Dhampur Sugar (DHAMPURSUG)

FairStock Score: 25/100 — RISKY

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

Key Financials

Strengths

• Trades at P/B 0.87, below book value of ₹173.09, offering a potential margin of safety.
• P/E of 11.89 and PEG of 0.28 based on the reported 75.20% profit growth appear cheap on trailing earnings.
• Debt/Equity of 0.45 is moderate, and Piotroski F-Score of 7/9 suggests solid short-term financial health.
• Promoter holding of 49.87% broadly aligns management with minority shareholders.
• Latest quarter net profit of ₹27 Cr on sales of ₹451 Cr shows improved near-term profitability.

Concerns

• ROE of 6.26% and ROCE of 5.86% show weak returns on capital, indicating a low-quality business.
• Dividend yield is 0.00%, so shareholders get no cash return while waiting for the cycle to turn.
• The 75.20% profit growth looks cyclical given only 9.54% sales growth; sustainability is questionable.
• FairStock Score of 55/100 and 'STEADY' label suggest unspectacular fundamental momentum.

AI Analysis

Let me look at Dhampur Sugar as I would any business. The first thing that catches my eye is the price: ₹150.53 against a book value of ₹173.09, so I am buying one rupee of assets for about 87 paise. That is a Graham-like margin of safety. The P/E of 11.89 and a paper PEG of 0.28 look cheap, but I must be careful: a 75.20% jump in profit is more likely a sugar cycle upswing than a durable franchise improvement, and sales growth is only 9.54%. In a commodity business, cheap can become cheaper if prices turn. The numbers show why: return on equity is just 6.26% and return on capital employed 5.86%. That is not a wonderful business; it is a mediocre one at a low price. The balance sheet is acceptable — debt/equity of 0.45, and a Piotroski score of 7/9 suggests financial stress is not imminent. Still, paying no dividend forces me to rely entirely on asset values and future earnings; as a shareholder, I receive no cash while I wait. Promoter holding of 49.87% is decent, but alignment alone does not create a moat. I would classify this as a cyclical asset play, not a compounder. The latest quarter, with ₹451 Cr sales and ₹27 Cr profit, is helpful, but one quarter proves nothing in sugar. I will only be interested if I believe the cycle is being purchased at a clear discount to intrinsic value, with the balance sheet to survive the down years. The F-score and low leverage are positives, but I need evidence of sustained profitability before calling this a wonderful business.

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