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Check Before You Invest : Bannari Amman Sugars Ltd

BSE: 500041 NSE: BANARISUG ISIN: INE459A01010
  |   Sector:  Agriculture & Allied activities   |   Industry:  Sugar

Snapshot

Q.1 Which industry/sub-sector does Bannari Amman Sugars Ltd belong to?
Bannari Amman Sugars Ltd belongs to the Agriculture & Allied activities sector, operating specifically within the Sugar segment.
Q.2 Is Bannari Amman Sugars Ltd a good quality company?
Bannari Amman Sugars Ltd is a weak quality company, based on a inconsistent multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Bannari Amman Sugars Ltd undervalued or overvalued?
Bannari Amman Sugars Ltd appears Somewhat overvalued, as its key valuation ratios are higher than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 31.98 32.63
Price to Book 2.42 2.34
Price to Sales 2.13 1.71
EV to EBITDA 15.93 16.29
Q.4 Is Bannari Amman Sugars Ltd a good buy now?
Bannari Amman Sugars Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Bannari Amman Sugars Ltd?
Bannari Amman Sugars Ltd revenue growth is -19.3% for FY-2025, which is below its 5-year CAGR of 2.19%, indicating slower growth.

Q.2 Gross Profit margin of Bannari Amman Sugars Ltd?
Bannari Amman Sugars Ltd Gross profit margin which is the profit after deduction of direct costs, is 12.3% for FY-2025, which is above its 5-year median of 11.7%, indicating increasing margins.

Q.3 Operating Profit Margin of Bannari Amman Sugars Ltd?
Bannari Amman Sugars Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 11.73% for FY-2025, which is in line with its 5-year median of 12.05% indicating stable margins.

Q.4 Net Profit Margin of Bannari Amman Sugars Ltd?
Bannari Amman Sugars Ltd Net Profit Margin is 5.84% for FY-2025, is in line with its 5-year median of 5.84%, indicating stable margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 12.3 11.7
Operating Profit Margin (%) 11.73 12.05
Net Profit Margin (%) 5.84 5.84

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Bannari Amman Sugars Ltd?
Bannari Amman Sugars Ltd Return on Asset is 4.43%, which is in line with its 5-year historical median of 4.43%, indicating stable asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Bannari Amman Sugars Ltd?
Bannari Amman Sugars Ltd Return on capital employed is 8.68% for FY-2025, which is in line with its 5-year historical median of 8.68%. The current ROCE is below its estimated weighted average cost of capital (WACC) of 14%, indicating value preservation.

Q.7 Return on Equity (ROE) of Bannari Amman Sugars Ltd?
Bannari Amman Sugars Ltd Return on equity is 6.04% for FY-2025, which is below its 5-year historical median of 7%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Bannari Amman Sugars Ltd?
Bannari Amman Sugars Ltd Cash conversion cycle is 193 days, in line with its 5-year historical median of 193 days, indicating stable working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 0.76 0.81
ROE (%) 6.04 7
ROCE (%) 8.68 8.68
Cash Conversion Cycle 193 days 193 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Bannari Amman Sugars Ltd?
Bannari Amman Sugars Ltd Debt-to-Equity ratio is 0.08, which is lower the industry average of 0.62, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Bannari Amman Sugars Ltd?
Bannari Amman Sugars Ltd Debt to cash flow from operations is 0.35, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Bannari Amman Sugars Ltd?

Q.1 Promoter shareholding and pledge status of Bannari Amman Sugars Ltd?
Promoters hold 58.70% of the Bannari Amman Sugars Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Bannari Amman Sugars Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Bannari Amman Sugars Ltd vs industry peers?
Bannari Amman Sugars Ltd revenue CAGR is 2.19%, compared to the industry median CAGR of 2.83%, indicating slower growth and losing its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) -19.3 2.8
Gross Profit Growth (%) -21.4 3
Operating Profit Growth (%) -31.4 1.3
Net Profit Growth (%) -30.9 0.8
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.76 0.87
ROE (%) 6.04 7
ROCE (%) 8.68 8.97
Cash Conversion Cycle (days) 192.74 107

Valuation & price assessment

Q.1 Stock return of Bannari Amman Sugars Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 7.4% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
7.4% 12.1% 9.3% -5.9%
Q.2 Valuation ratios of Bannari Amman Sugars Ltd vs historical?
The current P/E ratio of 31.98 is in line with than its historical median of 32.63, indicating that the stock is trading near its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median
5-year
Industry Median
Price to Earnings 31.98 32.63 13.25
Price to Book 2.42 2.34 1.05
Price to Sales 2.13 1.71 0.65
EV to EBITDA 15.93 16.29 8.73

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