Magadh Sugar (MAGADSUGAR)

FairStock Score: 36/100 — MIXED

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

Key Financials

Strengths

• P/B of 0.98 – trading at a discount to book value of ₹536.55 per share
• Low P/E of 7.39 and PEG of 0.52 with profit growth of 23.92%
• Healthy balance sheet: D/E of 0.41 and Piotroski F-Score of 7/9
• High promoter holding of 61.02% and dividend yield of 2.72%
• Latest quarter shows sales of ₹296 Cr and net profit of ₹25 Cr, indicating stable operations

Concerns

• Sugar is a commodity with no pricing power and a structurally weak moat
• Sales growth is only 4.43% – barely keeping pace with inflation
• Cyclicality of sugar prices and regulatory interventions can compress margins
• FairStock Score of 49/100 suggests mixed fundamentals, not a clear-cut bargain

AI Analysis

Magadh Sugar catches my eye for one simple reason: I am paying ₹526 for每 rupee of book value worth ₹536. That’s a P/B of 0.98, essentially buying the company at a slight discount to what its net assets are worth. The P/E of 7.39 and PEG of 0.52 suggest the market is giving this sugar business little credit for its recent profit growth of 23.92%. But let’s be honest with ourselves — sugar is a commodity, and I don’t like businesses where the product is the same as everyone else’s. There is no real moat here; the earnings are at the mercy of sugar prices, monsoon cycles, and government policy. The sales growth of only 4.43% confirms this is not a growth machine. Still, the balance sheet is decent: debt-to-equity of 0.41 and a Piotroski F-Score of 7/9 indicates the company is financially healthy and not faking its numbers. The 61% promoter holding aligns interests, and a 2.72% dividend yield gives me some payback while I wait. At 8 times trailing earnings, the market has already priced in a lot of pessimism. But I must remind myself: a cheap cyclical can become cheaper. I would call this a solid cyclical asset play, not a compounding stalwart. If sugar prices remain firm and profits hold, the stock is undervalued. If the cycle turns, the book value offers some cushion, but I won’t mistake a commodity producer for a franchise.

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