Dhampur Bio Organics Ltd - Case of price anomaly

Dhampur Bio Organics Ltd. was demerged from Dhampur Sugar Mills Ltd in 2021. DSML has been almost equally split between DSML and DBOL for succession planning. Shareholders have been given 1 share of DBOL for every share held in DSML.

Comparing capacities at the two companies:
Dhampur Bio:
Crushing - 22,000 TPD
Refined sugar - 2,000 TPD
Distillery - 250 KL/D (100KLD commissioned in Jan 2022 and stabilized at end of Q1.
Co-gen - 95 MW
Country liquor - 8,000 cases per day

Dhampur Sugar
Crushing - 23,500 TPD
Refined sugar - 2,500 TPD
Distillery - 250 KL/D ( planned additional 130 KLPD)
Co-gen - 121 MW
Country liquor - 14,000 cases per day
Chemicals - 140 TPD

There is not much difference in the two companies. In fact the high margin Distillery (ethanol) is of same capacity.
Since DBOL has 3 plants, raw material risk is lesser due to different catchment areas. And can easily expand crushing capacity going forward.

All in all, valuation of DBOL should be at least 85% of DSML - i.e price of DBOL should be 200 but current price is 160. clear case of price anomaly.

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