Davangere Sugar (DAVANGERE)
CyclicalScore breakdown: P/E: 0/3 · ROCE: 0/2 · Growth: 0/2 · Dividend: 0/1
Key Financials
| Current Price | ₹3.01 |
| Market Cap | ₹430.43 Cr |
| P/E Ratio | 60.2 |
| ROCE | 6.7% |
| ROE | 1.99% |
| Dividend Yield | 0% |
| Profit Growth | -28.05% |
| Debt/Equity | 0.6 |
| Sales Growth | 43.49% |
| Promoter Holding | 41.78% |
| 52-Week Range | ₹1.74 — ₹5.5 |
| Sector | Diversified FMCG |
| Book Value | ₹2.59 |
Strengths
- Sales growth of 13% shows top-line momentum
- Debt-to-equity of 0.47 indicates a manageable balance sheet
- Promoter holding at 41.78% provides some alignment
- P/B of 1.52 is not extreme if earnings recover
Concerns
- Profit growth collapsed by -61.30% while P/E is 68.55 – valuation disconnected from earnings
- ROE of 2.48% and ROCE of 6.70% signal poor capital efficiency
- Piotroski F-Score of 4/9 highlights weak financial fundamentals
- No dividend yield and PEG of 5.27 offers no comfort for patience
AI Analysis
At first glance, Davangere Sugar looks like exactly the kind of stock I avoid – a business whose glamour is only in its name, not its numbers. Selling at ₹3.64, the market capitalizes it at ₹582 Cr. But what do I get for that? A company earning a paltry 2.48% return on equity, with ROCE of just 6.70%. These are not the economics of a durable franchise; they are the economics of a commodity operation struggling to earn its cost of capital. The trailing P/E of 68.55 is absurd when profits have collapsed by 61.30%. Even a 13% sales growth cannot justify such a multiple, especially when the PEG ratio stands at 5.27. The Piotroski F-Score of 4/9 suggests fundamental weakness, not the financial health I demand. Book value is ₹2.40, so I am paying 1.52 times book for a business with sub-par returns. There is no dividend yield to compensate me for waiting. Promoter holding of 41.78% is decent, and debt/equity at 0.47 is manageable, but a low debt burden is meaningless if the company can't generate profitable returns. The latest quarter shows only ₹3 Cr net profit on ₹83 Cr sales – razor-thin margins. This is a cyclical business masquerading as FMCG, caught in a downcycle perhaps, but there is no margin of safety at this price. Graham would say: price is what you pay, value is what you get. Here, I see little value. This is a pass for me, or at best a wait until earnings stabilize and the price drops closer to book value.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer