At a Glance
Magadh Sugar is a Bihari powerhouse turning sugarcane into cash, spirits into margins, and molasses into money. Itās not the biggest in the biz, but itās quietly stacking profits while others get crushed under debt or ethanol dreams. Letās decode if this stock is worth holdingāor just another seasonal sugar rush.
1. š¬ WTF Do They Even Do?
Magadh Sugar & Energy Ltd is part of theK.K. Birla Group(yes,thatBirla family). The company:
- Producessugar,molasses,denatured alcohol, andpower.
- Operates3 sugar millsand1 distilleryin 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, itās not trying to boil the oceanāor ferment it like some of its peers.
2. š°
Financials ā From Bitter Cane to Sweet EPS
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Sales (ā¹ Cr) | 952 | 995 | 953 | 1,097 | 1,322 |
| Net Profit (ā¹ Cr) | 27 | 46 | 50 | 116 | 109 |
| EPS (ā¹) | 19.2 | 32.7 | 35.7 | 82.6 | 77.7 |
| OPM (%) | 12% | 13% | 14% | 19% | 16% |
| ROE (%) | 11% | 12% | 13% | 14% | 13.9% |
šTakeaway:
- EPS almostquadrupled in 4 years
- Consistent dividend payout(~18%)
- Operating margins have expanded handsomely
- ROE improved, but still not ājuice factoryā levelā13.9% is respectable for a cyclical
3. š§® Valuation ā Is It Cheap, Meh, or Crack?
| Metric | Value |
|---|---|
| CMP | ā¹665 |
| Book Value | ā¹592 |
| P/E | 8.47 |
| P/B | 1.12x |
| Dividend Yield | 1.5% |
| ROCE | 12.7% |
šÆFair Value Calculation:
Letās be conservative.
- EPS (TTM) = ā¹77.67
- Assigning a cyclical sugar stock P/E of7ā10
šFair Value Range = ā¹544 ā ā¹777
So at ā¹665 ā itāswithin the fair zone, but
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