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Check Before You Invest : Magadh Sugar & Energy Ltd

BSE: 540650 NSE: MAGADSUGAR ISIN: INE347W01011
  |   Sector:  Agriculture & Allied activities   |   Industry:  Sugar

Snapshot

Q.1 Which industry/sub-sector does Magadh Sugar & Energy Ltd belong to?
Magadh Sugar & Energy Ltd belongs to the Agriculture & Allied activities sector, operating specifically within the Sugar segment.
Q.2 Is Magadh Sugar & Energy Ltd a good quality company?
Magadh Sugar & Energy Ltd is a average quality company, based on a somewhat consistent 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 Magadh Sugar & Energy Ltd undervalued or overvalued?
Magadh Sugar & Energy Ltd appears Undervalued, as its key valuation ratios are lower 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 10.44 9.78
Price to Book 0.75 0.88
Price to Sales 0.53 0.55
EV to EBITDA 8.94 8.19
Q.4 Is Magadh Sugar & Energy Ltd a good buy now?
Magadh Sugar & Energy 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 Magadh Sugar & Energy Ltd?
Magadh Sugar & Energy Ltd revenue growth is 20.6% for FY-2025, which is above its 5-year CAGR of 7.61%, indicating faster growth.

Q.2 Gross Profit margin of Magadh Sugar & Energy Ltd?
Magadh Sugar & Energy Ltd Gross profit margin which is the profit after deduction of direct costs, is 13.3% for FY-2025, which is above its 5-year median of 10.7%, indicating increasing margins.

Q.3 Operating Profit Margin of Magadh Sugar & Energy Ltd?
Magadh Sugar & Energy Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 15.95% for FY-2025, which is above its 5-year median of 13.73% indicating increasing margins.

Q.4 Net Profit Margin of Magadh Sugar & Energy Ltd?
Magadh Sugar & Energy Ltd Net Profit Margin is 8.28% for FY-2025, is above its 5-year median of 5.27%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 13.3 10.7
Operating Profit Margin (%) 15.95 13.73
Net Profit Margin (%) 8.28 5.27

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Magadh Sugar & Energy Ltd?
Magadh Sugar & Energy Ltd Return on Asset is 6.5%, which is above its 5-year historical median of 3.6%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Magadh Sugar & Energy Ltd?
Magadh Sugar & Energy Ltd Return on capital employed is 12.74% for FY-2025, which is above its 5-year historical median of 8.77%. 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 Magadh Sugar & Energy Ltd?
Magadh Sugar & Energy Ltd Return on equity is 13.86% for FY-2025, which is above its 5-year historical median of 8.12%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Magadh Sugar & Energy Ltd?
Magadh Sugar & Energy Ltd Cash conversion cycle is 171 days, in line with its 5-year historical median of 171 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) 0.79 0.7
ROE (%) 13.86 8.12
ROCE (%) 12.74 8.77
Cash Conversion Cycle 171 days 171 days

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

Q.9 Debt to Equity ratio of Magadh Sugar & Energy Ltd?
Magadh Sugar & Energy Ltd Debt-to-Equity ratio is 0.85, which is above the industry average of 0.62, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Magadh Sugar & Energy Ltd?
Magadh Sugar & Energy Ltd Debt to cash flow from operations is 5.08, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Magadh Sugar & Energy Ltd?

Q.1 Promoter shareholding and pledge status of Magadh Sugar & Energy Ltd?
Promoters hold 61.02% of the Magadh Sugar & Energy Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Magadh Sugar & Energy Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Magadh Sugar & Energy Ltd vs industry peers?
Magadh Sugar & Energy Ltd revenue CAGR is 7.61%, compared to the industry median CAGR of 2.83%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 20.6 2.8
Gross Profit Growth (%) -3.9 3
Operating Profit Growth (%) -0.5 1.3
Net Profit Growth (%) -6 0.8
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.79 0.87
ROE (%) 13.86 7
ROCE (%) 12.74 8.97
Cash Conversion Cycle (days) 171.46 107

Valuation & price assessment

Q.1 Stock return of Magadh Sugar & Energy Ltd over the last decade?
Over the last 5 year(s), the stock has delivered a CAGR of 21.99% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- 22% 9.1% -35.2%
Q.2 Valuation ratios of Magadh Sugar & Energy Ltd vs historical?
The current P/E ratio of 10.44 is higher than its historical median of 9.78, indicating that the stock is trading above 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 10.44 9.78 13.25
Price to Book 0.75 0.88 1.05
Price to Sales 0.53 0.55 0.65
EV to EBITDA 8.94 8.19 8.73

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