Dhampur Sugar Mills Limited

Consumer Defensive — Confectioners · NSE

₹196.75−₹0.24 (−0.12%)

DalalBaazaar Score

43 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

Driven by micro-cap size, which brings thin liquidity, falling profits.

In simple words: The business is earning a fairly low return on the money invested in it, but sales are shrinking. The direction of profits is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:10 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

Company site ↗

The 60-second version of Dhampur Sugar Mills Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Dhampur Sugar Mills Limited, together with its subsidiaries, manufactures and sells sugar and its byproducts in India. It operates in six segments: Sugar, Chemicals, Ethanol, Potable Spirits, Power, and Other.

IndustryConfectioners

SectorConsumer Defensive

Employees1,280

Annual revenue₹1,961 Cr

How does it make money?

Turns over ₹1,961 Cr a year. Of every ₹100 of sales, about ₹3 reaches shareholders as profit, with ₹10 left at the operating level before interest, tax and depreciation. Each of its 1,280 employees supports ₹1.53 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin9.6%

Net margin3.3%

Revenue / employee₹1.53 Cr

Who are its competitors?

The closest listed comparisons in its industry are HINDUSTAN UNILEVER LTD., ITC LTD, NESTLE INDIA LIMITED, BRITANNIA INDUSTRIES LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

HINDUSTAN UNILEVER LTD.P/E 42.5x · ROE 21.5%

ITC LTDP/E 16.6x · ROE 27.4%

NESTLE INDIA LIMITEDP/E 59.8x · ROE 79.9%

BRITANNIA INDUSTRIES LTDP/E 44.1x · ROE 51.0%

What is its competitive advantage?Little sign of one

Returns on capital of 9.2% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

ROCE9.2%

ROE5.6%

Peer median ROE51.0%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -19% while net margin moved -49% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect-19%

Margin effect-49%

DalalBaazaar Score

43/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 6.9% a year
✗ Profit has declined at 25.5% a year
✗ Latest-year revenue growth of -20.8% is below the longer-term trend — momentum is fading
✗ Profit fell 5.3% in the latest year

Quality vs. Valuation

Company Quality

38/ 100

Weak

How good the business is, ignoring the share price entirely.

Valuation

61/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

Weak on business quality and not cheap enough to compensate.

Historical Valuation

Current P/E

18.1x

3Y Median

11.2x

40 monthly readings · mean 12.4x · range 5.9x–19.6x

Sector Median

43.3x

median of 4 sector peers

⚠️Current valuation is approximately 61% above its 3y median of 11.2x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

🟢Against its sector it trades 58% below the peer median of 43.3x.

vs. its own history

Expensive

11.2x median over 40 months · +61%

vs. sector peers

Cheap

43.3x median of 4 peers · -58%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

18.1x

P/B

1.06x

EV/EBITDA

11.4x

PEG

—

Dividend Yield

2.03%

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention5

Margins are compressing
EBITDA margin has slipped from 13.1% to 9.6% over 3 years.
Return on equity is falling
ROE has dropped from 15.1% to 5.4% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 19.7% to 9.2% — often a sign of competition or overexpansion.
Inventory building faster than sales
Inventory is up 29% against revenue growth of -19% — stock may not be moving.
Valuation above its historical average
At 18.1x the stock trades 61% above its own median of 11.2x.

Red Flags

3 items require attention · 3 watch

🟡Profit is decliningFinancial
Net profit is down 59% over 3 years.
🟡Margins are compressingFinancial
EBITDA margin is down 3.5 points over 3 years.
🟡Inventory building faster than salesFinancial
Inventory up 29% against revenue up -19% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Cheaper than its peers
It trades 58% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 13.1% to 9.6%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The debt load needs earnings to hold up
Debt is 4.8x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
The price already assumes success
The stock trades 61% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
Returns on shareholder capital are falling
ROE has dropped from 15.1% to 5.4%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 8%✓ 9.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 4.8x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Interest cover stays above 3x✗ 2.8x
How much operating profit can fall before interest stops being comfortably covered.
4Free cash flow remains positive✓ ₹214 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 8%✓ 9.2%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

6 / 11 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✗ Revenue growing year-over-year
✗ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

4 good · 4 neutral · 3 weak

Market Cap

₹1,265 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

18.1x

Fair

Fairly valued against the generic band

P/B Ratio

1.06x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹10.9

Profitable

Profitable on a per-share basis

ROE

5.6%

Weak

Weak capital efficiency

ROCE

9.2%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.75x

Moderate

Moderate leverage

Revenue Growth (YoY)

-20.8%

Shrinking

Sales are contracting

Profit Growth (YoY)

-5.3%

Falling

Profits are shrinking

Dividend Yield

2.03%

Healthy

Meaningful cash return while you hold the stock

Free Cash Flow

₹159 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹196.75

ROA

2.9%

Weak

Assets generate little profit

Operating Margin

13.8%

Average

Average margins

Net Margin

3.3%

Average

Average bottom-line conversion

Current Ratio

1.37

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.32

Defensive

Steadier than the market

52W Range Position

79%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

179.9 / 173.0

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

68.1

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹2,428 Cr	₹2,160 Cr	₹1,946 Cr	₹1,961 Cr	-6.9%
EBITDA	₹318 Cr	₹280 Cr	₹178 Cr	₹189 Cr	-15.9%
EBITDA Margin	13.1%	13.0%	9.2%	9.6%	—
PAT (Net Profit)	₹158 Cr	₹134 Cr	₹52 Cr	₹65 Cr	-25.5%
EPS	₹23.72	₹20.27	₹7.98	₹10.09	-24.8%
ROE	15.1%	12.2%	4.5%	5.4%	—
ROCE	19.7%	17.2%	9.0%	9.2%	—
Total Debt	₹744 Cr	₹981 Cr	₹936 Cr	₹899 Cr	+6.5%
Free Cash Flow	₹224 Cr	-₹126 Cr	₹180 Cr	₹214 Cr	-1.6%

🔴 Revenue has shrunk at 6.9% a year over 3 years.

🔴 EBITDA has shrunk at 15.9% a year over 3 years.

🔴 EBITDA Margin has fallen from 13.1% to 9.6% over 3 years (-3.5 pts).

🔴 PAT (Net Profit) has shrunk at 25.5% a year over 3 years.

🔴 EPS has shrunk at 24.8% a year over 3 years.

🔴 ROE has fallen from 15.1% to 5.4% over 3 years (-9.7 pts).

🔴 ROCE has fallen from 19.7% to 9.2% over 3 years (-10.5 pts).

🔴 Total Debt has grown at 6.5% a year over 3 years.

🟡 Free Cash Flow has been broadly flat over 3 years (-1.6% a year).

Balance Sheet & Cash Flow — FY2026

Total Assets

₹2,415 Cr

Total Liabilities

₹1,217 Cr

Total Debt

₹899 Cr

Cash & Equivalents

₹5 Cr

Operating Cash Flow

₹243 Cr

Capex

-₹30 Cr

Shareholding (proxy)

Institutional Holding

1.0%

Insider Holding

51.3%

Corporate Actions

Dividend Rate

₹4

Ex-Dividend Date

26 May 2026

Peer Comparison

Company	P/E	ROE
HINDUSTAN UNILEVER LTD.	42.5x	21.5%
ITC LTD	16.6x	27.4%
NESTLE INDIA LIMITED	59.8x	79.9%
BRITANNIA INDUSTRIES LTD	44.1x	51.0%

Recent News

1 positive5 general

Dhampur Sugar Mills Ltd. 52 Week High Streak And Valuation

Univest, 13 Oct

Sugar stocks Balrampur Chini, Dhampur Sugar, Uttam Sugar Mills rally up to 11%. Here are 2 triggers

The Economic Times, 24 Aug

Dhampur Sugar Mills delivers 62% return after Fair Value signal By Investing.com

Investing.com India, 07 Oct

In sweet spot! Sugar stocks surge up to 9%. What's behind the rise?

Business Standard, 06 Oct

Dhampur Sugar, Balrampur Chini to Dwarikesh Sugar: Sugar stocks rise up to 6%. Do you own any?

Livemint, 20 Aug

Dhampur Sugar Q1 Standalone Net Profit Rises to ₹5.3 Crore, Revenue at ₹785 Crore

Sahi, 31 JulResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Watch Items

Revenue growth is negative (-20.8%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🔴Business QualityWeak5.9/20

🟢Financial HealthStrong13.8/20

🔴GrowthWeak4.1/20

🔴ProfitabilityWeak4.6/15

🟡ValuationFair9.4/15

🟡RiskModerate5.2/10

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation.

This thesis breaks if

✓EBITDA margin holds above 8%9.6%
✗Debt / EBITDA falls below 3x4.8x
✗Interest cover stays above 3x2.8x
✓Free cash flow remains positive₹214 Cr
✓ROCE stays above 8%9.2%