1. At a Glance
Bannari Amman Sugars is a Tamil Nadu-based sugar and distillery behemoth with interests in co-gen power, granite, and even windmills. Despite scale and diversification, it’s stuck in a low-growth syrup with ROE under 7%, P/E above 45, and sales flatter than soda left out overnight.
2. Introduction with Hook
Imagine being India’s OG sugar daddy. You’ve got mills in two states, distilleries fermenting away, and windmills doing the Lord’s renewable work. But somehow, your revenue curve still looks like a cane bent under its own weight. Bannari Amman Sugars is that uncle in the agro-sector who’s got the factory, the machinery, the land—and still keeps whispering, “Beta, margin kam hai.”
- Installed cane crushing capacity: 23,700 TCD across 5 units
- P/E Ratio: 46x — higher than Balrampur Chini despite lower return metrics
- 3-Year Sales CAGR: -4% — yes, negative
- ROCE: 8.68% | ROE: 6.04% — let’s call them “modest” and move on
3. Business Model (WTF Do They Even Do?)
Bannari is a vertically integrated sugarcane-to-ethanol-to-electricity player with a side quest in granite.
Core Segments:
- Sugar (84% of revenue): Sold as retail sugar and bulk molasses, bagasse, fertilizer
- Distillery: Ethanol and industrial alcohol—booming thanks to India’s EBP (ethanol blending program)
- Cogeneration: They burn bagasse and make power for internal use & grid sale
- Windmills & Granite: Diversification or a subplot? You decide.
In short: It crushes cane, ferments ethanol, spins turbines, and maybe polishes a granite tile or two.
4. Financials Overview
Here’s where it gets bittersweet.
| Year | Sales (₹ Cr) | OPM % | Net Profit (₹ Cr) | EPS (₹) | ROCE % | Debt (₹ Cr) |
|---|---|---|---|---|---|---|
| FY22 | 1,998 | 11% | 80 | 63.78 | 7% | 961 |
| FY23 | 2,526 | 12% | 143 | 114.35 | 12% | 581 |
| FY24 | 2,220 | 14% | 152 | 121.45 | 12% | 486 |
| FY25 | 1,793 | 12% | 105 | 83.47 | 9% | 150 |
Observations:
- Sales declined in FY25 despite robust ethanol demand
- Operating profits consistent, but scale has shrunk
- Debt down sharply from ₹961 Cr in FY22 to ₹150 Cr in FY25
- Margins are stable, but not sexy
5. Valuation
With a P/E of 46, Bannari is trading at a serious premium to sugar peers (Balrampur Chini ~29x, Dalmia Bharat Sugar ~8x).
Fair Value Range (based on blended P/E of 20–28x):
- FY25 EPS = ₹83.47
- FV Range = ₹1,670 – ₹2,340
Current Price: ₹3,784
Verdict: Market’s high on ethanol dreams and debt reduction—but it’s priced to perfection.
6. What’s Cooking – News, Triggers, Drama
- Distillery Expansion Payoff: More ethanol = more EBITDA, especially with OMC demand
- Demand Notice from Tamil Nadu Discom: ₹8.69 Cr claim. Ouch.
- Strike at Sugar Factory: Because obviously nothing screams “summer” like a local lockout
- New Biz Authorised: Company amended MOA to explore M-sand (manufactured sand) and fertilizers — from sugar to soil, literally.
7. Balance Sheet
| Particulars (₹ Cr) | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|
| Equity Capital | 13 | 13 | 13 | 13 |
| Reserves | 1,411 | 1,539 | 1,676 | 1,766 |
| Borrowings | 961 | 581 | 486 | 150 |
| Fixed Assets | 1,049 | 1,078 | 1,071 | 1,189 |
| CWIP | 61 | 22 | 112 | 11 |
| Total Assets | 2,569 | 2,359 | 2,435 | 2,226 |
Takeaways:
- Almost debt-free now
- Asset-light phase incoming?
- CWIP fluctuates but manageable
8. Cash Flow – Sab Number Game Hai
| Cash Flow (₹ Cr) | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|
| Operating Activity | 33 | 502 | 274 | 430 |
| Investing Activity | -75 | -57 | -130 | -65 |
| Financing Activity | 42 | -443 | -144 | -369 |
| Net Cash Flow | 0 | 3 | 1 | -5 |
Translation:
- Free cash flow finally positive
- Debt repayments dominated FY23–25
- Net cash position could improve further if capex slows
9. Ratios – Sexy or Stressy?
| Metric | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|
| ROCE (%) | 7 | 12 | 12 | 9 |
| ROE (%) | 6.04 | 6.6 | 7.65 | 6.04 |
| Inventory Days | 255 | 205 | 247 | 274 |
| Cash Conversion Cycle | 296 | 209 | 249 | 260 |
| Debtor Days | 63 | 20 | 22 | 14 |
Conclusion:
ROEs are… meh. But working capital improving. CCC still sugar industry-level crazy.
10. P&L Breakdown – Show Me the Money
| Metric (₹ Cr) | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|
| Revenue | 1,998 | 2,526 | 2,220 | 1,793 |
| Operating Profit | 218 | 304 | 306 | 210 |
| Net Profit | 80 | 143 | 152 | 105 |
| OPM (%) | 11% | 12% | 14% | 12% |
| EPS (₹) | 63.8 | 114.4 | 121.4 | 83.5 |
FY24 was the peak. FY25 saw compression despite decent margins — volumes dropped, ethanol may have capped.
11. Peer Comparison
| Company | P/E | ROCE % | Sales FY25 (₹ Cr) | PAT FY25 (₹ Cr) | OPM % | P/BV |
|---|---|---|---|---|---|---|
| Bannari Amman | 46 | 9 | 1,793 | 105 | 12% | 2.67 |
| Balrampur Chini | 29 | 11 | 5,415 | 437 | 13% | 3.29 |
| Dalmia Bharat Sugar | 8.4 | 9.4 | 3,746 | 384 | 12.5% | 0.99 |
| Triveni Engg | 33 | 8.6 | 5,689 | 238 | 8.4% | 2.55 |
Bannari is the most expensive in valuation, but not the best on margin or return.
12. Miscellaneous – Shareholding, Promoters
- Promoter Holding: 58.69% (stable)
- FII + DII holding: <0.5% — totally retail driven
- No. of Shareholders: ~7,800 — sticky retail base
- Dividend Payout: ~15% of profits — conservative
No dilution, no drama—just slow growth and steady hands.
13. EduInvesting Verdict™
Bannari Amman Sugars is what happens when you have all the right assets but a sector stuck in cyclical molasses. The company has managed to cut debt dramatically, maintain profits, and ride the ethanol wave — but without strong growth in top-line or ROE, it’s hard to justify a P/E of 46. With a fair value range of ₹1,670–₹2,340, it’s currently priced like the next sugar-tech startup.
Still, if ethanol ramps, M-sand picks up, and the sugar cycle turns sweet — don’t count it out. Just don’t bet your chai on it yet.
Metadata
– Written by EduInvesting Research Team | 18 July 2025
– Tags: Bannari Amman Sugars, Sugar Stocks, Ethanol India, Agro Stocks, Debt Reduction, Tamil Nadu Companies, EduInvesting Premium
