Balrampur Chini (BALRAMCHIN)

FairStock Score: 48/100 — MIXED

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

Key Financials

Strengths

• Piotroski F-Score of 8/9 indicates strong recent financial health and operating efficiency
• ROE of 11.80% and ROCE of 10.16% show acceptable capital allocation
• Promoter holding at 42.85% aligns management with minority shareholders
• Latest quarter net profit of ₹113 Cr on sales of ₹1,454 Cr reflects stable margin environment
• Book value of ₹187.94 provides some tangible asset support

Concerns

• Free cash flow is negative at ₹-455 Cr, suggesting earnings quality issues and heavy capex or working capital needs
• P/E of 21.21 with profit growth of only 8.07% makes valuation rich; PEG of 3.15 is expensive
• Graham Number of ₹305.56 versus market price of ₹541.40 implies a margin of safety of -54%
• Altman Z-Score of 2.57 falls in a grey zone, indicating some financial distress risk

AI Analysis

When I look at Balrampur Chini, I see a well-managed sugar company in a business that rarely excites me. Sugar is sugar—a commodity, subject to government policy, cane prices, and monsoon cycles. There is no true pricing power, and any moat is largely operational, not structural. The numbers confirm a decent operator: return on equity at 11.80% and ROCE at 10.16% are respectable, and a Piotroski F-Score of 8 out of 9 tells me the balance sheet has improved in recent quarters. Promoter holding at 42.85% is also comforting. But I cannot ignore the price. At ₹541.40, the stock trades at 21.21 times earnings for a business growing profit at only 8.07%. That implies a PEG of 3.15—hardly a bargain. My Graham Number works out to ₹305.56, meaning the market is asking me to pay roughly 77% above what a conservative valuation suggests. The margin of safety is deeply negative at minus 54%. Worse, free cash flow is minus ₹455 crore, so reported profits are not translating into cash. Debt-to-equity at 0.69 is manageable but not negligible, and the Altman Z-Score of 2.57 sits in a grey zone. This is a cyclical business, and cyclical businesses must be bought when they are out of favor, not after a run from ₹393 to ₹664. I would need a much lower price and clearer signs of cash generation before putting my money here. For now, I politely pass.

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