February 6, 2017 / 10:58 AM / a year ago

India's Dwarikesh Sugar expects higher margins in Q4 as prices rise

MUMBAI, Feb 6 (Reuters) - India’s Dwarikesh Sugar Industries Ltd expects its margins to improve in the March quarter as prices of the sweetener rise due to a production shortfall, said a senior company official.

“Monthly average sugar realisation has been rising. The fourth quarter will be better than the third quarter,” Chief Financial Officer Vijay Banka told Reuters on Monday.

Dwarikesh Sugar, which operates mills in the northern state of Uttar Pradesh, is likely to produce 276,000 tonnes of the sweetener in the 2016/17 crop year ending on Sept. 30, up 11.4 percent from a year earlier due to higher availability of sugar cane, he said.

In the third quarter that ended on Dec. 31, 2016, the company’s margins jumped to 25.6 percent from 9.7 percent a year ago due to higher production and as sugar prices rose on expectation of a drop in production in Maharashtra, he said.

Sugar prices have risen 4.4 percent so far in 2017.

The western state of Maharashtra is the country’s second biggest sugar producer after Uttar Pradesh. Its production is expected to drop more than 45 percent in 2016/17. (Reporting by Rajendra Jadhav; Editing by Subhranshu Sahu)

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