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.
Please share your views.