Arihant Capital buys over 2 cr shares in Davangere Sugar, stock Zooms up nearly 10%

DAVANGERE SUGAR (BSE: 543267 NSE: DAVANGERE) witnessed extremely strong upmove in yesterday’s session backed with good volumes, the stock price rose by nearly 10%. Arihant Capital one of the leading broking houses did buy over 2 cr shares from the open market in Davangere Sugar. 

Recently, Promoter did raise funds of nearly Rs 150 cr, to cut debt and boost profitability as well as improve the Balance sheet of the company. Promoter infused funds worth 44 cr in to the company ad also bought nearly 10 lk shares from the open market. This infuses confidence among the investor community. Long term growth story of the company remains intact. 

Growth triggers and fundamentals

• Ethanol capacity expansion from 65 KLPD to 85 KLPD in FY25 and further to 110 KLPD
• New 35 TPD CO₂ recovery plant creating an additional revenue stream
• Diversification into broken rice and maize procurement with scope for grain trading
• Cane crushing target of 5 lakh MT annually supported by farmer incentives and advanced agronomy programs
• Additional adjacent land available for future expansion
• Significant debt reduction, improving profitability and balance sheet strength
• Operational efficiency improvements through mechanised harvesting and transport subsidies

Ethanol Growth Outlook

• FY26 focus: Ethanol production from maize & damaged grains till October
• Benefiting from E20 blending push, soft loans & state incentives
• Positioned to scale with FFV-led ethanol demand surge

Strategic Focus on Ethanol & Maize Procurement

In alignment with national policy encouraging ethanol production from maize, DSCL is actively scaling up maize procurement from multiple regions. This initiative supports the Government of India’s ethanol blending goals and is strengthened by the establishment of a National Coordinating Agency through NAFED, enhancing farmer-to-factory supply chains.

Strengthening Farmer Partnerships

To secure raw material availability and support farmer welfare, DSCL has introduced several key initiatives:

Subsidised sugarcane seed and input distribution

Plantation subsidies to incentivize acreage expansion

Target of cultivating 15,000 acres of sugarcane in the upcoming season

Additionally, the company is expanding sugarcane cultivation into traditionally non-cane growing areas, bringing new communities into the value chain. Farmers are supported with timely payments, access to credit, and training in modern agricultural practices.

Robust Infrastructure Enabling Scale

DSCL operates a fully integrated facility in Kukkuwada, Karnataka, featuring:

6,000 TCD sugar crushing capacity

65 KLPD ethanol production unit

24.45 MW cogeneration power plant

165 acres of land housing five warehouses with 60,000 tonnes of storage capacity

This infrastructure ensures consistent supply, operational resilience, and the ability to meet growing market demand.

Commitment to Sustainability and Regional Development

DSCL promotes a Zero Waste approach and actively invests in Green Energy initiatives. Beyond its core business, the company contributes to regional growth by generating employment and uplifting rural economies. Its integrated, sustainability-driven model delivers long-term value for all stakeholders.

About Davangere Sugar Company Limited (DSCL)

Established in 1970, Davangere Sugar Company Limited (DSCL) is today a leading player in the sugar industry. The Karnataka-based company has evolved from a traditional sugar manufacturer into a diversified enterprise contributing to India’s green energy goals. With a legacy spanning over five decades, DSCL has diversified operations encompassing sugar manufacturing, ethanol production, and co-generation of power. The company’s efforts in ethanol production and cogeneration reflect its commitment to sustainable development and circular economy practices.