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INVESTMENT INSIGHTS

Check Before You Invest : The Ugar Sugar Works Ltd

BSE: 530363 NSE: UGARSUGAR ISIN: INE071E01023
  |   Sector:  Agriculture & Allied activities   |   Industry:  Sugar

Snapshot

Q.1 Which industry/sub-sector does The Ugar Sugar Works Ltd belong to?
The Ugar Sugar Works Ltd belongs to the Agriculture & Allied activities sector, operating specifically within the Sugar segment.
Q.2 Is The Ugar Sugar Works Ltd a good quality company?
The Ugar Sugar Works 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 The Ugar Sugar Works Ltd undervalued or overvalued?
The Ugar Sugar Works 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 34.81 14.80
Price to Book 2.03 4.94
Price to Sales 0.31 0.51
EV to EBITDA 10.14 12.19
Q.4 Is The Ugar Sugar Works Ltd a good buy now?
The Ugar Sugar Works 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 The Ugar Sugar Works Ltd?
The Ugar Sugar Works Ltd revenue growth is 15.5% for FY-2025, which is above its 5-year CAGR of 8.85%, indicating faster growth.

Q.2 Gross Profit margin of The Ugar Sugar Works Ltd?
The Ugar Sugar Works Ltd Gross profit margin which is the profit after deduction of direct costs, is 0.4% for FY-2025, which is below its 5-year median of 4.4%, indicating decreasing margins.

Q.3 Operating Profit Margin of The Ugar Sugar Works Ltd?
The Ugar Sugar Works Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 3.04% for FY-2025, which is below its 5-year median of 7.1% indicating decreasing margins.

Q.4 Net Profit Margin of The Ugar Sugar Works Ltd?
The Ugar Sugar Works Ltd Net Profit Margin is -1.22% for FY-2025, is below its 5-year median of 1.84%, indicating decreasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 0.4 4.4
Operating Profit Margin (%) 3.04 7.1
Net Profit Margin (%) -1.22 1.84

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of The Ugar Sugar Works Ltd?
The Ugar Sugar Works Ltd Return on Asset is -1.37%, which is below its 5-year historical median of 2%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of The Ugar Sugar Works Ltd?
The Ugar Sugar Works Ltd Return on capital employed is 3.35% for FY-2025, which is below its 5-year historical median of 11.31%. 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 The Ugar Sugar Works Ltd?
The Ugar Sugar Works Ltd Return on equity is -7.25% for FY-2025, which is below its 5-year historical median of 23.85%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of The Ugar Sugar Works Ltd?
The Ugar Sugar Works Ltd Cash conversion cycle is 122 days, in line with its 5-year historical median of 122 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) 1.19 1.23
ROE (%) -7.25 23.85
ROCE (%) 3.35 11.31
Cash Conversion Cycle 122 days 122 days

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

Q.9 Debt to Equity ratio of The Ugar Sugar Works Ltd?
The Ugar Sugar Works Ltd Debt-to-Equity ratio is 2.85, 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 The Ugar Sugar Works Ltd?
The Ugar Sugar Works Ltd Debt to cash flow from operations is 28.68, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of The Ugar Sugar Works Ltd?

Q.1 Promoter shareholding and pledge status of The Ugar Sugar Works Ltd?
Promoters hold 44.54% of the The Ugar Sugar Works Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does The Ugar Sugar Works Ltd performance compare with that of its Peers?

Q.1 Revenue growth of The Ugar Sugar Works Ltd vs industry peers?
The Ugar Sugar Works Ltd revenue CAGR is 8.85%, 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 (%) 15.5 2.8
Gross Profit Growth (%) -91.5 3
Operating Profit Growth (%) -42.9 1.3
Net Profit Growth (%) -176.2 0.8
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.19 0.87
ROE (%) -7.25 7
ROCE (%) 3.35 8.97
Cash Conversion Cycle (days) 121.95 107

Valuation & price assessment

Q.1 Stock return of The Ugar Sugar Works Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 4.1% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR		 4.1% 7.1% -26.9% -15%
Q.2 Valuation ratios of The Ugar Sugar Works Ltd vs historical?
The current P/E ratio of 34.81 is higher than its historical median of 14.80, 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 34.81 14.80 13.25
Price to Book 2.03 4.94 1.05
Price to Sales 0.31 0.51 0.65
EV to EBITDA 10.14 12.19 8.73

Check more companies

1. E.I.D. Parry (I)
2. Balrampur Chini Mill
3. Triveni Engg. & Inds
4. Shree Renuka Sugar
5. Bajaj Hindusthan Sug
6. Banna Amman Sugars
7. Dalmia Bharat Sugar
8. M.V.K. Agro FoodProd
9. Godavari Biorefin
10. Avadh Sugar & Energy

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