is Dwarikesh's outlook for the coming quarters?
- Management is cautiously optimistic: cane development initiatives point to a healthy upcoming crop, and sugar prices are firming. However, the outlook depends on weather conditions.
- Does this press release contain any new financial figures?
- No. The release adds qualitative colour (sales volumes, realisations, segment commentary) but the headline numbers (₹25.73 cr loss, ₹360 cr income) were already disclosed in the board meeting outcome.
Story so far
All notes on DWARKESH →- 28 Jul 2026 · 3:31 PM IST Dwarikesh Sugar's Q1 loss widens to ₹25.73 cr as margins get squeezed
- today Dwarikesh Sugar Q1 loss widens to ₹25.73 cr, both segments post losses
- 64d ago ICRA downgrades Dwarikesh Sugar by one notch