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INVESTMENT INSIGHTS

Check Before You Invest : Zuari Industries Ltd

BSE: 500780 NSE: ZUARIIND ISIN: INE217A01012
  |   Sector:  Agriculture & Allied activities   |   Industry:  Sugar

Snapshot

Q.1 Which industry/sub-sector does Zuari Industries Ltd belong to?
Zuari Industries Ltd belongs to the Agriculture & Allied activities sector, operating specifically within the Sugar segment.
Q.2 Is Zuari Industries Ltd a good quality company?
Zuari Industries 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 Zuari Industries Ltd undervalued or overvalued?
Zuari Industries Ltd appears Somewhat 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 221.14 9.04
Price to Book 0.2 0.20
Price to Sales 0.84 1.09
EV to EBITDA 8.92 8.11
Q.4 Is Zuari Industries Ltd a good buy now?
Zuari Industries 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 Zuari Industries Ltd?
Zuari Industries Ltd revenue growth is 21.8% for FY-2025, which is below its 5-year CAGR of 72.41%, indicating slower growth.

Q.2 Gross Profit margin of Zuari Industries Ltd?
Zuari Industries Ltd Gross profit margin which is the profit after deduction of direct costs, is 6.4% for FY-2025, which is in line with its 5-year median of 6.4%, indicating stable margins.

Q.3 Operating Profit Margin of Zuari Industries Ltd?
Zuari Industries Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 8.1% for FY-2025, which is in line with its 5-year median of 7.79% indicating stable margins.

Q.4 Net Profit Margin of Zuari Industries Ltd?
Zuari Industries Ltd Net Profit Margin is -4.29% for FY-2025, is below its 5-year median of 2.51%, indicating decreasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 6.4 6.4
Operating Profit Margin (%) 8.1 7.79
Net Profit Margin (%) -4.29 2.51

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Zuari Industries Ltd?
Zuari Industries Ltd Return on Asset is -0.75%, which is below its 5-year historical median of 0.34%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Zuari Industries Ltd?
Zuari Industries Ltd Return on capital employed is 2.15% for FY-2025, which is below its 5-year historical median of 4.45%. 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 Zuari Industries Ltd?
Zuari Industries Ltd Return on equity is -1.1% for FY-2025, which is below its 5-year historical median of 0.58%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Zuari Industries Ltd?
Zuari Industries Ltd Cash conversion cycle is 175 days, in line with its 5-year historical median of 175 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) 0.17 0.18
ROE (%) -1.1 0.58
ROCE (%) 2.15 4.45
Cash Conversion Cycle 175 days 175 days

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

Q.9 Debt to Equity ratio of Zuari Industries Ltd?
Zuari Industries Ltd Debt-to-Equity ratio is 0.28, 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 Zuari Industries Ltd?
Zuari Industries Ltd Debt to cash flow from operations is 189.72, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Zuari Industries Ltd?

Q.1 Promoter shareholding and pledge status of Zuari Industries Ltd?
Promoters hold 56.71% of the Zuari Industries Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Zuari Industries Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Zuari Industries Ltd vs industry peers?
Zuari Industries Ltd revenue CAGR is 72.41%, 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 (%) 21.8 2.8
Gross Profit Growth (%) -44.6 3
Operating Profit Growth (%) 42.9 1.3
Net Profit Growth (%) -260.9 0.8
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.17 0.87
ROE (%) -1.1 7
ROCE (%) 2.15 8.97
Cash Conversion Cycle (days) 175.34 107

Valuation & price assessment

Q.1 Stock return of Zuari Industries Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 9.4% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR		 9.4% 21.7% 24.5% -15.8%
Q.2 Valuation ratios of Zuari Industries Ltd vs historical?
The current P/E ratio of 221.14 is higher than its historical median of 9.04, 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 221.14 9.04 13.25
Price to Book 0.2 0.20 1.05
Price to Sales 0.84 1.09 0.65
EV to EBITDA 8.92 8.11 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

Check trending companies

1. The Great Eastern Shipping Company Ltd.
2. PB Fintech Ltd.
3. Go Digit General Insurance Ltd.
4. Gillette India Ltd.
5. Tata Communications Ltd.
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