At a Glance
Magadh Sugar is a Bihari powerhouse turning sugarcane into cash, spirits into margins, and molasses into money. It’s not the biggest in the biz, but it’s quietly stacking profits while others get crushed under debt or ethanol dreams. Let’s decode if this stock is worth holding—or just another seasonal sugar rush.
1. 🍬 WTF Do They Even Do?
Magadh Sugar & Energy Ltd is part of the K.K. Birla Group (yes, that Birla family). The company:
- Produces sugar, molasses, denatured alcohol, and power.
- Operates 3 sugar mills and 1 distillery in Bihar.
- Sells excess power to the grid via co-generation.
- Is one of the cleanest mid-sized sugar plays with a relatively focused portfolio.
So yes, it’s not trying to boil the ocean—or ferment it like some of its peers.
2. 💰 Financials – From Bitter Cane to Sweet EPS
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Sales (₹ Cr) | 952 | 995 | 953 | 1,097 | 1,322 |
| Net Profit (₹ Cr) | 27 | 46 | 50 | 116 | 109 |
| EPS (₹) | 19.2 | 32.7 | 35.7 | 82.6 | 77.7 |
| OPM (%) | 12% | 13% | 14% | 19% | 16% |
| ROE (%) | 11% | 12% | 13% | 14% | 13.9% |
📈 Takeaway:
- EPS almost quadrupled in 4 years
- Consistent dividend payout (~18%)
- Operating margins have expanded handsomely
- ROE improved, but still not “juice factory” level—13.9% is respectable for a cyclical
3. 🧮 Valuation – Is It Cheap, Meh, or Crack?
| Metric | Value |
|---|---|
| CMP | ₹665 |
| Book Value | ₹592 |
| P/E | 8.47 |
| P/B | 1.12x |
| Dividend Yield | 1.5% |
| ROCE | 12.7% |
🎯 Fair Value Calculation:
Let’s be conservative.
- EPS (TTM) = ₹77.67
- Assigning a cyclical sugar stock P/E of 7–10
👉 Fair Value Range = ₹544 – ₹777
So at ₹665 — it’s within the fair zone, but definitely not a steal.
4. 🧨 What’s Cooking – Triggers & Drama
- Distillery Expansion? Could be on the cards. Other sugar companies are adding ethanol capacity like it’s an IPL team.
- Cane Price Control: Input cost volatility always looms, but Bihar’s relatively stable policy gives them breathing room.
- Exports/Quota Policy: Any ethanol-blending or sugar export policy tweak impacts stock sentiment.
- KMP Update: Mr. Pankaj Singh appointed as Whole-Time Director in May 2025 — could signal new strategic direction.
5. 🧾 Balance Sheet – How Much Debt, How Many Dreams?
| Item | FY25 |
|---|---|
| Equity Capital | ₹14 Cr |
| Reserves | ₹820 Cr |
| Total Borrowings | ₹707 Cr |
| Net Worth | ₹834 Cr |
| Debt-to-Equity | 0.85x |
🧘 Debt is reasonable, but they’ve added ₹70 Cr more vs FY24. Possibly distillery/capex related. Still very manageable.
6. 💸 Cash Flow – Sab Number Game Hai
| Year | CFO (₹ Cr) | Capex (₹ Cr) | FCF |
|---|---|---|---|
| FY23 | ₹115 | ₹21 | ₹94 Cr |
| FY24 | ₹31 | ₹43 | -₹12 Cr |
| FY25 | ₹139 | ₹150 | -₹11 Cr |
🧾 FY25 looks like heavy capex year, possibly driving future ethanol sales or capacity utilization. Free cash flow negative this year but tolerable if revenue jumps next.
7. 📊 Ratios – Sexy or Stressy?
| Ratio | FY25 |
|---|---|
| ROCE | 12.7% |
| ROE | 13.9% |
| Inventory Days | 282 |
| Cash Conversion Cycle | 263 |
| Interest Coverage | ~5x |
| Promoter Holding | 61.02% (stable) |
📦 Inventory days are long (as usual in sugar), but CCC improved from 323 → 263 days in FY25. Not sexy, but not scary either.
8. 🧾 P&L Breakdown – Show Me the Money
- Operating Profit FY25: ₹211 Cr
- Interest Cost: ₹38 Cr
- Net Profit Margin: 8.2%
- Tax Rate: Steady at 25–26%
No funny business here. Solid, boring profits. Like a sugar mill should be.
9. 👥 Shareholding Shenanigans
| Category | % Holding (Mar 2025) |
|---|---|
| Promoters | 61.02% |
| FIIs | 0.16% |
| DIIs | 0.01% |
| Public | 38.82% |
🫥 FII holding is meh but consistent. No pledging or dilution risk here.
🧠 EduInvesting Verdict™
“Magadh Sugar is like that old-school baniya uncle who doesn’t flex much but earns quietly. Good margins, conservative debt, predictable capex, and strong ROE. If you’re looking for excitement — go elsewhere. If you’re looking for profit — welcome home.”
FV Range: ₹544 – ₹777
📉 Below ₹600 = Sweet Entry
📈 Above ₹770 = Book Profits, Have Rasgulla
✍️ Written by Prashant | 📅 27 June 2025
Tags: sugar stocks, ethanol blending, Bihar sugar mills, Magadh Sugar, FMCG agri stocks, undervalued smallcaps, dividend stocks, ethanol policy India
