Dwarikesh Sugar Industries Limited

Consumer Defensive — Confectioners · NSE

₹46.45−₹0.20 (−0.43%)

DalalBaazaar Score

41 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

Driven by micro-cap size, which brings thin liquidity, a very high earnings multiple, which leaves little margin for disappointment.

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

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:09 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 Dwarikesh Sugar Industries Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Dwarikesh Sugar Industries Limited engages in the manufacture and sale of sugar in India. It is also involved in the co-generation and sale of power; manufacture of industrial alcohol, molasses, and ethanol; and production of hand sanitizers and liquid carbon dioxide.

IndustryConfectioners

SectorConsumer Defensive

Employees1,455

Annual revenue₹1,388 Cr

How does it make money?

Turns over ₹1,388 Cr a year. Of every ₹100 of sales, about ₹2 reaches shareholders as profit, with ₹7 left at the operating level before interest, tax and depreciation. Each of its 1,455 employees supports ₹95.4 lakh of revenue a year, the signature of a people-led business.

EBITDA margin6.7%

Net margin2.2%

Revenue / employee₹95.4 lakh

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 5.8% 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.

ROCE5.8%

ROE3.7%

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 -34% while net margin moved -56% 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-34%

Margin effect-56%

DalalBaazaar Score

41/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 12.8% a year
✗ Profit has declined at 33.5% a year

Quality vs. Valuation

Company Quality

39/ 100

Weak

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

Valuation

37/ 100

Expensive

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

59.6x

3Y Median

16.4x

40 monthly readings · mean 20.6x · range 8.3x–37.3x

Sector Median

43.3x

median of 4 sector peers

⚠️Current valuation is approximately 264% above its 3y median of 16.4x. 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 38% above the peer median of 43.3x.

vs. its own history

Expensive

16.4x median over 40 months · +264%

vs. sector peers

Expensive

43.3x median of 4 peers · +38%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

59.6x

P/B

1.04x

EV/EBITDA

12.7x

PEG

1.85

Dividend Yield

0.22%

What's Good / What's Bad

🟢 What's Going Well2

Debt is being paid down
Total debt is down 10% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention5

Margins are compressing
EBITDA margin has slipped from 10.8% to 6.7% over 3 years.
Return on equity is falling
ROE has dropped from 14.2% to 3.7% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 18.0% to 5.8% — often a sign of competition or overexpansion.
Inventory building faster than sales
Inventory is up 21% against revenue growth of -34% — stock may not be moving.
Valuation above its historical average
At 59.6x the stock trades 264% above its own median of 16.4x.

Red Flags

3 items require attention · 3 watch

🟡Profit is decliningFinancial
Net profit is down 71% over 3 years.
🟡Margins are compressingFinancial
EBITDA margin is down 4.1 points over 3 years.
🟡Inventory building faster than salesFinancial
Inventory up 21% against revenue up -34% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Self-funding with balance-sheet headroom
Positive free cash flow of ₹122 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
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 10.8% to 6.7%. 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 3.6x 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 264% 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 14.2% to 3.7%. 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 5%✓ 6.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 3.6x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Free cash flow remains positive✓ ₹122 Cr
Profit that never becomes cash eventually stops being profit.
4ROCE stays above 8%✗ 5.8%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Interest cover stays above 4x✓ 4.1x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

5 / 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

5 good · 2 neutral · 4 weak

Market Cap

₹861 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

59.6x

Expensive

Expensive — verify against sector peers

P/B Ratio

1.04x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹0.78

Profitable

Profitable on a per-share basis

ROE

3.7%

Weak

Weak capital efficiency

ROCE

5.8%

Weak

Low return on total capital employed

Debt/Equity

0.41x

Low

Conservative leverage

Revenue Growth (YoY)

-11.7%

Shrinking

Sales are contracting

Profit Growth (YoY)

32.1%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.22%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹122 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹46.45

Operating Margin

-9.3%

Weak

Thin margins leave little room for error

Net Margin

1.1%

Weak

Very little revenue reaches the bottom line

Current Ratio

2.33

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.06

Defensive

Steadier than the market

52W Range Position

52%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

44.2 / 45.8

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

54.3

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹2,091 Cr	₹1,709 Cr	₹1,353 Cr	₹1,388 Cr	-12.8%
EBITDA	₹225 Cr	₹216 Cr	₹119 Cr	₹93 Cr	-25.6%
EBITDA Margin	10.8%	12.6%	8.8%	6.7%	—
PAT (Net Profit)	₹105 Cr	₹84 Cr	₹23 Cr	₹31 Cr	-33.5%
EPS	₹5.56	₹4.44	₹1.26	₹1.66	-33.2%
ROE	14.2%	10.2%	2.9%	3.7%	—
ROCE	18.0%	15.8%	7.1%	5.8%	—
Total Debt	₹375 Cr	₹456 Cr	₹507 Cr	₹336 Cr	-3.5%
Free Cash Flow	₹215 Cr	-₹37 Cr	₹48 Cr	₹122 Cr	-17.2%

🔴 Revenue has shrunk at 12.8% a year over 3 years.

🔴 EBITDA has shrunk at 25.6% a year over 3 years.

🔴 EBITDA Margin has fallen from 10.8% to 6.7% over 3 years (-4.1 pts).

🔴 PAT (Net Profit) has shrunk at 33.5% a year over 3 years.

🔴 EPS has shrunk at 33.2% a year over 3 years.

🔴 ROE has fallen from 14.2% to 3.7% over 3 years (-10.4 pts).

🔴 ROCE has fallen from 18.0% to 5.8% over 3 years (-12.2 pts).

🟢 Total Debt has shrunk at 3.5% a year over 3 years.

🔴 Free Cash Flow has shrunk at 17.2% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,298 Cr

Total Liabilities

₹469 Cr

Total Debt

₹336 Cr

Cash & Equivalents

₹13 Cr

Operating Cash Flow

₹129 Cr

Capex

-₹7 Cr

Shareholding (proxy)

Institutional Holding

0.8%

Insider Holding

42.4%

Corporate Actions

Dividend Rate

₹0.1

Ex-Dividend Date

30 Jul 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

2 positive1 mixed3 general

Dwarikesh Sugar Industries Reports Higher Q4 Net Profit, Recommends Dividend for FY26

scanx.trade, 14 OctCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Dwarikesh Sugar Industries Share Price rises 9.75% today

Univest, 25 SeptPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Is It Worth Considering Dwarikesh Sugar Industries Limited (NSE:DWARKESH) For Its Upcoming Dividend?

Simply Wall Street, 26 JulCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Sugar stocks Bajaj Hind, Dwarikesh, Dhampur soar up to 12%; hit 52-wk highs

Business Standard, 24 Aug

Better Sugar Stock: Dwarikesh Sugar Industries vs Shree Renuka Sugars

Equitymaster, 29 Sept

Sugar Stocks Rally Up to 18%: Why Balrampur Chini, Dwarikesh Sugar, Bajaj Hindusthan and Others Are Rising Today

India Infoline, 20 Aug

Watch Items

Revenue growth is negative (-11.7%) 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 HealthStrong16.3/20

🔴GrowthWeak2.4/20

🔴ProfitabilityWeak4.6/15

🔴ValuationDemanding6.2/15

🟡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 5%6.7%
✗Debt / EBITDA falls below 3x3.6x
✓Free cash flow remains positive₹122 Cr
✗ROCE stays above 8%5.8%
✓Interest cover stays above 4x4.1x