Sh.Renuka Sugar (RENUKA)

FairStock Score: 3/100 — RISKY

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

Key Financials

Strengths

• Promoter holding of 62.48% provides ownership alignment.
• Piotroski F-Score of 6/9 suggests limited immediate financial distress signals.
• Quarterly sales of ₹2,273 Cr show a large-scale sugar operation.
• ROCE of 10.64% indicates some positive return on capital employed.

Concerns

• Negative book value of ₹-10.89 per share means liabilities exceed assets.
• Latest quarter net loss of ₹38 Cr on ₹2,273 Cr sales; operations not sustainably profitable.
• Sales declined 12.67%, showing a shrinking top line.
• P/E and P/B are meaningless; zero dividend yield; FairStock Score 13/100 signals high risk.

AI Analysis

Looking at Sh.Renuka Sugar, I see a business that fails my first test: a sound financial foundation. The book value is negative at ₹-10.89 per share, meaning liabilities exceed assets. A company with negative net worth cannot be valued using price-to-book; the P/E of 0.00 is meaningless because there is no positive earnings power. In the latest quarter, despite ₹2,273 Cr of sales, the company lost ₹38 Cr. Add a 12.67% decline in sales, and I see a cyclical sugar operation struggling to stay profitable. The reported ROE of 196.37% is a mathematical illusion caused by negative equity, not evidence of a wonderful business. ROCE of 10.64% is modest at best, and with zero dividend yield, shareholders are not being paid to wait. The Piotroski F-Score of 6/9 is the only faint positive, but that is a short-term check, not a margin of safety. Promoter holding of 62.48% does align management with shareholders, but alignment cannot offset negative book value. The FairStock score of 13/100 matches my instinct: this is risky. Sugar is a commodity business, likely to remain cyclical, with little durable competitive advantage. I look for cigar-butt bargains, but a negative book value company with a quarterly loss is not a cigar butt with one puff left—it is a matchstick already burned. I would not anchor on the 52-week range of ₹21.06 to ₹33.50; a low price is not the same as value. In Graham's language, price is what you pay, value is what you get. Here, I cannot find a reasonable value. I would need to see positive net worth, meaningful profits, and sustained cash generation before I could consider this a potential investment. Until then, Renuka Sugar belongs on the 'too hard' pile.

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