Dhampur Sugar Mills Approves ₹200 Million Share Buyback After Strong Q4 Profit, Revenue at ₹8.1 Billion

Dhampur Sugar Mills Ltd has announced a share buyback plan with a total consideration not exceeding ₹200 million, following board approval on May 16, 2025. This move comes on the heels of a robust March-quarter performance, with consolidated revenue from operations at ₹8.1 billion and net profit at ₹490.1 million. The buyback underscores the company’s commitment to enhancing shareholder value amid a challenging environment for India’s sugar industry.

 

Buyback Plan Approved:

The Board of Directors has approved a buyback of shares worth up to ₹200 million. The buyback is aimed at optimizing the capital structure, providing liquidity to shareholders, and signaling management’s confidence in the company’s future prospects.

 

Strong March Quarter Performance:

Buyback Mechanism:

While specific details on the buyback price and method are expected in the forthcoming offer document, previous buybacks by the company have been conducted via the tender offer route using the stock exchange mechanism. The buyback is expected to enhance earnings per share (EPS) and return on equity for continuing shareholders.

 

Strategic Rationale:

The buyback is part of Dhampur Sugar’s broader capital allocation strategy, aimed at rewarding shareholders and reinforcing market confidence. It comes as Indian sugar mills face margin pressures from lower sugar prices and higher cane procurement costs, making capital discipline and shareholder returns a priority.

 

Industry Context:

The Indian sugar sector continues to grapple with price volatility and payment delays to cane farmers, but Dhampur Sugar’s strong balance sheet and recurring profits position it well for sustainable growth.

 

Insight

Dhampur Sugar Mills’ decision to initiate a ₹200 million share buyback following a robust Q4 highlights its financial strength and shareholder-friendly approach. The buyback, combined with solid quarterly results, is likely to support the stock’s valuation and investor sentiment amid ongoing sector volatility. Management’s focus on operational efficiency and prudent capital allocation continues to differentiate Dhampur Sugar as a resilient leader in the Indian sugar industry.

 

Source: Dhampur Sugar Mills Investors’ Information, Economic Times, MarketScreener, Buyback Updates - X