Share Market Update – Davangere Sugar Share Price Target 2025

Davangere Sugar Share Price Target 2025:- Davangere Sugar Company Limited (DSCL), established in 1970 and headquartered in Bengaluru, Karnataka, is a diversified enterprise engaged in sugar manufacturing, ethanol production, and power co-generation. Operating in the agriculturally rich region of Kukkuwada, DSCL has expanded its sugarcane crushing capacity to 4,750 tonnes per day and commissioned a 65 KLPD ethanol plant, aligning with India’s ethanol blending initiatives. Davangere Sugar Share Price on NSE as of 2 May 2025 is 3.80 INR.

Davangere Sugar Ltd: Current Market Overview

• Open: 3.77
• High: 3.83
• Low: 3.73
• Mkt cap: 352.83Cr
• P/E ratio: 3.19
• Div yield: N/A
• 52-wk high: 10.85
• 52-wk low: 3.48

Davangere Sugar Share Price Chart

Davangere Sugar Share Price Target 2025 (Prediction)

Davangere Sugar Shareholding Pattern

• Promoters: 52.32%
• FII: 0%
• DII: 0%
• Public: 47.68%

Key Factors Affecting Davangere Sugar Share Price Growth

Here are five key factors influencing the growth prospects of Davangere Sugar Company Ltd. and its share price target for 2025:

1. Expansion of Ethanol Production Capacity
   The company is investing ₹54 crore to add a 45 KLPD grain-based ethanol unit, enhancing its distillery operations. This expansion aligns with India’s ethanol blending initiatives and is expected to provide a stable revenue stream, reducing dependence on traditional sugar sales.

2. Significant Improvement in Financial Performance
   In Q3 FY2024-25, Davangere Sugar reported a net profit of ₹6.77 crore, marking a 20.68% increase year-over-year. The net profit margin also improved to 9.20%, indicating enhanced operational efficiency and profitability.

3. Robust Infrastructure and Storage Capabilities
   The company’s expansive sugar plant, with a crushing capacity of 6,000 TCD, spans approximately 165 acres and includes five large warehouses capable of storing 60,000 tonnes of sugar. These facilities ensure a seamless supply chain and support large-scale operations.

4. Diversification into Renewable Energy
   Davangere Sugar operates a 24.45-Megawatt co-generation power plant, utilizing by-products from sugar production. This not only contributes to sustainable energy generation but also provides an additional revenue stream, enhancing the company’s financial stability.

5. Strategic Initiatives to Promote Sugarcane Cultivation
   The company plans to increase its sugarcane growing area by 15,000 acres, ensuring a steady supply of raw materials for its expanded operations. This initiative is expected to support higher production volumes and meet the growing demand for sugar and ethanol.

Risks and Challenges for Davangere Sugar Share Price

Here are five key risks and challenges that could impact the share price target of Davangere Sugar Company Ltd. in 2025:

1. High Debt Levels and Weak Debt Coverage
   As of March 31, 2024, Davangere Sugar’s overall gearing ratio stood at 1.71x, indicating a significant reliance on debt financing. The company’s debt coverage indicators have deteriorated, with Total Debt to PBILDT at 6.86x and Total Debt to GCA at 11.78x, reflecting challenges in meeting financial obligations and potential strain on cash flows.

2. Declining Profitability and Rising Interest Costs
   In the quarter ending September 2024, the company reported a 26.6% drop in net sales and an 87.20% increase in interest expenses compared to the previous quarter. This led to a decline in profitability and a negative sales trend, raising concerns about the company’s financial health and operational efficiency.

3. Negative Cash Flows and Reduced Operating Efficiency
   For the fiscal year 2023-24, Davangere Sugar reported net cash flows of ₹-13 million, an improvement from ₹-33 million in the previous year. However, cash flow from operating activities plummeted by 96.9% year-over-year, indicating reduced operational efficiency and potential liquidity challenges.

4. Stock Volatility and Market Underperformance
   The company’s stock has experienced significant volatility, hitting a new 52-week low and declining by 59.12% over the past year. This underperformance compared to broader market indices reflects investor concerns and may impact the company’s ability to attract investment.

5. Overvaluation Relative to Intrinsic Value
   As of April 30, 2025, the intrinsic value of Davangere Sugar Company is estimated at ₹2.07, while the stock is trading at a premium of 82% above this value. This overvaluation suggests that the stock may be overpriced, posing a risk of price correction and potential losses for investors.

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