Uttam Sug.Mills (UTTAMSUGAR)

FairStock Score: 34/100 — RISKY

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

Key Financials

Strengths

• Low P/E of 6.57 and P/B of 1.47, with ROE of 17.02%, offer a margin of safety if earnings stabilize.
• Debt-to-equity of just 0.34 gives a sturdy balance sheet for a cyclical sugar business.
• Promoter holding at 74.39% signals strong insider alignment, though free float is small.
• Sales growth of 22.39% shows healthy revenue momentum in the latest period.

Concerns

• Profit growth is down 8.55%, and the latest quarter's net profit of ₹30 Cr against sales of ₹494 Cr shows margin pressure.
• Piotroski F-Score of 4/9 suggests weak financial health and limited fundamental improvement.
• ROCE of 11.82% is well below ROE, indicating less efficient use of total capital.
• Sugar is a cyclical commodity business exposed to cane prices, and government policies.

AI Analysis

Uttam Sugar Mills is exactly the kind of business I like to study before getting excited. At ₹264.64, the market is pricing it at 6.57 times earnings and 1.47 times book, with a book value of ₹179.77. That headline P/E looks cheap, but cheap can be a trap if the underlying business is deteriorating. Sales grew 22.39%, yet profit fell 8.55% — the latest quarter shows ₹494 Cr sales and ₹30 Cr net profit. The Piotroski score of 4/9 tells me the financial health is not improving; it is mixed at best. So I cannot call this a simple bargain. The balance sheet is respectable: debt-to-equity is only 0.34, and return on equity is 17.02%. In a commodity business like sugar, a low-debt balance sheet matters because sugar prices swing with government policy, cane costs, and supply cycles. Promoters hold 74.39%, which aligns interests, though it also means limited free float and possible liquidity issues. I would not mistake this for a compounding machine. ROCE is 11.82%, below the ROE, and profit growth is negative. The PEG of 0.29 looks extremely attractive only if you trust historical growth; I do not, because the earnings are trending down. Sugar is a cyclical industry. Uttam Sugar likely sits closer to the bottom of a cycle, and value in cyclicals comes when balance sheets are sturdy and the market undervalues the mid-cycle earnings power. My approach: wait for evidence of improving profitability and stable margins before acting. The score of 53/100 matches my caution. Price alone is not enough; I need earnings power.

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