20% Upper Circuit: Ethanol Stock Skyrockets After Turning Profitable in Q3

Synopsis: Dhampur Bio Organics jumped sharply after reporting a sharp turnaround to profit in Q3 FY26, where it reported a net profit of Rs 17 crore, a sharp turnaround from a loss of Rs 7 crore a year earlier.

The shares of this company, engaged in the manufactures sugar, chemicals, ethanol, Co-generation of power and other allied products is in focus after it reported a stellar financial performance, and it is also engaging with a Swiss unit for collaboration on mycoprotein. In this article, we will dive more into the details of it.

With a market capitalisation of Rs 639 crore, the shares of Dhampur Bio Organics Ltd are currently trading at Rs 96.27 per share (upper circuit), up 20 percent from its previous day’s closing price of Rs 80.23 per share. In the last one year, the stock has corrected by over 5 percent, underperforming NIFTY 50’s return of 8 percent.

Q3 Highlights

The revenue from operations for Dhampur Bio Organics stands at Rs 486 crores in Q3 FY26 compared to Q3 FY25 revenue of Rs 464 crores, up by 5 per cent YoY. However, on a QoQ basis, it reported a decline of 13 percent from Rs 558 crore. 

Coming to its sales mix, the company derived Rs 376.44 crore (77 percent) of its revenue from Sugar, which saw a 21 percent YoY decline, followed by Rs 83.02 crore (17 percent) from Biofuel & Spirits, which saw a 9.5 percent YoY decline and Rs 28.94 crore (6 percent) from Country Liquor, which saw a slight 0.7 percent YoY growth.

Despite a decline and a muted performance in all the segments, the company saw a revenue growth because of slightly higher realisation. It sold 0.73 lakh tons of sugar in Q3 FY26, 18 percent lower than 0.89 lakh tons in Q3 FY25. However, Average Realisations per tonne increased by 7 percent to Rs 41,316 from Rs 38,714.

Also, operating profit (EBITDA) stood at Rs 43 crores in Q3 FY26 compared to Q3 FY25 EBITDA of Rs 16 crores, up by a staggering 169 per cent YoY. Additionally, on a QoQ basis, it reported a robust growth as compared to a negative EBITDA of Rs 8 crore. Also, its operating margins surged by 600 bps to 9 percent in Q3 FY26 from just 3 percent in Q3 FY25.

Coming down to its profitability, the company’s net profit stood at Rs 17 crore in Q3 FY26, a significant turnaround in profitability as compared to a loss of Rs 7 crore in Q3 FY25. Additionally, on a QoQ basis, it reported a loss of Rs 16 crore.

Other Highlights

Dhampur Bio Organics also informed that its Board has taken note of a non-binding term sheet with Planetary SA of Switzerland.  As part of the binding sheet, the two parties are looking to explore a collaboration for manufacturing and selling mycoprotein in India, which is essentially a protein-rich meat substitute, using sugar and sugar by-products as feedstock. 

The company emphasised that this is still an early-stage discussion and nothing has been finalised, and that formal agreements would need to be signed and certain conditions fulfilled before proceeding further. 

Dhampur Bio Organics Limited (DBO) is a leading cane processing company with experience and pedigree extending across 9 decades. Utilising its advanced and integrated manufacturing setups, DBO capitalises on the favourable trends in the sugar and broader agricultural economy. 

The company is focused on repositioning itself as a value-added sugar manufacturer on one hand and a bio-energy company on the other. The three manufacturing facilities, in Asmoli, Mansurpur and Meerganj, are strategically located in proximity to each other, enabling better utilisation of resources and increased synergies in production and management. These facilities have a total of 29,500 TCD of sugarcane crushing capacity and produce 80 lakh potable liquor cases per year.

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