DBO returns to Q2 FY27 profit as EBITDA margin reaches 9%

Dhampur Bio Organics Ltd. returned to a reported profit after tax of Rs 26.62 crore in Q2 FY27, against a Rs 15.53 crore loss in Q2 FY26, as revenue net of excise increased 24% to Rs 665.5 crore and EBITDA margin reached 9.02% from 2.41%.

How did DBO return to profit in Q2 FY27?

DBO returned to profit as earnings before interest, tax, depreciation and amortisation, or EBITDA, rose to Rs 60.0 crore in Q2 FY27 from Rs 13.0 crore a year earlier. Revenue net of excise increased by Rs 128.2 crore to Rs 665.5 crore, while EBITDA increased by Rs 47.0 crore. The resulting EBITDA margin rose 661 basis points to 9.02% from 2.41%.

The improvement extended below the operating line. Earnings before interest and tax, or EBIT, reached Rs 47.1 crore from Rs 0.5 crore, and finance cost declined to Rs 7.9 crore from Rs 12.8 crore. Profit before tax moved to Rs 39.2 crore from a loss of Rs 12.2 crore, while reported profit after tax, or PAT, changed from a loss of Rs 15.53 crore to a profit of Rs 26.62 crore.

What does reported Q2 FY27 PAT include?

DBO's reported PAT of Rs 26.62 crore includes continuing and discontinuing operations, while its Q2 revenue is stated for continuing operations. PAT from continuing operations was Rs 26.6 crore, compared with a loss of Rs 8.3 crore in Q2 FY26. The presentation reported no Q2 FY27 PAT from discontinuing operations, against a Rs 7.2 crore loss in the comparable quarter.

The different reporting bases are relevant to reading the turnaround. The Q2 FY27 PAT margin of 4.00% compares with negative 2.89% in Q2 FY26, a 689-basis-point change, and basic earnings per share changed to Rs 4.1 from a loss per share of Rs 2.34. Depreciation and amortisation was Rs 13.0 crore, compared with Rs 12.4 crore, indicating the EBIT increase primarily followed the higher EBITDA rather than lower depreciation.

Which DBO segments drove Q2 FY27 revenue growth?

DBO's country liquor business recorded the fastest Q2 FY27 revenue growth, with revenue net of excise increasing 268.7% to Rs 107.8 crore from Rs 29.2 crore, mainly due to higher volume. Sugar remained the largest business by revenue at Rs 468.7 crore, up 12.7% from Rs 415.9 crore. Biofuel and spirits revenue increased 9.3% to Rs 104.4 crore from Rs 95.5 crore.

Sugar provided the largest EBIT contribution, with EBIT increasing to Rs 47.6 crore from Rs 9.6 crore and margin rising to 10.15% from 2.31%. DBO attributed sugar sales of Rs 468.67 crore to higher sugar selling prices. Biofuel and spirits moved from an EBIT loss of Rs 4.4 crore to EBIT of Rs 5.6 crore, while margin turned to 5.32% from negative 4.64%; DBO cited a higher contribution from grain-based ethanol for sales of Rs 104.42 crore.

How did country liquor profitability compare with revenue growth?

DBO's country liquor revenue growth did not produce a higher EBIT contribution in Q2 FY27. EBIT declined to Rs 3.6 crore from Rs 4.7 crore despite revenue rising by Rs 78.6 crore year on year. The segment overview lists EBIT margin at 3.37% in Q2 FY27, compared with 16.07% in Q2 FY26, a decline of 1,271 basis points.

The presentation contains a difference in its country liquor margin disclosures. Its segment highlights page gives the Q2 FY26 EBIT margin as 11.80%, while the segment overview gives 16.07%; both pages show the Q2 FY27 margin at 3.37%. In either comparison, country liquor's margin was lower despite the segment's revenue rising to Rs 107.81 crore from Rs 29.24 crore.

What do DBO's H1 FY27 figures show?

DBO reported H1 FY27 revenue net of excise of Rs 1,220.4 crore, up 14% from Rs 1,068.9 crore in H1 FY26, while EBITDA increased to Rs 72.3 crore from Rs 26.5 crore. EBITDA margin improved to 5.93% from 2.48%, a 345-basis-point increase. The H1 margin remained below the Q2 FY27 margin of 9.02%.

H1 FY27 reported PAT was Rs 65.02 crore, compared with a loss of Rs 34.90 crore, with PAT margin increasing to 5.33% from negative 3.26%. This total included Rs 50.5 crore PAT from discontinuing operations, compared with a Rs 15.1 crore loss a year earlier. PAT from continuing operations was Rs 14.5 crore, against a loss of Rs 19.8 crore in H1 FY26.

The six-month segment trends differed from the quarterly pattern. Sugar revenue was Rs 871.0 crore, down 1.2% from Rs 871.2 crore, though its EBIT margin rose to 6.08% from 1.78%. Biofuel and spirits revenue declined 17.0% to Rs 185.2 crore but margin turned to 6.57% from negative 1.7%, while country liquor revenue increased 267.9% to Rs 211.2 crore and its EBIT margin declined to 3.35% from 15.73%.

Conclusion

DBO's Q2 FY27 result combined higher revenue, a substantial increase in operating earnings and lower finance cost to move reported PAT from a Rs 15.53 crore loss to Rs 26.62 crore profit. Sugar was the largest revenue and EBIT contributor, biofuel and spirits returned to positive EBIT, and country liquor delivered the fastest revenue growth while recording lower EBIT and margin.

What to watch next is whether the Q2 FY27 margin outcome continues through the rest of FY27, particularly as H1 sugar and biofuel and spirits revenue remained below their prior-year levels at Rs 871.0 crore and Rs 185.2 crore, respectively. DBO disclosed no FY27 financial target in the presentation, while H1 PAT included Rs 50.5 crore from discontinuing operations.