Dhampur Sugar Mills Limited has submitted a Chief Financial Officer certificate confirming the proper utilization of Commercial Paper proceeds for the quarter ended December 31, 2025, in compliance with SEBI regulations. This development follows the company's earlier announcement regarding the maturity of its ₹100 crore Commercial Paper.

SEBI Compliance Certificate

The company's CFO, Susheel Kumar Mehrotra, issued the mandatory certificate on January 1, 2026, pursuant to SEBI Circular No. SEBI/HO/DDHS/P/CIR/2021/613 updated as on April 13, 2022. The certificate confirms that Commercial Paper proceeds were used for disclosed purposes and all listing conditions were adhered to during Q3FY26.

Commercial Paper Maturity Details

The company had previously announced the record date for the maturity of its Commercial Paper worth ₹100 crores. The CP maturity process is scheduled with specific timelines for investor compliance.

Regulatory Communication

Both communications were addressed to the National Stock Exchange of India Limited and BSE Limited, maintaining transparency with regulatory authorities. Company Secretary Aparna Goel (Membership No. 22787) signed the intimations, ensuring proper corporate governance protocols.

The CFO certificate represents mandatory quarterly compliance for companies that have issued Commercial Papers, demonstrating the company's adherence to SEBI's disclosure requirements and proper fund utilization practices.

India Ratings and Research (Ind-Ra) has revised the outlook for Dhampur Sugar Mills Limited (DSML) to Negative from Stable, while affirming its 'IND AA-' rating on bank loan facilities worth INR 11,708.6 crore. This revision reflects concerns over the company's weaker-than-expected credit profile and financial performance.

Key Financial Indicators

Factors Contributing to the Negative Outlook

1. Decline in EBITDA: DSML's EBITDA fell by 35% year-on-year to INR 170 crore, primarily due to:

   • Reduced cane crushing
   • Lower sugar recovery
   • Decreased ethanol sales

2. Increased Debt Levels: The company's net leverage rose to 4.5x from 3.4x in the previous year, indicating a significant increase in debt relative to earnings.

3. Working Capital Challenges: DSML's inventory levels remained elevated at 0.19 million tonnes, leading to higher working capital requirements.

4. Ethanol Segment Weakness: The EBITDA of the ethanol segment fell sharply by 75% year-on-year to INR 35 crore, with profitability margin shrinking to 7.2% from 17.7% in the previous year.

Industry Challenges

The sugar industry faces several regulatory and agro-climatic risks:

• Government intervention through measures like monthly sales quotas and export restrictions
• Dependence on government-determined fair and remunerative prices (FRP) for sugarcane
• Vulnerability to monsoon conditions affecting sugarcane yields and recovery rates

Potential for Improvement

Despite the challenges, there are factors that could support DSML's performance:

• Rebound in crushing and sugar recovery could provide some support to sugar EBITDA
• Healthy sugar prices may partially offset the impact of increased cane costs
• Improved chemical realization and plant operations could aid EBITDA recovery

Liquidity Position

DSML maintains an adequate liquidity cushion:

• Cash and cash equivalents stood at INR 124 crore
• Liquid investments worth INR 26 crore
• Average utilization of fund-based working capital limits at about 70% of drawing power

Future Outlook

The company's ability to improve profitability and manage debt levels will be crucial for its credit profile. Ind-Ra suggests that a sustained increase in profitability, leading to net leverage reducing below 2.75x and interest coverage remaining over 3.5x, could result in a revision back to a Stable outlook.

As DSML navigates these financial challenges, stakeholders will be closely monitoring the company's performance in the coming quarters, particularly its ability to manage working capital, improve operational efficiency, and adapt to the evolving regulatory landscape in the sugar industry.