Davangere Sugar Company Limited has announced its unaudited financial results for the quarter ended December 31, 2025, showing mixed performance with revenue growth offset by declining profitability. The Karnataka-based sugar manufacturer reported results that reflect the seasonal nature of the sugar industry and varying operational dynamics across its business segments.

Financial Performance Overview

The company's Q3FY26 financial performance presents a contrasting picture of revenue growth alongside significant profit decline:

The company achieved revenue growth of 13.0% in Q3FY26, with revenue from operations reaching ₹8,268.61 lakhs compared to ₹7,317.75 lakhs in Q3FY25. However, net profit declined substantially by 61.2% to ₹262.27 lakhs from ₹676.89 lakhs in the corresponding quarter of the previous year.

Cost Structure and Operational Challenges

The company faced significant cost pressures during the quarter, particularly in material consumption:

Cost of materials consumed surged by 63.8% to ₹8,630.34 lakhs, representing the primary factor impacting profitability. Power and fuel costs also increased significantly by 69.5% to ₹435.36 lakhs. However, the company managed to reduce finance costs by 22.5% to ₹632.59 lakhs and employee benefit expenses by 14.0% to ₹223.46 lakhs.

Segment-wise Performance Analysis

The company operates across four main segments with varying performance levels:

The distillery segment remained the primary profit contributor with a segment result of ₹1,093.97 lakhs, while the sugar segment reported a loss of ₹246.62 lakhs. Co generation showed positive results of ₹125.46 lakhs, while aviation reported a loss of ₹44.38 lakhs.

Nine-Month Performance

For the nine-month period ended December 31, 2025, the company reported revenue of ₹15,494.88 lakhs compared to ₹15,807.84 lakhs in the corresponding period of FY25, representing a decline of 2.0%. Net profit for the nine-month period stood at ₹655.67 lakhs, down 27.1% from ₹899.45 lakhs in the previous year.

Balance Sheet Position

The company's financial position shows substantial growth in total segment assets, which increased to ₹84,913.72 lakhs from ₹76,400.27 lakhs in the previous year. The paid-up equity share capital increased significantly to ₹14,299.91 lakhs from ₹9,408.44 lakhs, indicating capital restructuring during the period.

The Board of Directors approved these unaudited financial results at their meeting held on February 10, 2026, following review by the audit committee and limited review by statutory auditors DGMS & Co.

Arihant Capital Markets Limited has filed a disclosure under Regulation 29(2) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, regarding the disposal of shares in Davangere Sugar Company Limited. The transaction was completed on January 28, 2026, through open market sales.

Transaction Details

The share disposal transaction involved significant changes in Arihant Capital's holding pattern in Davangere Sugar Company. The company sold shares carrying voting rights through open market transactions, reducing its overall stake in the target company.

Shareholding Pattern Changes

The disposal resulted in a notable reduction in Arihant Capital's ownership percentage in Davangere Sugar Company. The company's shareholding position changed significantly following the completion of the transaction.

Company Information

Davangere Sugar Company Limited's shares are listed on both the National Stock Exchange of India Limited and Bombay Stock Exchange of India Limited. The company's total equity share capital remains unchanged at 1,42,99,90,798 equity shares of Rs. 1/- each before and after the transaction.

Regulatory Compliance

Arihant Capital Markets confirmed that it does not belong to the promoter or promoter group of Davangere Sugar Company. The disclosure was signed by Mahesh Pancholi, Company Secretary (M. No. F-7143), and filed with the relevant stock exchanges and the target company as required under SEBI regulations.

The transaction represents a strategic reduction in Arihant Capital's investment position in the sugar company, while maintaining compliance with all applicable disclosure requirements under securities regulations.