Andhra Sugars (ANDHRSUGAR)

FairStock Score: 42/100 — MIXED

Score breakdown: P/E: 3/3 · ROCE: 0/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

Strengths

• Zero debt (D/E 0.00) and price below book value (P/B 0.77) provide a margin of safety
• Low P/E of 9.89 with a solid promoter holding of 50.49%
• Sales growth of 23.57% and Piotroski F-Score of 7/9 indicate improving fundamentals
• Latest quarter sales of ₹631 Cr and net profit of ₹23 Cr show recent operating momentum
• ROE of 11.33% is respectable for a commodity chemicals player

Concerns

• ROCE of only 3.54% suggests weak return on invested capital
• 1,000% profit growth is likely distorted by a low base and not sustainable
• Commodity chemicals business lacks pricing power and is inherently cyclical
• Dividend yield of 1.08% is modest; 52-week range of ₹66.50-₹107.00 shows volatility

AI Analysis

I like to begin with balance sheet. Andhra Sugars trades at ₹92.61, while book value is ₹120.71—so I am buying ₹1 of net assets at 77 paise. There is zero debt, and promoter holding is a solid 50.49%. That gives me a margin of safety. But a bargain price must be backed by earning power. The company earned an ROE of 11.33% and a Piotroski score of 7/9, which tells me fundamentals are improving. Sales grew 23.57%, and the latest quarter shows sales of ₹631 Cr with net profit of ₹23 Cr. The 1,000% profit growth looks phenomenal, but I am suspicious—it smells of a low base, not true compounding. With a P/E of 9.89, the market is not paying a fancy multiple, and the 1.08% dividend yield is modest. My bigger concern is the nature of the business. Commodity chemicals is a price taker's game, and ROCE of only 3.54% is weak. I don't care about the PEG of 0.02; it is meaningless when earnings are bouncing. This looks like a classic cyclical/value situation. Mr. Market offers the stock below book, but I need to see sustained capital allocation before calling it a wonderful business. It may be a decent asset play, but I want management to convert those assets into higher returns. FairStock score of 46/100 is mixed, and the 52-week range of ₹66.50-₹107.00 reminds me that this is not a steady compounder. I'd hold it in the too-hard pile unless I can track the commodity cycle and quarterly results carefully.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer