Davangere Sugar posts Rs 6.33 crore Q2 standalone loss

Davangere Sugar Company Limited reported a Rs 6.33 crore standalone net loss for the quarter ended 30 September 2026, versus a Rs 2.63 crore profit a year earlier, despite revenue from operations rising to Rs 71.61 crore from Rs 48.19 crore. Finance cost increased to Rs 17.55 crore and exceeded the Rs 11.72 crore combined segment result before interest and tax.

What were Davangere Sugar's Q2 standalone results?

Davangere Sugar recorded a Rs 6.33 crore net loss in the quarter ended 30 September 2026, reversing from a Rs 2.63 crore net profit in the quarter ended 30 September 2025. The company reported a Rs 5.83 crore loss before tax, compared with a Rs 3.33 crore profit before tax a year earlier. Current tax expense was Rs 37.39 lakh and deferred tax expense was Rs 11.91 lakh.

Revenue from operations increased by Rs 23.42 crore year on year to Rs 71.61 crore in Q2. Other income rose to Rs 2.12 crore from Rs 57.72 lakh, taking total income to Rs 73.73 crore from Rs 48.77 crore. Total expenses rose to Rs 79.56 crore from Rs 45.44 crore, resulting in the pre-tax loss.

For the half year ended 30 September 2026, Davangere Sugar reported revenue from operations of Rs 106.33 crore, compared with Rs 72.26 crore in the corresponding period of 2025. The six-month net result was a Rs 5.39 crore loss, against a Rs 3.93 crore profit in the prior-year period. The filing says the seasonal nature of the industry means quarterly results may not be a true or appropriate reflection of annual profitability.

Why did Davangere Sugar report a loss despite higher revenue?

Davangere Sugar reported finance cost of Rs 17.55 crore in Q2, up from Rs 9.44 crore in the prior-year quarter and Rs 7.19 crore in the quarter ended 30 June 2026. The charge was Rs 5.83 crore higher than the Rs 11.72 crore total segment result before interest and tax, producing a Rs 5.83 crore loss before tax.

Materials consumed rose to Rs 47.23 crore from Rs 6.50 crore a year earlier, while employee benefits expense increased to Rs 2.01 crore from Rs 1.78 crore. Other expenses increased to Rs 5.58 crore from Rs 5.16 crore. The charge for changes in inventories of finished goods and work in progress declined to Rs 2.11 crore from Rs 9.75 crore, while power and fuel expense fell to Rs 1.90 crore from Rs 9.64 crore.

Depreciation and amortisation remained almost unchanged at Rs 3.18 crore in Q2, compared with Rs 3.18 crore a year earlier. For the half year, finance cost rose to Rs 24.74 crore from Rs 16.39 crore, while total segment result before interest declined to Rs 20.19 crore from Rs 21.12 crore. The half-year shortfall after interest led to a Rs 4.55 crore loss before tax, compared with a Rs 5.06 crore profit before tax a year earlier.

Which Davangere Sugar segments contributed to Q2 revenue?

Davangere Sugar's distillery segment was its largest reported contributor in Q2, with revenue of Rs 48.28 crore and segment profit before interest and tax of Rs 11.34 crore. Distillery revenue was Rs 44.03 crore in the quarter ended 30 September 2025, while segment profit was Rs 8.38 crore, showing increases in both measures.

Sugar revenue rose to Rs 22.93 crore from Rs 3.88 crore a year earlier, but sugar segment profit declined to Rs 1.88 crore from Rs 4.98 crore. The filing reported no co-generation revenue in either Q2 period, while the co-generation segment loss widened to Rs 1.23 crore from Rs 83.87 lakh. Aviation reported no revenue in Q2 2026, compared with Rs 28.59 lakh a year earlier.

Other segment revenue was Rs 2.52 crore in Q2, compared with Rs 57.72 lakh in the prior-year quarter. Across the reported segments, the total result before interest and tax was Rs 11.72 crore, down from Rs 12.62 crore despite higher total segment revenue of Rs 73.73 crore versus Rs 48.77 crore. The comparison shows that higher distillery earnings did not offset lower sugar profitability, co-generation losses and the higher interest charge.

What do Davangere Sugar's balance sheet and cash flows show?

Davangere Sugar reported standalone total assets of Rs 1,671.55 crore as at 30 September 2026, compared with Rs 839.35 crore at 31 March 2026. Investments increased to Rs 822.03 crore from Rs 5.39 crore, while property, plant and equipment declined to Rs 330.97 crore from Rs 336.80 crore. Inventories declined to Rs 195.52 crore from Rs 210.45 crore, and trade receivables increased to Rs 61.06 crore from Rs 35.01 crore.

The half-year cash-flow statement listed Rs 817.54 crore for investment in subsidiaries and a total investing cash outflow of Rs 817.16 crore. It also recorded a Rs 824.25 crore financing inflow, including Rs 809.40 crore of proceeds from foreign currency convertible bonds, or FCCB, and Rs 35.00 crore from long-term borrowings. The filing does not provide a further explanation of the FCCB proceeds or the subsidiary investment.

Operating cash flow was an outflow of Rs 25.69 crore for the half year ended 30 September 2026, compared with an outflow of Rs 97.38 crore for the year ended 31 March 2026. Cash and cash equivalents were Rs 5.60 crore at 30 September 2026, down from Rs 6.57 crore at 31 March 2026. Long-term borrowings were Rs 67.50 crore, compared with Rs 32.50 crore at the March year end, while other long-term liabilities were Rs 796.80 crore compared with Rs 53.96 crore.

Were Davangere Sugar's Q2 results audited?

Davangere Sugar's standalone results for the quarter and half year ended 30 September 2026 were unaudited and subject to a limited review by its statutory auditors. The board approved the results on 12 November 2026 after review and recommendation by the audit committee. The auditor stated that nothing had come to its attention indicating that the standalone results contained a material misstatement.

The auditor also stated that a limited review is conducted under Standard on Review Engagement 2410 and provides less assurance than an audit. The results were prepared under Indian Accounting Standard 34, or Ind AS 34, for interim financial reporting. The filing identifies the equity-share face value as Rs 1 per share and reports basic and diluted earnings per share of negative Rs 0.044 for Q2.

Conclusion

Davangere Sugar's Q2 figures show that revenue growth to Rs 71.61 crore and a Rs 11.34 crore distillery segment profit did not cover a Rs 17.55 crore finance cost. The outcome was a Rs 6.33 crore standalone net loss, compared with a Rs 2.63 crore profit a year earlier, while the first half ended with a Rs 5.39 crore loss despite Rs 106.33 crore of revenue from operations.

The next disclosures will be relevant for movements in finance cost, which reached Rs 24.74 crore in the first half, and for the effect of the Rs 809.40 crore FCCB proceeds and Rs 817.54 crore subsidiary-investment entry. Davangere Sugar has also stated that industry seasonality can make a single quarter unrepresentative of annual profitability.