Dhampur Bio Organics Limited , a prominent player in the bio-organics sector, recently underwent a search operation conducted by Income Tax officials. The company has confirmed its cooperation with the authorities during the process, providing necessary clarifications as requested.

Details of the Search Operation

According to the company's official statement to the stock exchanges, the search operation was carried out under the Income Tax Act, 1961. The operation took place at both the corporate office and manufacturing units of Dhampur Bio Organics.

Timeline and Company Response

The search operation concluded in the early hours of November 4. Throughout the process, Dhampur Bio Organics demonstrated its commitment to transparency and compliance:

• Company officials cooperated fully with the Income Tax Department
• Necessary clarifications, information, and details were provided as requested
• The company has expressed willingness to provide any further clarifications or information that may be required

Regulatory Compliance

In adherence to regulatory requirements, Dhampur Bio Organics promptly informed the stock exchanges about this development. The disclosure was made under Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Company Overview

Dhampur Bio Organics Limited, with its registered office in Sambhal, Uttar Pradesh, is known for its operations in the bio-organics sector.

While the specific reasons for the search operation have not been disclosed, it is common for regulatory bodies to conduct such operations as part of their oversight responsibilities. Investors and stakeholders are advised to monitor further communications from the company for any additional information or developments related to this matter.

Dhampur Bio Organics Limited , a leading sugar and ethanol producer, reported a significant loss in the first quarter, despite a substantial increase in revenue. The company's financial results reflect the challenges faced in the sugar industry, particularly in Uttar Pradesh, but management remains optimistic about future prospects.

Financial Performance

The company reported a loss after tax of Rs 19.37 crore, a stark contrast to the profit of Rs 1.11 crore in the same quarter last year. However, revenue from operations saw a notable increase of 28.75%, reaching Rs 821.00 crore compared to Rs 638.00 crore in the previous year's quarter.

Segment-wise Performance

Sugar Segment

• Revenue increased by 22% to Rs 523.49 crore
• Sugar sales volume remained stable at 95,505 tons
• Average realization improved to Rs 40.84 per kg from Rs 39.15 per kg

Ethanol and Spirits Segment

• Revenue surged by 84% to Rs 127.66 crore
• Ethanol production increased to 21.67 million liters from 13.70 million liters
• Ethanol sales volume grew by 89% to 19.33 million bulk liters

Country Liquor Segment

• Gross revenue increased by 51% to Rs 286.34 crore
• Net revenue (after excise) grew to Rs 28.18 crore from Rs 19.13 crore
• EBIT improved to Rs 4.33 crore from Rs 2.51 crore

Operational Challenges

The company faced significant operational challenges, particularly in sugar recovery:

• Sugar recovery declined to 9.55% from 10.48% in the previous year
• Gross sugar recovery for the season stood at 10.43% versus 11.46% last year
• The decline was attributed to red rot infestation and pest issues affecting two factories in West Central UP

Strategic Initiatives

Despite the challenges, Dhampur Bio Organics has taken several strategic steps:

1. Completed conversion of a 100 KLPD molasses-based distillery to dual-feed capability
2. Increased focus on cane development and pest management activities
3. Commenced production of UPML (Uttar Pradesh Medium Liquor)
4. Repaid long-term loans of Rs 15.00 crore during the quarter

Management Outlook

Gautam Goel, Managing Director & CEO, expressed optimism about the upcoming sugar season:

"Going forward, we do believe the cane development and pest management activities that we put into place more aggressively should help us reverse this trend. All our other rationalization efforts with regards to ethanol, dual feed, have now just about come on stream in June. We hope this will continue to help give us better performances especially in Q3-Q4."

Industry Outlook

The sugar industry in India is facing mixed prospects:

• ISMA estimates total sugar output for the 2024-25 season at 29.90 million tons
• Domestic demand is estimated at 28.00 million tons
• The upcoming 2025-26 sugar season is expected to see increased production of 34-35 million tons
• Global sugar production is projected to reach 189.30 million tons in 2025-26

As Dhampur Bio Organics navigates through these challenging times, the management's focus on operational efficiencies, diversification into ethanol and country liquor, and ongoing cane development initiatives may help in improving the company's performance in the coming quarters.