Dangote Sugar is a Growth Stock That Investors Cherish

Investors who have not bought Dangote Sugar Refinery (DSR) Plc stocks for keeps will be left scratching their heads later as the company’s future expansion plans will translate to higher earnings.

Of course, since the consumer goods giant is the leading player in the industry with 60 percent of market share in Nigeria and has the biggest sugar refinery in Sub Saharan Africa (SSA) with a capacity of 1.40 million per annum, there is no gain saying it is the one of the most sort after stocks as it continues to magnify shareholders’ earnings.

Interestingly, the company’s target is to deliver 550,000MT/PA of refined sugar by 2024. It is also currently developing Greenfield sites at the Nasarawa Sugar Company Project at Tunga in Nasarawa State, amongst other sites.

The goal of improving overall service to customers led to a rebranding of the 50kg fortified and non-fortified sugar bags, according to analysts at Afrinvest Securities Limited.

“The key customers of DSR include corporates, cubing companies, private label packaging, small-scale businesses, and retailers,” said the analysts.

This strategic expansion has translated into revenue and profit growth and investors have been rewarding the consumer goods giant for its resilience and stellar performance.

Operating profit for the first nine jumped by 12.57 percent to N56.14 billion, from N49.87 billion as at September 2022.

The shares have gained 283.80 percent as of November 13, 2023, outperforming the NGX ASI index gains of 38.25 percent .

Despite the foreign exchange devaluation losses brought on by currency devaluations by the central bank that seeks to stabilise the economy and rising interest expense due to a high interest rate environment, the outlook for DSR remains positive.