Dalmia Bharat Sugar & Industries Limited (DBSIL) has announced its financial results for the first quarter, revealing a mixed performance with improved sugar net sales realization (NSR) but lower overall profitability.

Financial Highlights

• Revenue from operations stood at ₹942.87 crore, down from ₹960.26 crore in the same quarter last year
• Net profit after tax (PAT) decreased to ₹38.37 crore from ₹54.73 crore in the previous year quarter

Management Changes

• The board appointed Sanjeev Raghunathrao Desai as Unit Head of Ninaidevi Unit for a two-year term
• Desai brings 35 years of experience in managing sugar units and holds a Master's degree in Commerce

Corporate Actions

• The board approved Birla Tyres Limited's request for reclassification from 'Promoter and Promoter Group' category to 'Public' category
• Birla Tyres became a wholly owned subsidiary of Himadri Specialty Chemical Limited effective April 7, 2025, and holds no shares in Dalmia Bharat Sugar

Credit Rating Upgrade

• The company's credit rating was upgraded to CARE AA+ with stable outlook

Segment Performance

Sugar Segment

• Average sugar NSR improved by 5% to ₹39.80/kg

Distillery Segment

• Distillery sales volume increased by 19% YoY to 5.15 crore litres

Management Commentary

Mr. Pankaj Rastogi, Whole-Time Director & CEO of DBSIL, commented on the performance, stating, "Despite lower crushing in Uttar Pradesh and subdued margins in cane-based distilleries, the Company recorded a PAT of ₹38 crores and a turnover of ₹957 crores, driven by higher volumes in grain distilleries and a remarkably higher sugar NSR."

Strategic Focus

The company is committed to improving cane yields and area by leveraging next-generation technologies, including artificial intelligence, as part of its strategic priorities.

Outlook

The company expects a promising sugarcane crop outlook based on predictions of above-normal rainfall with optimal distribution. DBSIL anticipates an increase in the Minimum Selling Price (MSP) of sugar, which is expected to support the industry. The company also noted that a 20% ethanol blending percentage was achieved, in line with the Ethanol Blending targets.

In conclusion, while DBSIL faced some challenges in Q1, the company's improved sugar NSR and strong performance in the distillery segment helped mitigate the impact of lower sugar volumes and reduced profitability. The company remains focused on technological advancements and strategic initiatives to drive future growth.

Dalmia Bharat Sugar & Industries has received a favorable interim order from the Allahabad High Court, allowing the company to continue moving trucks containing industrial alcohol from its distillery. This development comes in the wake of a significant fee dispute with the Uttar Pradesh government over ethanol supply.

Court Order Details

The Allahabad High Court's interim order permits Dalmia Bharat Sugar, along with other members of the UP Sugar Mills Association, to transport industrial alcohol from their distilleries under specific conditions:

1. The company must maintain proper records of the movements.
2. An indemnity bond must be furnished before the district's Excise Officer.

This arrangement is subject to further orders and the final outcome of the writ petition filed by the company.

Background of the Dispute

The dispute arose when the Uttar Pradesh government demanded export pass fees amounting to Rs. 21.10 crore on ethanol supply. This demand covers the period from the financial year 2018-19 to 2025-26. Challenging this retrospective fee imposition, Dalmia Bharat Sugar, through the UP Sugar Mills Association, filed a writ petition in the Allahabad High Court.

Implications and Next Steps

While the interim order provides temporary relief, it comes with a caveat. The court has stipulated that if the writ petition fails and the companies are held liable to pay the fee, they shall do so, subject to further appeal rights if available under law.

According to the LODR disclosure dated August 1, 2025, the High Court's order was uploaded on July 30, 2025. The company's Company Secretary and Compliance Officer, Rachna Goria, confirmed this development in the official filing.

This interim relief is crucial for Dalmia Bharat Sugar and other affected sugar mills in Uttar Pradesh, as it allows them to continue their operations without immediate disruption while the legal proceedings are ongoing. The final resolution of this dispute could have significant financial implications for the sugar industry in the state.

Stakeholders and industry observers will be keenly watching the progress of this case, as its outcome could set a precedent for similar fee-related disputes in the sugar and ethanol sector.