1. At a Glance – Blink and You’ll Miss the Irony
Andhra Sugars Ltd is a ₹1,000 Cr market-cap company selling everything from sugar to rocket propellants, yet somehow delivering ROCE of just 3.54%. The stock is chilling at ₹74, down ~17% YoY, trading at 0.61x book value, which screams “cheap” until you notice the returns scream “why bother?”.
Q3 FY26 numbers look headline-grabbing: Revenue up 23.6% YoY, PAT up 7,082% YoY (because last year’s base was basically coma-level), and EPS at ₹1.65. Debt? Almost extinct. Dividend? Still alive. Business complexity? Olympic-level.
But here’s the real question:
👉 If a company makes sugar, aspirin, caustic soda, sulphuric acid, and ISRO propellants… why is capital still earning like a fixed deposit?
Stay. This gets interesting.
2. Introduction – A 1947 Company With a 2026 Identity Crisis
Founded in 1947, Andhra Sugars is older than Indian independence, which already makes it a corporate fossil with stories to tell. Over decades, instead of focusing on one business, management decided to collect industries like Pokémon: sugar, chlor-alkali, industrial chemicals, pharma intermediates, soaps, power, and space-grade propellants.
On paper, this diversification sounds brilliant. In practice, it has produced mediocre long-term returns, volatile profits, and a balance sheet that looks healthy but underutilized.
The stock market hates confusion. Andhra Sugars has plenty of it.
Yet, every few years, something clicks—caustic soda cycle turns, aspirin exports revive, or ISRO places fresh orders—and suddenly profits spike. FY25–TTM is one such phase.
The big debate is simple:
👉 Is Andhra Sugars a cyclical opportunity… or a permanent capital efficiency disaster?
3. Business Model – WTF Do They Even Do?
Let’s decode this chemical-khichdi business.
Chlor-Alkali (37%
of FY24 revenue)
This is the boring but bulky business—caustic soda, caustic potash, and co-products. Realizations crashed post-FY22, dragging segment revenue down 6% over two years. When pricing is good, profits pop. When pricing isn’t, this segment sulks silently.
Industrial Chemicals (36%)
This is where things get spicy. Sulphuric acid, industrial alcohol, chlorine, and solid & liquid propellants supplied to ISRO. Yes, rocket fuel. This segment grew 4% between FY22–FY24, mainly due to higher ISRO offtake. Government client = stable volumes, zero glamour, slow money.
Soap & Oleochemicals (13%)
Handled via subsidiary Jocil Ltd, this segment has been punched in the face by margin pressure, declining 26% in revenue over two years. FMCG-style business with chemical-style volatility—worst of both worlds.
Sugar (8%)
Classic Indian sugar story: cyclical, politically controlled, margin-sensitive. Revenue grew 24%, helped by better realizations and higher production—but two units are shut due to cane shortage, which tells you how fragile this business is.
Power & Others (6%)
Wind power, fertilizers, bulk drugs, edible oils—basically “miscellaneous drawer”.
Investor question:
👉 Is this diversification… or distraction?
4. Financials Overview –
