Davangere Sugar Q1 FY27 Results (NSE: DAVANGERE)
Signal: Growth decelerated
The read
The key inflection is mix rather than broad-based improvement: distillery revenue grew 49.0% YoY and gross margin expanded 1,908bps as material intensity fell, but EBITDA still declined 1.7% because finance cost rose 3.4% and sugar/co-generation losses widened; dilution makes the trajectory weaker at the per-share level.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹34.72 Cr | 44.2% | -58.9% |
| EBIT | ₹8.47 Cr | -2.4% | |
| Net profit | ₹0.94 Cr | -27.7% | |
| EPS | ₹0.01 | -92.9% | |
| EBIT margin | 33.6% |
P&L walk
Revenue increased 44.2% YoY to ₹3,471.56 lakh, but gross margin expanded on lower material intensity while EBITDA declined 1.7% and finance cost rose 3.4%, leaving PAT down 27.7% at ₹93.84 lakh.
Segments
Distillery drove the group with ₹3,507.66 lakh of revenue and ₹1,583.96 lakh of PBIT, while sugar posted a ₹441.80 lakh loss and co-generation a ₹273.02 lakh loss, both weaker YoY.
Key positives
- Revenue increased 44.2% YoY to ₹3,471.56 lakh, led by distillery revenue growth of 49.0% to ₹3,507.66 lakh.
- Gross margin expanded 1,908bps YoY to 55.4% as materials plus inventory-related costs declined to 44.6% of revenue from 64.3%.
- Employee benefits expense rose only 2.8% YoY to ₹195.20 lakh versus 44.2% revenue growth, supporting the cost structure.
Key concerns
- EBITDA declined 1.7% YoY to ₹11.65 crore and EBITDA margin contracted 150bps to 33.6% despite 44.2% revenue growth.
- Sugar moved from ₹277.56 lakh of segment PBIT in the preceding quarter to a ₹441.80 lakh loss in Q1FY27; co-generation remained loss-making at ₹273.02 lakh.
- Finance cost rose 3.4% YoY to ₹718.92 lakh and 58.9% sequentially, limiting conversion of operating profit into PAT.
- PAT fell 27.7% YoY to ₹93.84 lakh, while EPS fell 92.9% to ₹0.007 because of the substantially larger equity base.
Earnings quality: includes non-operating other income
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