Hi,
It’s mainly because of the reverse merger of Ujjivan Small Finance Bank (SFB) and Equitas SFB.The reverse merger, in this case, brings down the promoter shareholding to zero as post merger.

A good news for the company.

Q1 and Q2 numbers of all sugar companies will be bad. However from Q3 onwards it is expected to improve if the Govt. allows ethanol from sugarcane or sugar export ban is lifted – if not allowed then mills will reduce crushing as all off them are sitting on huge sugar stocks. Distilleries will run on maize at very low margins. All in all industry will face challenges due to Govt. policies which will most likely continue to be adverse as the Govt. is not able understand how to regulate this industry – the huge increase in farmer dues says it all !!

Dhampur Bio – while short term it could underperform but medium term it will outperform peers only to catch up to their valuation – that too when it reduces stock levels and starts grain based ethanol. While financial strategy is poor – which reflects in the rating downgrade for increasing stock level – long term rating downgrade for short term reasons – unheard of. CFO should do a better job or replaced. the increase in operational margins (increase in recovery rate) will lead to better financial performance / turnaround.

Long term – sugar companies using cash for buyback / dividend should be the only company to invest (like Balrampur, Dhampur sugar, Triveni). Companies going for expansion should be totally avoided.

PS – if Government policy on ethanol, FRP / SAP, exports become better and stable then the industry and grow multiple times from here like it has happened in Brazil.

Last year profit was 81 crore. Trade receivables over 6 months is 38 crore and above 1 year is 18 crore. I would be concerned about my business model if I were the retailer selling on credit.