1. At a Glance

Andhra Sugars Ltd (NSE: ANDHRSUGAR) is like that veteran Bollywood actor who started with black-and-white films (1947 incorporation) but now randomly appears in web series. Once a simple sugar maker, it now sells sugar, alcohol, aspirin, chlor-alkali, sulphuric acid, soaps, and even rocket propellants to ISRO. Market cap ₹1,047 Cr, revenue ₹2,139 Cr, PAT ₹54 Cr, but ROE a miserable 2.7%. Basically, a ₹2,000 Cr sales machine running on government contracts and nostalgia.

2. Introduction

Founded right after Independence, Andhra Sugars was supposed to be a symbol of self-reliance. But somewhere along the way, it transformed from a sugar mill to a full-blown chemicals bazaar.

One day it’s crushing cane, next day it’s making aspirin for Pfizer, third day it’s supplying solid propellants to ISRO. The product mix looks like a JEE syllabus – chemistry, physics, biology, everything.

The business model is complex:

• 37% chlor-alkali (caustic soda, potash – boring but stable).
• 36% industrial chemicals (acids, propellants – spicy stuff).
• 13% soap/oleochemicals (through Jocil Ltd – profits down, lather also down).
• 8% sugar (back to roots).
• 6% power & others (windmills, fertilizers, edible oils, solar – basically, side hustle).

Yet despite diversification, margins are thin, ROCE is 3.7%, and stock trades at 0.66x book value. The company is debt-free (₹13 Cr negligible), but profits are eroding faster than aspirin dissolves in water.

So is Andhra Sugars a diversified genius or just a confused uncle with too many hobbies?

3. Business Model – WTF Do They Even Do?

• Sugar: 3 units, 16,000 TCD capacity, but two (Tanuku, Bhimadole) are suspended due to cane shortage. FY24 cane crushed 3.1 lakh MT, sugar produced 29,440 MT, recovery 9.42%. Basically, sugar is now the side character.
• Chemicals: Big daddy segment. Caustic soda 600 TPD, sulphuric acid 500 TPD, salicylic acid 2,640 TPA. New sulphuric acid plant cost ₹118 Cr – self-funded. Respect.
• Alcohol: Industrial alcohol, ethanol – but volumes are small compared to Balrampur/Triveni.
• Soap: Jocil Ltd subsidiary making fatty acids, glycerine, soaps. Declining revenues (-26% in two years). Probably losing to Patanjali’s Dant Kanti army.
• Propellants: Supplies solid/liquid propellants to ISRO. Now that’s the bragging rights – “Our chemicals go to space.”
• Power: 33 MW captive thermal, 2.5 MW solar. Mostly to keep own plants lit.

In short: sugar is nostalgia, chemicals are survival, propellants are flex.

4. Financials Overview

Commentary: Q1 FY26 was a sweet relief – margins improved, PAT jumped. But one good quarter doesn’t hide long-term decline in profitability.

5. Valuation – Fair Value Range Only

• P/E Method:
  EPS (TTM) = ₹2.55
  Industry P/E (chemicals) = 22
  Fair Value = ₹55 – ₹75
• EV/EBITDA Method:
  EV = ₹1,004 Cr
  EBITDA (TTM) ≈ ₹166 Cr
  EV/EBITDA = ~6
  Fair Range = ₹80 – ₹110
• DCF (rough cut):
  Assume 5% sales growth, 6% margins, discount 12%. Fair value = ₹70 – ₹100.

👉 Fair Value Range: ₹55 – ₹100
(CMP ₹77.5, so sits mid-range)

Disclaimer: Educational purposes only, not investment advice.

6. What’s Cooking – News, Triggers, Drama

• Capex Spree: New sulphuric acid plant (₹118 Cr), salicylic acid plant (₹36 Cr). Funded from internal accruals – no debt.
• Sodium Hypochlorite