Dwarikesh Sugar Industries expects a 15 per cent increase in production leading to higher revenues during the forthcoming crushing season, a senior company official has said.

“Available indications show that we will be able to crush 15 per cent more sugarcane during the coming season and there would be a corresponding increase in production and thus our revenues too are expected to go up as compared to last year,” Vijay S Banka, Dwarikesh Director and Chief Financial Officer, told BusinessLine .

“Last season, our recovery rates were one of the best in the country. Such recovery numbers are rarely reported outside Maharashtra. Our average recovery rate was 11.78 per cent, whereas the industry average in Uttar Pradesh, where our plants are located, was 10.6 per cent,” he said.

If the weather holds, he said, their plants — located in Bijnor and Bareilly (UP) — would better the recovery rates. If not, they would at least sustain similar rates, Banka added.

The company began the year with a bang when it posted an 88 per cent increase in net profit in the first quarter, ended June 30. Its profits for the quarter stood at ₹59.3 crore against ₹31.5 crore recorded during the corresponding period last year.

The firm’s total and net revenues increased by 70 per cent from ₹306.1 crore and ₹289.7 crore in the first quarter of fiscal 2017 to ₹522 crore and ₹493.6 crore, respectively, in the first quarter of fiscal 2018.

Better prospects seen The year is expected to be productive for the sugar industry as there has been 9.44 per cent increase in the area under cane cultivation in 2017 kharif, as compared to the previous season. Sugarcane acreage is so far estimated to be close 50 lakh hectares. The government has projected a sugarcane production target of 355 million tonnes, as compared to 306.72 million tonnes in 2016-17.

Dwarikesh, which has a long-standing power purchase agreement with the UP State Electricity Board, is expecting better revenues from the power segment as well — as the crushing starts early this year.

“Normally, we commence crushing in the second week of November, But, this year, it would start the week after Diwali, which is in the third week of October,” he said. Last year, the company produced 87 MW of power, of which 56 MW was sold to the electricity board.

According to Banka, sugar prices would hold firm during the year as the sugarcane yield was projected to be good.

“We expect total sugar production in the country to be around 25 million tonnes. With a carrying stock of 4 million tonnes, the total available sugar would be around 29 million tonnes,” he said.