Fundamental Analysis of Polyplex Corporation – Financials, Future Plans & More

Fundamental Analysis of Polyplex Corporation: Investors look for diversification in their portfolios to hedge risk. This transcends to product lines, geography, and customers of the stocks. Polyplex is one such well-diversified stock with multiple products spanning various segments. It has a presence in 75 countries with manufacturing plants in 7 countries. Sounds so diverse, let us perform a fundamental analysis of Polyplex Corporation to know more about the company in detail.

Fundamental Analysis of Polyplex Corporation

In this article, we shall conduct a fundamental analysis of Polyplex Corporation. We will get ourselves acquainted with the history and business of the company, followed by the industry overview of the different product segments in which it operates. Later, a few sections are devoted to assessing revenue & profitability growth, return ratios, and debt analysis. A highlight of the future plans and a summary to conclude the article at the end.

Company Overview

Established in 1983, Polyplex Corporation is the seventh-largest manufacturer of polyester (PET) films globally. It is a leading producer of BOPET films and offers a broad portfolio of various substrates including BOPET (thin & thick), BOPP, CPP, and Blown PP/PE.

This specialty, innovative and differentiated products find their applications in packaging, electrical & electronic, and other industrial uses. The company has well-integrated backward and forward capabilities offering it cost competitiveness, supply security, higher innovation, value addition, and decreased earnings volatility. 

Polyplex has a global presence in 75 countries with manufacturing and distribution facilities across the USA, Indonesia, India, Thailand, and Turkey. As for domestic sales, India contributed 19% of the revenues in the recent fiscal year. Overall, the company is well diversified in terms of region-wise sales.

Its downstream businesses that produce digital media films, laser printer films, lamination films and more such diverse products made up 16% of the revenues in FY22. This segment assists in stabilizing overall margins for many products. 

The table below shows the breakdown of sales of Polyplex Corporation across various heads:

Source: Polyplex Corporation Annual Report FY 2021-22

We read about the business of Polyplex with a focus on diversity as per various segments. Now, let us move ahead to understand the polyester (PET) films industry and its growth prospects.

Industry Overview

For our industry analysis, we’ll restrict our coverage to the product segments in which the company primarily operates: Thin PET, Thick PET, and BOPP. Together these three segments accounted for 71% of the income.

The global BOPET films market is divided into thin films and thick films. 

Thin BOPET Films

Thin films make up over 3/4th of PET film demand worldwide. Flexible packaging is the largest sub-segment of thin films, accounting for 75% of the total thin films used.

As for consumption, Asia is the largest market for thin polyester films. The continent consumes more than 3/4th of the total thin films produced worldwide. Globally, the market is projected to grow at 5-6% for the next few years. Domestic market growth is expected at about 10% every year.

In the years ahead, an increase in purchasing power and a concurrent rise in per capita packaging material consumption will primarily lead to thin BOPET film demand growth.

Thick BOPET Film Market

Electronics, electrical & other industrial products make up for the demand for thick BOPET films. The global thick film market is projected to grow at a consistent CAGR of 4-5% in the coming years. 

A rise in photovoltaic, flat panel displays, liners for electronic applications, and flexible electronics are expected to be major growth catalysts.

BOPP Film Market

BOPP is similar to BOPET but has added properties of high moisture resistance, sealing, etc. The global BOPP market is estimated to grow at 4% every year. Domestic market growth is expected at about 15% every year.

As for the two major segments, food packaging made up 64% of the total BOPP demand, followed by 18% of non-food packaging applications.

Putting all this together, we can say that the BOPET and BOPP demand in India (and other developing countries as well) is projected to grow faster than the global average. In the next section of our Polyplex Corporation, let us take a look at how the company has grown over the years.

Polyplex Corporation – Financials

Revenue & Net Profit Growth

The operating revenue of the BOPET manufacturer has grown at a CAGR of 13.05% every year from Rs 3,588 crore in FY18 to Rs 6,624 crore in FY22. During the same period, its net profit advanced at a much sharper rate of 27.70% compounded annually to Rs 965 crore in FY22.

The table below presents the operating revenue and net profit figures of Polyplex Corporation for the last five financial years.

Financial Year	Operating Revenue (Rs Cr)	Net Profit (Rs Cr)
2022	6,624	965
2021	4,918	862
2020	4,487	494
2019	4,570	584
2018	3,588	284
5-Yr CAGR (%)	13.05%	27.70%

We noted above how the bottom line of the company tripled in the past few years. What can be the reason behind the same? Read the next section on profit margins to find out.

Margins: Operating Profit & Net Profit

Polyplex reported an operating profit margin and net profit margin of 17.57% and 14.56% in FY22 respectively. The margins were lower than those clocked a year before but still high enough.

Overall, the operating profit margin of the company has expanded significantly in FY22 when compared with FY18 levels. This has resulted in higher profitability and a wider net profit margin. 

The data below shows the improvement in the operating margin and net profit margin of Polyplex Corporation over the last five fiscals.

Financial Year	OPM (%)	NPM (%)
2022	17.56	14.56
2021	20.25	17.52
2020	13.12	11.00
2019	15.00	12.77
2018	9.89	7.95

Summing up the findings of our fundamental analysis of Polyplex Corporation so far, we can say that the operating income of the company has grown impressively. But more than that, it has gained on broader margins as the demanding industry improved. 

In the next section, we take a look at the effect of higher profit margins on the return ratios of the business.

Return Ratios: RoE & RoCE

Following the suit of profit margins, the return ratios: the return on equity (RoE), and the return on capital employed (RoCE) have gotten better in the last five years.

In FY 2021-22, RoE and RoCE of Polyplex Corp. stood at the top of 30.30% and 29.08% respectively. This points to the strong profitability of the BOPET business overall and the pricing power of the company. 

The information below highlights the RoE and RoE for the previous five years of the company.

Financial Year	RoE (%)	RoCE (%)
2022	30.30	29.08
2021	28.35	26.45
2020	17.03	17.92
2019	21.95	19.68
2018	11.72	10.83

From the figures above, we can take into note one more thing. There is not much disparity between the two return ratios across different fiscals in the past. Perhaps, the debt is low and the management has not resorted to financial leverage to inflate the return on equity.

Time to find out in the next section of our fundamental analysis of Polyplex Corporation.

Debt to Equity & Interest Service Coverage

The table below shows lists the debt-to-equity ratio (D/E) and interest service coverage ratio (ISCR) of Polyplex Corporation for the last five years.

Financial Year	Debt/Equity	Interest Service Coverage
2022	0.28	70.49
2021	0.23	56.67
2020	0.25	36.53
2019	0.28	23.58
2018	0.34	8.96

We can easily see that the stock carries very low debt at a D/E ratio of 0.28 only. In addition to this, its ISCR has surged multi-fold as the bottom line of the company has grown over the years.

Basically, Polyplex Corporation is a financially strong company.

Future Plans Of Polyplex Corporation

So far we have only looked at the previous fiscals’ results for our fundamental analysis of Polyplex Corporation. In this section, let us see what lies ahead for the company and its investors.

1. The company is currently increasing its manufacturing capacity of polyester films in the US. After its completion, it will be the second-largest producer of BOPET globally excluding China.
2. Polyplex has 27 patents across various products, processes, & nations and has filed applications for 14 more patents. 

Fundamental Analysis of Polyplex Corporation – Key Metrics

We are now almost at the end of our fundamental analysis of Polyplex Corporation. Let us take a quick look at the key metrics of the stock.

CMP	₹1,749	Market Cap (Cr.)	₹5,500
EPS	₹211.00	Stock P/E	8.32
ROCE	29.08%	ROE	30.30%
Face Value	₹10.0	Book Value	₹1,131
Promoter Holding	51.0%	Price to Book Value	1.53
Debt to Equity	0.28	Dividend Yield	5.91%
Net Profit Margin	14.56%	Operating Profit Margin	17.56%

In Conclusion

We noted above how the industry growth and integrated business model have assisted the company to clock higher topline and bottom-line figures. In the last year, the stock has become a new favorite of FIIs as their shareholding has increased to 14.81% from 8.64% only for the quarter ending September 2021.

In your opinion, what lies ahead for the Polyplex group? At present P/E of 8.32, is it an attractive bet? Will the company be able to sustain its margins? How about we continue this conversation in the comments below?

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Sah Polymers IPO Review 2022 – GMP, Strengths, & More!

Sah Polymers IPO Review: Sah Polymers Limited is coming up with its Initial Public Offering. The IPO will open for subscription on December 30th, 2022, and close on January 4th, 2023. It is looking to raise Rs 66.30 Crores, the whole of which will be a Fresh Issue. In this article, we will look at the Sah Polymers IPO Review 2022 and analyze its strengths and weaknesses. Keep reading to find out!

Sah Polymers IPO Review

About The Company

Sah Polymers Limited is primarily engaged in the manufacturing and selling of Polypropylene (PP), High-Density Polyethylene (HDPE) FIBC Bags, and other woven polymer-based products of different weights, sizes, and colors as per customer’s specifications.

The company offers customized bulk packaging solutions to various industries that include Agro Pesticides Industry, Basic Drug Industry, Cement Industry, Chemical Industry, Fertilizer Industry, Food Products Industry, Textile Industry Ceramic Industry, and Steel Industry. 

It has a presence in 6 states and 1 union territory in India. In addition to that, the company internationally supplied its products in Africa, the Middle East, Europe, the USA, Australia, and the Caribbean.

Products of the company

The product portfolio of the company includes:

• FIBC (Flexible intermediate bulk container)
• Container Bag
• Garden bags/wastage bags
• Woven sacks
• PP Fabric
• Ground covers
• Spiral tubing
• Box bags
• PP Woven Fabric Rolls

The competitors of the company

(Source: DRHP of the company)

Financial Highlights

(Source: DRHP of the company)

Sah Polymers IPO Review – Industry Overview

The packaging industry is the 5th largest sector of India’s economy. The industry has reported steady growth over the past several years and shows high potential for expansion, particularly in the export market.  The country majorly exports flattened cans, printed sheets and components, crown cork, lug caps, plastic film laminates, craft paper, paper boards, and packaging machinery. Going forward, the Indian Packaging Market was valued at USD 50.5 billion in 2019, and it is expected to reach USD 204.81 billion by 2025, registering a CAGR of 26.7% during the period of 2020-2025.

Strengths

• The company has a strong and diversified product portfolio.
• The company not only has a strong domestic but also an international presence.
• The company is led by a strong management team.

Weaknesses

• The company requires a constant supply of raw materials for its operations. Any disruptions can adversely affect the business.
• The company requires significant amounts of working capital. Any failure to meet its requirements can disrupt its operations.
• The promoters and directors along with the company are involved in certain litigations related to criminal, civil and tax proceedings.
• The introduction of alternative packaging materials caused by changes in technology or consumer preferences can severely affect the business.
• The company is subject to certain risks that include Foreign exchange fluctuations and disruption in their plant by employees.

Sah Polymers IPO Review – GMP

The shares of Sah Polymers traded at a premium of 6.15% in the grey market on December 27th, 2022. The shares tarded at Rs 69. This gives it a premium of Rs 4 per share over the cap price of Rs 65. 

Key IPO Information

Promoters: SAT Industries Limited

Book Running Lead Managers: Pantomath Capital Advisors Private Limited

Registrar To The Offer: Link Intime India Private Limited

Particulars	Details
IPO Size	₹66.30 Crore
Fresh Issue	₹66.30 Crore
Offer for Sale (OFS)	-
Opening date	December 30, 2022
Closing date	January 4, 2023
Face Value	₹10 per share
Price Band	₹61 to ₹65 per share
Lot Size	230 Shares
Minimum Lot Size	1 (230 Shares)
Maximum Lot Size	13 (2990 Shares)
Listing Date	January 12, 2023

The Objective of the Issue

The Net Proceeds from the Fresh Issue are proposed to be utilized for:

• Setting up a new manufacturing facility to manufacture Flexible Intermediate Bulk Containers (FIBC).
• Repayment/ Prepayment of certain secured and unsecured borrowings in full or part availed by the Company and its Subsidiaries.
• Funding the working capital requirements.
• General corporate purposes.

In Closing

In this article, we looked at the details of Sah Polymers IPO Review 2022. Analysts remain divided on the IPO and its potential gains. This is a good opportunity for investors to look into the company and analyze its strengths and weaknesses. That’s it for this post.

Are you applying for the IPO? Let us know in the comments below.

You can now get the latest updates in the stock market on Trade Brains News and you can also use our Trade Brains Screener to find the best stocks.

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Top Textile Penny Stocks in India to add to your watchlist – Detailed Analysis

Top Textile Penny Stocks: Small textile companies are present in the early stage of the value chain producing yarns & fabric, engaged in contract manufacturing, or more. Their valuations trail behind larger companies because of business size and derived demand.

However, these textile penny stocks can be lucrative investments for risk-taking investors who think larger companies are overvalued. In this article, we present a list of top textile penny stocks for such risk-loving investors.

But before we rush to the list, for starters, let us know what a penny stock is.

What is a Penny Stock?

Penny stocks are the shares of small-cap companies, usually having a market capitalization of less than Rs. 500 crores. The companies have low share prices of less than Rs. 85 or so. The stock can trade for as rock-bottom as Rs 1 or even 50 paise a piece.

A penny stock has relatively lesser liquidity. In addition to this, it can come with restrictions of delivery only, no margin trading, and more.

Risk-loving investors are always searching for penny stocks in the hope of earning multi-bagger gains. However, penny stocks often implode as often as they go up. Retail investors should exercise extreme caution while putting their money in penny stocks. 

Top Textile Penny Stocks in India

So without further ado, let us quickly jump to know about the top textile penny stocks in india on BSE and NSE.

Top Textile Penny Stocks #1 – Swasti Vinayaka Synthetics

CMP	₹7.4	Market Cap (Cr.)	₹66.9
EPS	₹0.20	Stock P/E	38.0
RoCE	14.8%	RoE	11.1%
Face Value	₹1.0	Book Value	₹1.96
Promoter Holding	51.0%	Price to Book Value	3.80
Debt to Equity	0.04	Dividend Yield	0.00%
Net Profit Margin	8.6%	Operating Profit Margin	13.5%

Founded in 1981, Swasti Vinayaka Synthetics is involved in the manufacturing of suiting, shirting and other apparel products. It is a small-cap textile penny stock with a market capitalization of Rs 66.9 crore.

The company has two manufacturing plants at Palghar and Tarapur in Maharashtra. It has a well-established design studio with the most recent CAD technology. Its key focus and expertise lie in producing high-end cotton, cotton-blended and linen designer shirting.

Swasti Vinayaka Synthetics supplies its merchandise to large retail chains, the readymade garments sector, garment exporters and large corporate houses.

Its list of customers includes some well-established names such as Bombay Dyeing, Arvind Lifestyle Brands, Pantaloons, Trent, ITC, LIC of India, Coca Cola and more.

Its net profit has remained consistent over the last three years despite registering a decline in income in FY21. For the financial year ending 2022, the textile manufacturer posted a net profit of Rs 1.75 crore on revenues of Rs 20.35 crore. As a feather in its cap, it is a debt-free stock with an insignificant debt-to-equity ratio of 0.04 only.

Top Textile Penny Stocks #2 – R&B Denims

CMP	₹42.4	Market Cap (Cr.)	₹297
EPS	₹3.61	Stock P/E	13.2
RoCE	25.80%	RoE	37.40%
Face Value	₹2.00	Book Value	₹10.8
Promoter Holding	73.8%	Price to Book Value	3.91
Debt to Equity	0.61	Dividend Yield	0.00%
Net Profit Margin	7.0%	Operating Profit Margin	14.4%

R&B Denims was promoted by the RawatKhedia Group and the Borana Group in 2012. With over a business history of 30 years, both groups are well-known business families in Surat, Gujarat. 

The company is one of the largest vertically integrated denim manufacturers globally with an annual capacity of 30 million meters. Its advanced facilities can produce high-width denim of up to 76 inches. 

Additionally, its finishing facility is well-equipped to churn out a broad range of denim finishes: wet chemical application, foam application, over-dyeing, coating, resin application and more.

Barring 2021, its revenues have consistently grown over the years. For the financial year ended 2022, the denim producer clocked a net profit of Rs 22 crore on sales of Rs 293 crore. 

It is a profitable business with high return ratios. RoCE and RoE stood at 25.80% and 37.40% respectively. As a vote of confidence, promoters have a high shareholding in the business at 73.8%.

Top Textile Penny Stocks #3 – Sarla Performance Fibers

CMP	₹44.0	Market Cap (Cr.)	₹370
EPS	₹4.75	Stock P/E	9.36
RoCE	13.60%	RoE	12.70%
Face Value	₹1.00	Book Value	₹49.5
Promoter Holding	55.9%	Price to Book Value	0.89
Debt to Equity	0.32	Dividend Yield	4.54%
Net Profit Margin	11.0%	Operating Profit Margin	18.6%

Formerly known as Sarla Polyester Ltd., Sarla Performance Fibers is involved in the production and export of polyester & nylon textured, twisted & dyed yarns, covered yarns, high tenacity yarns and sewing thread.

The company manufactures over 250 varieties of value-added yarns and threads. In addition to its manufacturing plants outside Mumbai in Silvassa, Dadra and Vapi, Sarla has a global presence with its operations in Portugal, and Europe.

On a yearly basis, its sales rose by 65.12% to Rs 426 crore in FY22 from Rs 258 crore a year earlier. Along the same lines, the bottom line grew by 74.07% to Rs 47 crore from Rs 27 crore.

The stock presently trades at an attractive P/E ratio of 9.31 and a price-to-book value ratio of 0.89. Additionally, it is a low-debt stock with a debt-to-equity ratio of 0.32.

Top Textile Penny Stocks #4 – APM Industries

CMP	₹60.0	Market Cap (Cr.)	₹130
EPS	₹10.70	Stock P/E	5.6
RoCE	14.50%	RoE	10.20%
Face Value	₹2.00	Book Value	₹75
Promoter Holding	64.4%	Price to Book Value	0.79
Debt to Equity	0.01	Dividend Yield	1.67%
Net Profit Margin	4.6%	Operating Profit Margin	9.8%

APM Industries established its textile spinning facility in 1979-80 under the trade name of Orient Sintex. Fast forward to today, the company has a broad product line which is at par with international quality standards.

It is involved in the manufacturing of high-quality blended spun yarn, Polyester yarns, Acrylic yarns, 100% fancy yarns and fibre-dyed yarns. It’s textile spinning unit has 55,584 spindles capacity to manufacture 18 million kg of yarn every year.

APM Industries is a turnaround textile penny stock that delivered stellar sales and profit figures in FY22. The company generated a net profit of Rs 15 crore on an income of Rs 317 crore in FY22. This was accompanied by an expansion in operating profit margins.

Its earnings had been on a decline since 2017. For instance, the company’s profit and sales were only Rs 5 crore and Rs 237 crore in FY21. 

The promoter holding in the textile penny stock stood at 64.4% as of September 30, 2022. It presently trades at an attractive P/E ratio of 5.6 and price to book value of 0.79.

Top Textile Penny Stocks #5 – VTM

CMP	₹50.4	Market Cap (Cr.)	₹203
EPS	₹3.33	Stock P/E	15.1
RoCE	7.58%	RoE	6.14%
Face Value	₹1.00	Book Value	₹59.3
Promoter Holding	75.0%	Price to Book Value	0.85
Debt to Equity	0.02	Dividend Yield	1.79%
Net Profit Margin	7.19%	Operating Profit Margin	12.0%

VTM Ltd. traces its origins back to 1946 when the Indian textile industry was in a nascent stage. Fast forward to today, it is a well-established player fulfilling requirements for both the domestic markets and exports.

It has state-of-the art production facility with 258 looms, 80 Sulzer machines, 163 air jets, 9 Jacquards and 6 Rapier Dobby looms. It manufactures different types of fabrics including square-inch drills, twills, sateens, piques, jacquards, and a range of complex dobbies.

VTM earned a net profit of Rs 15 crore on sales of Rs 194 crore in FY22. Its income and net profit rose 35.66% and 50% on a YoY basis respectively.

The textile penny stock has a high promoter holding of 75%. It currently trades at a price-to-earnings ratio of 15.1 and an impressive price-to-book value ratio of 0.85.

The Madurai-based company is almost debt-free with a nil debt-to-equity ratio of 0.02. 

List of Top Textile Penny Stocks in India

We read bout 5 top textile penny stocks in detail above. The list below highlights more such penny stocks.

Company Name	CMP (Rs)	Market Cap (Rs Cr)
SPL Industries	75.8	220
M K Exim (India)	87.8	236
Mafatlal Industries	62.8	443
APM Industries	60.0	130
Vardhman Acrylics	59.0	475
VTM	50.4	203
Sarla Performance Fibers	44.0	370
R&B Denims	42.4	297
Pasupati Acrylon	34.6	309
Libas Consumer Products	20.3	53.7
Swasti Vinayaka Synthetics	7.43	66.9

A short section below highlights the research methodology used for this article.

Research Methodology

We used the stock screener of the Trade Brains Portal for writing this article. The research has been restricted to textiles, textile-manmade fibers, textile-spinning, and textile-weaving; the three sub-sectors of the textile industry.

As for the market capitalization and current share price, we kept the upper limit of Rs 500 crore and Rs 85 respectively. In addition to this, the debt-to-equity ratio was kept below 1 to avoid any overly-leveraged stocks.

Lastly, the price-to-earnings ratio range was kept between 1 and 50. This helped to filter out moderately profitable companies. 

All these parameters left some 48 stocks. We exercised subjective judgement for sales and net profit growth for these stocks. 

The image below shows a section of the Trade Brains Stock Screener.

In Conclusion

We are now at the end of our study of top textile penny stocks in India. We saw how the companies differ in their products across different stages of the value chain. As an investor eying penny stocks, one should pick companies that one understands intuitively. As the amount of available information is less, a good understanding of the stock’s business reduces the downside.

In your opinion, what parameters should investors keep in mind while analyzing penny stocks? How about you let us know in the comments below?

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Fundamental Analysis of KEI Industries – Business, Future Plans & More!

Fundamental Analysis of KEI Industries: Polycab India and KEI Industries have given multi-bagger returns to their shareholders in the last five years. Both companies are in the power cables and wires industry. Is there more to the returns for investors? They say the second-largest company trades at a better valuation than the market leader. Time to find out.

In this article, we take a deep dive and perform a fundamental analysis of KEI Industries, the largest wires and cables manufacturer after Polycab.

Fundamental Analysis of KEI Industries

In this article, we shall perform a fundamental analysis of KEI Industries Ltd. We’ll start by getting ourselves acquainted with the history and business of the company, followed by an industry overview. Later, a few sections are devoted to revenue growth, return ratios, and debt analysis. A highlight of the future plans and a summary conclude the article at the end.

Company Overview

KEI Industries Ltd. was founded 54 years ago in 1968 as a house-wiring rubber cables manufacturer. Over the years, the company has emerged as a leading player providing holistic wire & cable solutions. 

Its 5 manufacturing plants produce a broad range of cables and wires: extra-high voltage (EHV), medium voltage (MV), and low voltage (LV) power cables for both institutional and retail/housing segments.

The company’s ventures into the EHV cable segment and engineering, procurement & construction (EPC) services for projects in different industries have been fruitful. It has taken multiple institutional projects from key clients such as Power Grid Corp., Delhi Metro, Tata Power, and more.

KEI has a wide network of over 1,800 dealers/distributors. It is run by a strong workforce of over 5,385 employees across various roles. It operates 38 branch offices and 21 warehouses across the nation. The cable manufacturer exports its products to 50+ countries.

We now have a pretty good understanding of the business and the scale of operations as part of our fundamental analysis of KEI Industries. For a company of such scale, a closer look at the business segments deserves a separate section.

Business Segments

The products of KEI Industries find their applications in diverse industries such as power, oil & gas, railways, automobiles, cement, steel, real estate, fertilizers, and more. In FY22, the top 10 customers accounted for 22% of the company’s revenue, making it well diversified in terms of income source.

As for the product-wise breakdown, low tension (LT) power cables brought 38% of the sales in FY22 followed by a 26% share of house wires. The image below presents the product-wise revenue mix of KEI Industries.

Source: KEI Industries Ltd. Annual Report FY 2021-22 

In addition to this, we mentioned that the company exports its cables and wires to over 55 countries worldwide in the previous section. 

Taking it forward, we can note that India as a geographical segment generated 90% of the sales and the rest 10% was earned overseas from exports. Segregating it further, retail at 41% and institutional sales at 49% together brought the said 90% domestic sales for the company.

Source: KEI Industries Ltd. Annual Report FY 2021-22 

Industry Overview

India’s wires and cables market expanded by 20-25% in FY22 on the back of inflation-led higher realizations. This means that growth was primarily price-led and not volume-led. The sharp rise in the prices of copper, aluminum, and PVC compounds used for insulation prompted the industry as a whole to resort to the price increase. 

Overall, the domestic wires and cables market is valued at Rs 60,000-65,000 crore, accounting for roughly 40-45% of the nation’s electrical industry. 

That is a fairly large market. But what are the broad product segments?

Extra-high voltage (EHV) and high voltage (HV) power cables are used for the transmission and distribution of electricity from power plants to sub-stations and further to residential, commercial, and industrial units.

Electrical power or process control systems make use of the control and instrumentation cables.  Housing wires and winding wires find their use in the retail/housing space, including various types of appliances. Telecom cables and optical fiber cables are used for the transmission of information. 

Housing, commercial, power, petrochemicals, mining, steel, non‑ferrous, shipbuilding, cement, railway, and defense are the major industries that contribute to the demand of the power cable industry.

Going forward, increased renewable power generation, expansion & modernization of transmission and distribution infrastructure, higher investments in metro railroads, smart grid initiatives, and upgrades to power transmission and distribution networks are expected to bring growth in the wires and cables industry.

So far we read about the company’s business and the industry landscape as part of our fundamental analysis of KEI Industries. In the sections ahead, we look at revenue growth, net-profit growth, profit margins, and more.

KEI Industries – Financials

Revenue & Net-Profit Growth

Barring FY21, the operating revenue of KEI Industries has consistently grown at a CAGR of 10.33% in FY18 to Rs 5,727 crore in FY22. During the same period, its net profit compounded at 21.06% every year to Rs 377 crore. 

The table below presents the operating revenue and net profit of KEI Industries for the previous five financial years.

Year	Operating Revenue (Rs Cr)	Net Profit (Rs Cr)
2022	5,726.5	376
2021	4,181.5	269
2020	4,887.8	256.2
2019	4,230.9	180.7
2018	3,503.1	144.7
5-Yr CAGR	10.33%	21.06%

Along with analyzing revenue and profitability, we must also study profit margins. Thus, we look at the company’s operating profit margin and net profit margin in the next section as part of our fundamental analysis of KEI Industries.

Margins: Operating Profit & Net Profit

The table below shows the operating profit margins and the net profit margins of KEI Industries for the last five years. 

Year	OPM (%)	NPM (%)
2022	9.56	6.56
2021	10.1	6.53
2020	9.35	5.24
2019	9.78	4.27
2018	9.12	4.17

We can note that the operating margin has largely remained the same over the years pointing at the company’s ability to transfer the increase in the cost of raw materials to the customers. 

Furthermore, the revenues have increased without a decline in the margin, implying that the company has strong demand, brand, and pricing power for its products.

We can also note that the net profit margin has improved over the years. This is because the company reduced its debt and decreased its interest expense. For instance, interest charges which were Rs 112 crore in FY18 were only Rs 40 crore in FY22.

Good, the company has lowered its debt and interest charges. But how much? To answer this, we take a closer look at the debt-to-equity ratio and interest service coverage ratio of the wires and cables manufacturer in the next section.

Debt/Equity & Interest Service Coverage

The cable manufacturer has repaid its debt over the last few years. We can see in the table below that the debt-to-equity ratio of KEI Industries has decreased to a low of 0.16 in FY22 from 1.41 in FY22. During the same period, it also increased its interest service coverage ratio multi-fold to the high of 13.56 times in FY22.

Year	Debt/Equity	Interest Coverage
2022	0.16	13.56
2021	0.17	7.29
2020	0.25	3.54
2019	0.77	3.05
2018	1.41	2.83

The reduction in debt levels has been very impressive for KEI Industries. Let us see how its return ratios have changed over the years in the section.

Return Ratios: ROCE & ROE

A casual observer may point out that the company’s return on capital employed (RoCE) and the return on equity (RoE) have declined over the years. 

However, taking into account our findings from the previous section, the decline in RoCE and RoE is because of the fall in financial leverage and expansion in the equity base. The company’s reserves and surplus balance has increased considerably in recent years on the account of higher profits and low dividend payout.

The table below highlights the RoCE and the RoE of KEI Industries for the last five fiscal years.

Year	RoCE (%)	RoE (%)
2022	24	19
2021	21	16
2020	28	22
2019	29	26
2018	27	24

Future Plans Of KEI Industries

So far we looked at only previous years’ figures as part of our fundamental analysis of KEI Industries. In this section, we read about what lies ahead for the company and its shareholders.

1. The management has earmarked investments of Rs 800 crore towards expanding the manufacturing capacity over the next four-five years.
2. Additionally, it commented that retail businesses from the dealer network will be a focus area of the company. Within two-three years, the revenue contribution from the segment has been targeted at 50%.

Fundamental Analysis of KEI Industries – Key Metrics

We are now almost at the end of our fundamental analysis of KEI Industries. Let us take a quick look at some of the key metrics of the stock.

CMP	₹1,586	Market Cap (Cr.)	₹14,500
EPS	₹47.50	Stock P/E	33.4
RoCE	24%	RoE	19%
Face Value	₹2.00	Book Value	₹260
Promoter Holding	38.0%	Price to Book Value	6.10
Debt to Equity	0.16	Dividend Yield	0.16%
Net Profit Margin	6.56%	Operating Profit Margin	9.56%

In Conclusion

We have reached the end of the fundamental analysis of KEI Industries. The company has truly been a long-term multi-bagger story with rising operating revenue and debt reduction. And through this, it has kept the operating margins at the same levels. The stock has compounded at an annual rate of 32.71% every year in the last five years. And that’s a lot!

However, the promoters of KEI have reduced their shareholding by 7.6% in the recent September 2022 quarter from 37.99% in 2019. In your opinion are the promoters selling out as the business is maturing? Is this too big a red flag to drop the stock altogether? How about you let us know your thoughts in the comments below?

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Fundamental Analysis of JSW Steel – Moat, Future Plans & More

Fundamental Analysis of JSW Steel: Steel is one of the most important commodities that touches our lives every day. Whether it’s the car we use, the house that we live in, or the water bottle we use, there is some form of steel in it.

However, steel does not occur naturally. It is made by combining coke and iron at very high temperatures. This calls for quite an investment. The steel industry mostly has old and huge companies that are involved in the making of steel.

Fundamental Analysis Of JSW Steel

In this article, we shall do a fundamental analysis of JSW Steel, one of the biggest steel companies in India. We’ll take a look at the industry that it functions in, the business that it does, its financials, and more. Keep reading to find out

Industry Dynamics

The steel industry is cyclical. Demand and supply pull the strings when it comes to the price of this commodity. When the demand is robust, steelmakers expand their capacity. And when the demand ticks lower, they incur considerable losses due to huge investments.

In addition, production dynamics bother the industry. Coking coal and iron ore are key raw materials that go into making steel. India is almost entirely dependent on imports of coking coal from Australia. Whenever there is a disruption in the supply or an increase in the price of coking coal, the cost of production shoots up.

The players face cut-throat competition as their products have readily available substitutes. As a result, margins evaporate into thin air as steelmakers cannot pass on the cost to customers.

On the other hand, India is home to the fifth-highest reserves of iron ore in the world. In fact, it exports some to other countries. However, not all steelmakers have the resources to mine it. Huge players like Tata Steel and JSW Steel have an advantage here. They can mine the ore and control their input costs to a certain extent.

India is the second-largest producer of crude steel. China comes first, and it accounts for over 50% of the world’s production. Most of their factories are directly owned by the Chinese state. Therefore they have access to cheap credit. This means that they can export steel at low prices and harm the domestic markets in various countries.

These countries, including India, can impose import duties. However, China can still manage to have a massive impact and push global prices lower. Sometimes domestic manufacturers have to slash prices and even sell steel below their cost.

Industry Overview

India’s finished steel consumption is anticipated to increase to 230 MT by 2030-31 from 133.596 MT in FY22, according to an IBEF report. At the same time, the production is anticipated to exceed 300 million tonnes by 2030–2031. The industry is witnessing a consolidation of players, leading to investment by entities from other sectors. In fact, it is attracting global players to enter the market.

The government has taken various initiatives to boost the sector. This includes the National Steel policy 2017 and allowing 100% Foreign Direct Investment (FDI) in the steel sector under the automatic route. The Indian metallurgical industries attracted FDI inflows of US$ 17.1 billion between April 2000-March 2022, according to the data released by the Department for Promotion of Industry and Internal Trade (DPIIT).

The government announced guidelines for the approved specialty steel production-linked incentive (PLI) scheme in October 2021. It had allocated a budget of ₹ 6,322 crores for disbursals to be made to applicants who are selected under the scheme.

About the Company

JSW Steel is the flagship company of the JSW group. It is a leading integrated steel manufacturer and one of the fastest-growing companies in India, with a presence in more than 100 countries. It was the first company to manufacture high-strength and advanced high-end steel products for its automotive segments.

The company offers a variety of steel products like Hot Rolled, Cold Rolled, Bare & Pre-painted Galvanized & Galvalume, TMT Rebars, Wire Rods, and Special Steel.

Manufacturing Facilities

JSW Steel had a single manufacturing facility in the early ’80s and it has grown to become India’s leading integrated steel company. It has a steel-making capacity of 28 MTPA in India and the USA, including capacities under joint control. A new capacity is to be commissioned at Dolvi this year. Its manufacturing facility in Vijaynagar, Karnataka is the largest single-location steel-producing facility in India with a capacity of 12 MTPA.

Projects

JSW steel has worked on projects with organizations like SoftBank Solar Project, Yamuna Expressway, Mumbai monorail, Dedicated freight corridor Delhi Mumbai, Chennai Metro, Mumbai International Airport, Grand Hyatt Innovation Centre, ITC Grand, ISRO and more.

Distribution & Clientele

JSW Steel’s Distribution network includes more than 11,000 exclusive and non-exclusive retail outlets. It has export footprints in over 100 countries across five continents and a strong presence in South and West India. Amber Enterprises, Bajaj Group, Bharat Heavy Electricals Ltd, Cummins India, Force Motors, Havells India, Mahindra Intertrade, and Tata Motors are some of its clients.

Competitors & Moat

JSW Steel’s competitors include Tata Steel, Steel Authority of India, APL Apollo Tubes, Ratnamani Metals & Tubes, Tata Steel BSL and Jindal Stainless.

JSW Steel has a facility strategically positioned in the iron ore-rich Bellary Hospet belt in Karnataka. It is well-connected to both Goa and Chennai ports. It is the only steel plant in India with pair cross-technology and twin-stand reversible cold rolling mills. Its flexible operations allow for product mix as per market requirements.

In this article on Fundamental Analysis of JSW Steel, we took a look at the industry dynamics industry overview, and information about the company, its manufacturing facilities, projects, distribution network, competitors and moat. Let us now take a look at its financials.

JSW Steel – Financials

Revenue & Profitability

Year	2018	2019	2020	2021	2022
Revenue (Rs. in Crores)	71,933.00	84,757.00	73,326.00	79,839.00	₹ 1,46,371
Profitability (Rs. in Crores)	6,071.00	7,554.00	4,009.00	7,872.00	20,021.00
Net Profit Margin (in %)	8.44 %	8.91 %	5.47 %	9.86 %	13.68 %

JSW Steels’ revenue and profitability show an increasing trend over a period of five years. There was a decrease in its revenue and profitability in 2020 and 2021 because of the pandemic.

There was an economic slowdown in India even before the pandemic. The automobile industry and the real estate industry which are among the major consumers of steel weren’t doing great. The pandemic added to the woes. However, India became the net exporter of steel to China after the initial months of the pandemic. This was unlikely, but it gave a much-needed boost to the industry.

Steel exports accounted for more than ₹ 19,267 crores while imports were at ₹ 16,369 crores by December of 2021. Once the lockdowns eased in India, the demand started gaining momentum.

There is an increasing trend in the company’s net profit margin, from 8.44% in 2018 (FY19) to 13.68% in 2022 (FY23). Its revenue grew at a 3-year CAGR of 19.98% and its net profit grew at a 3-year CAGR of 39.34%.

Recent developments

The Finance Ministry recently scrapped the 15% export tax that it had previously imposed on several steel products to improve its availability in the domestic market and tame prices. This comes as a big relief to the players in the steel industry. In addition, the duty on high-grade iron ore has been cut from 50% to 30% while completely withdrawn for lower grades below 58% iron content.

However, the notification said that coking coal and ferronickel will attract an import duty of 2.5%, while coke and semi-coke will attract a 5% import duty.

Seshagiri Rao, joint MD, JSW Steel & Group CFO commented on this development. He said that it will be a big sentimental booster to revive domestic steel demand particularly when the global steel demand is on a steep decline.

Fundamental Analysis Of JSW Steel – Key Metrics

Particulars	Values	Particulars	Values
Face Value (₹)	1	ROE (%)	35.62
Market Cap (₹ in Cr)	1,71,247.98	Net Profit Margin(%)	13.68
EPS (₹)	31.36	Current Ratio	1.14
Stock P/E (TTM)	22.59	Debt to Equity	1.43
Dividend Yield (%)	2.37	Promoter’s Holdings (%)	45.19

JSW Steel is a large-cap company with a market capitalization of ₹ 1,71,247.98 crores as of November 21, 2022. It has earnings per share of ₹31.36, indicating that ₹ 31.36 is allocated to every individual share of the stock. A high EPS indicates good profitability. It has a good dividend yield of 2.37%.

Its shares were trading at a price-to-equity ratio (P/E) of 22.59 which is higher than the industry P/E. This could mean that the company’s stock is overvalued or its investors are expecting high growth in the future.

Return Ratios

The company has an excellent return on equity of 35.62%. This indicates that the company generates higher profits on the equity that is employed in the company. Further, it has a return on capital employed of 27.34%, indicating that it generates ₹ 27.34 for every ₹ 100 that is deployed in its business.

Debt

JSW Steel has a slightly high debt-to-equity ratio of 1.04, however, companies in this industry are capital-intensive and usually have high debts. On the bright side, it has a high-interest coverage ratio of 6.8, indicating its ability to comfortably provide for interest payments.

Liquidity

JSW Steel has a current ratio of 1.14. This indicates that its current assets are higher than its current liabilities. In a recent corporate presentation, it mentioned that it has cash and cash equivalents of ₹ 13,291 crores.

Credit Ratings

Among International credit rating agencies, Moody’s has a Ba1 (Stable outlook) rating and Fitch has a BB (Stable Outlook) rating. Domestic credit rating agency CARE Ratings, ICRA, and IndRA have an AA rating indicating a stable outlook.

Shareholding

The company’s promoters hold a 45.19% stake in it. Retail investors hold a 34.30%% stake, FIIs hold 10.75% and DIIs hold 9.76%. However, there is a pledge of 15.21 against the promoters’ holding. On the bright side, its promoters have been increasing their stake in the company. Their holding increased from 44.09% in September 2021 to 45.19% in September 2022.

Future Plans of JSW Steel

JSW Steel is planning to invest ₹ 47,457 crores (US$ 6.36 billion) to increase Vijayanagar’s steel plant capacity by 5 MTPA and establish a mining infrastructure in Odisha, in the next three years, starting from June 2021. For the next phase of growth, it plans to achieve 37.5 MTPA steel capacity by FY25. Further, it is looking at realizing full benefits from 5mt Dolvi-II expansion, BPSL expansion, and expanded downstream capacities.

In Closing

In this article, we did a fundamental analysis of JSW Steel. We took a look at the company’s industry dynamics industry overview, and information about the company, its manufacturing facilities, projects, distribution network, competitors, and moat. Then we took a look at the company’s revenue, profits, key metrics, and future plans.

That’s all for this article folks. We hope to see you around. Happy investing until next time!

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Radiant Cash Management IPO Review – Strengths, Weaknesses & More!

Radiant Cash Management IPO Review: Radiant Cash Management Services Limited is coming up with its Initial Public Offering. The IPO will open for subscription on December 23rd, 2022, and close on December 27th, 2022. It is looking to raise Rs 387.94 Crores, out of which Rs 60 Crore will be a fresh issue, and the remaining Rs 327.94 Crore will be an offer for sale.

In this article, we will look at the Radiant Cash Management IPO Review 2022 and analyze its strengths and weaknesses. Keep reading to find out!

Radiant Cash Management IPO Review – About The Company

Radiant Cash Management Services Limited is an integrated cash logistics player with a leading presence in the retail cash management (“RCM”) segment of the cash management services industry in India.  

The company is one of the largest players in the RCM segment in terms of network locations or touch points served as of July 31, 2021. It has a presence 12,150 pin codes in India covering all districts (other than Lakshadweep) with about 42,420 touchpoints.

The clientele of the company includes industries like private and public sector banks, insurance firms, e-commerce logistics players, railways, and retail petroleum distribution outlets.

Business verticals of the Company

• Cash pick-up and delivery: Collection and delivery of cash on behalf of the clients from the end user. 
• Network currency management: Cash collection from the end users and deposit into their current accounts and subsequent transfer to the client’s accounts. 
• Cash processing: Offer value-added cash processing services to our clients. 
• Cash vans / Cash in transit: Offer specially fabricated armored vans, on long-term or ad-hoc hire for movement of cash or bullion within their client’s network. 
• Other value-added services: Offer man-behind counter and currency chest operations to large retail stores and banks. 
• ATM

The competitors of the company

SIS Limited is the only listed peer of the company that provides cash management services, among other services, as per the DRHP of the company.

Radiant Cash Management IPO Review – Financials

(Source: DRHP of the company)

Industry Overview

Cash is still a common and widely accepted payment option in India, which has been a cash economy for decades. Despite the government’s efforts to raise awareness about digital payments, and the bank’s ongoing efforts to register merchants to join the digital payments ecosystem, cash remains the preferred mode of transaction in India.

The Government of India expects nominal GDP to grow at a healthy 12% in the long run which is positively related to Cash in Circulation (CIC). Thus, the Cash in Circulation is expected to reach 50 trillion rupees by FY 2027.

The Indian cash management services market revenue grew at a CAGR of 10% during the period FY 2010 – FY2021, from Rs 10 billion to Rs 27.7 billion. The sector is expected to grow further at a  pace of 19.1%.

Meanwhile, the ATM cash management market size in India is estimated at a size of Rs 14.3 Billion in FY 2021. This is expected to grow at a CAGR of 20.7% to reach a potential market size of Rs 44.3 Billion by FY 2027.

In addition to that, the Dedicated Cash Vans (DCV) market in India is estimated at a value of Rs 6.7 Billion in FY 2021 and is projected to reach a market size of Rs 14.2 Billion by FY 2027.

Strengths

• The company is one of the largest players in the RCM segment in terms of network locations or touch points served.
• The company has a diversified client base with long-standing relationships and the ability to cross-sell value-added services.
• The company has prepared and instituted a robust risk management framework, which consists of multiple layers
• The company has built a robust technological framework with key initiatives that include Automation and API integration, Client view application, QR code Scan, and Mobile Applications.
• The company is led by an experienced management team and backed by a reputed institutional investor.

Weaknesses

• The company is highly dependent on the banking sector in India to generate revenues. Any disruption in the banking sector can disrupt the business of the company.
• The emerging trend of online payment in the country can negatively impact their operations as the use and circulation of cash will decrease.
• The company is highly susceptible to operational risks such as armed robbery, end customer or third-party fraud, theft or embezzlement by employees, and reporting errors.
• The company is subject to seasonal fluctuations in the industries in which the end users operate and lower income in a peak season may have a disproportionate effect on their operations.
• The company requires statutory and regulatory permits, licenses, and approvals for its operations from time to time. Nonrenewal of this may adversely affect the business.

Radiant Cash Management IPO Review- Key IPO Information

Promoters: Col. David Devasahayam and Dr. Renuka David.

Book Running Lead Managers: IIFL Securities Limited, Motilal Oswal Investment Advisors Limited, and YES Securities (India) Limited.

Registrar To The Offer: Link Intime India Private Limited.

Particulars	Details
IPO Size	₹387.94 Crore
Fresh Issue	₹60 Crore
Offer for Sale (OFS)	₹327.94 Crore
Opening date	December 23, 2022
Closing date	December 27, 2022
Face Value	₹1 per share
Price Band	₹94 to ₹99 per share
Lot Size	150 Shares
Minimum Lot Size	1 (150 Shares)
Maximum Lot Size	13 (1950 Shares)
Listing Date	January 4, 2023

The Objective of the Issue

The Net Proceeds from the Fresh Issue are proposed to be utilized for:

• Funding working capital requirements.
• Funding of capital expenditure requirements for the purchase of specially fabricated armoured vans.
• General corporate purposes.

In Closing

In this article, we looked at the details of Radiant Cash Management IPO Review 2022. Analysts remain divided on the IPO and its potential gains. This is a good opportunity for investors to look into the company and analyze its strengths and weaknesses. That’s it for this post.

Are you applying for the IPO? Let us know in the comments below.

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Best Sugar Stocks in India for 2023 – Industry Overview and Complete List

Best Sugar Stocks in India: Fortunately for everyone with a sweet tooth we live in India where a multitude of festivals revolves around sweets. The good news today is that you can also have a sweet tooth for stocks, especially in India.

In this article, we treat you with some insights into the sugar industry and also look into the yummiest and best sugar stocks in India! Keep reading to find out!

Sugar Industry – Overview

The Indian sugar industry is the second largest agro-based industry in the country. The industry supports around 50 million farmers. The sugar industry on the other hand also provides employment to over 6 lakh individuals directly and support many more indirectly. 

However, the Indian sugar industry has a much broader role to play globally. India is the second largest producer of sugar in the world. The country produced 29 million metric tonnes of sugar, second in line after Brazil.

A Goldmine in Ethanol

The Indian sugar industry unlike those in other countries has been dependent on government support. Hence it is also important to look into the policy changes taking place in the industry.

The most important changes currently revolve around ethanol. Ethanol is a biofuel produced naturally through the fermentation of sugars by yeast. Ethanol is used in the production of drugs, plastics, polishers, cosmetics and also as an alternative fuel source. 

Over the last few years, the Indian government has brought about several relief measures that revolve around ethanol. These are a boon to the Indian sugar industry as they could soon reduce their dependence on the government in times when global prices fall.

The relief measures that have a major impact on the sector include the ethanol blending programme, the introduction of MSP and export incentives that are given to sugar companies. 

Due to the increase in petrol prices in the recent past, the government has resorted to increasing the blend of ethanol with petrol. Currently, about 8.5% of ethanol is blended with petrol in India and the government has aims of increasing the amount blended to 20% by the year 2023.

This is huge news for the sugar-producing companies. Currently, the country has a production capacity of 684 crore litres. In order to achieve a 20% blend, the company will have to increase production to 1000 crore litres.

In addition to this, we will also see ethanol-based flex engines and 2-wheelers compliant with 95% ethanol blended petrol will also be rolled out soon thanks to the push from the Modi government. 

QUICK READ – Best Textile Sector Stocks in India 2022 

Best Sugar Stocks in India

The Indian sugar industry is extremely vast and has multiple companies operating in it. Here we take a look at the best sugar stocks in India.

Best Sugar Stocks in India #1 – EID Parry (India) Limited

Particulars
Face value (₹)	1
Market cap (₹)	10,763Cr
EPS (₹)	59.1
Stock P/E	10.4
Dividend yield (%)	1.82
ROE (%)	18.50
Current ratio	1.39
Debt to equity	0.4
Promoters holdings(%)	44.60

Founded in 1788, EID Parry is one of the oldest companies in India and is engaged in the business of Sugar and Nutraceuticals.

The company also set up India’s first sugar plant and is also credited with being one of the first companies to manufacture fertilizers.  Today the company is part of the Murugappa Group which took over EID Parry in 1981. 

After over 2 centuries the company is one the largest sugar companies in the country. The company currently has 9 sugar plants in the country.

These plants have a sugar crushing capacity of 43,400 tonnes of cane per day. In addition to this, its distillery has a capacity of 234 kilolitres per day.

When it comes to the financials the company has continuously increased its profits since 2018 to Rs. 1,572.98 crores in 2022. The company also has a low debt-equity ratio of 0.4.

The promoters of the company hold a 44.61% stake in the company giving it another positive. In terms of MCap, the company is the largest in the industry at Rs. 10,763 crores.

Best Sugar Stocks in India #2 – Balrampur Chini Mills Limited

Particulars
Face value (₹)	1
Market cap (₹)	8,000Cr
EPS (₹)	14.1
Stock P/E	27.6
Dividend yield (%)	0.61
ROE (%)	17.30
Current ratio	2.18
Debt to equity	0.18
Promoters holdings(%)	42.40

Founded in 1975 Balrampur Chinni is one of the largest and most efficient sugar producers in India. The company has 10 manufacturing plants.

Balrampur Chini has an installed crushing capacity of 77,500 tonnes of cane per day. The company earns 82% of its revenues from its sugar business.

The remaining revenues are made up by its distillery and Co-gen poser business. Its distilleries primarily produce alcohol and ethanol. Its distilleries have a capacity to produce 560 kilolitres per day.

Out of all the players in the industry, Balrampur Chini could be the biggest beneficiary of the government’s ethanol policy.

In addition to this, the company is in further plans to capitalise on this. They have invested Rs 425 crores to expand to 1090 kilolitres per day. 

When it comes to the financials one concern however is its declining profits since 2019. The company however has a low debt-equity ratio of 0.18. The company has an MCap of Rs. 8,000 crores.

Best Sugar Stocks in India #3 – Shree Renuka Sugar

Particulars
Face value (₹)	1
Market cap (₹)	13,324Cr
EPS (₹)	-0.26
Stock P/E	--
Dividend yield (%)	0
ROE (%)	--
Current ratio	0.48
Debt to equity	--
Promoters holdings(%)	62.50

Founded in 1998, Shree Renuka Sugars has come a long way in just 2 decades. The company functions through 7 sugar mills. The company has a total capacity of 36,500 tonnes of cane per day. LIke Balrampur Chinni Shree Renuka Sugar is not only engaged in sugar but also ethanol and co-generation.

The company is also one of the largest ethanol producers in the country with an installed capacity of 930 kilolitres per day.
Despite being one of the largest sugar companies in India its financials are a concern. The company has made continuous losses since 2017.

Another red flag is its negative debt-equity ratio because of negative net worth. This is another cause of concern despite it being one of the top producers in India. Despite being one of the largest companies investors must take note of these facts.

Best Sugar Stocks in India #4 –Triveni Engineering and Industries Ltd. 

Particulars
Face value (₹)	1
Market cap (₹)	7,121Cr
EPS (₹)	70
Stock P/E	19.1
Dividend yield (%)	1.1
ROE (%)	24.8
Current ratio	2.99
Debt to equity	0.26
Promoters holdings(%)	68.2

Founded in 1932, Triveni Engineering is one of the largest sugar producers in the country. The company’s product portfolio includes diverse premium quality multi-grade (large, medium, small) crystal, refined and pharmaceutical-grade sugar for use across industries. The company has 7 facilities which are located strategically in Uttar Pradesh. The company has a total capacity of 61,000 tonnes per day. 

In addition to this, the company is also engaged in the production of potable alcohol and fuel-grade ethanol. Their distilleries have a production capacity of 520 kilolitres per day. In addition to this, the company has plans to increase this capacity to 660 kilolitres per day. 

The company has performed well financially increasing its profits from Rs. 119 crores in 2018 to Rs. 335 crores in 2020. In 2022, the company made a profit of Rs. 424 crores. The company also has a debt-equity of 0.26.

Best Sugar Stocks in India #5 – Dalmia Bharat Sugar

Particulars
Face value (₹)	2
Market cap (₹)	3,398Cr
EPS (₹)	21.3
Stock P/E	20.2
Dividend yield (%)	0.96
ROE (%)	13.3
Current ratio	3.26
Debt to equity	0.17
Promoters holdings(%)	74.9

Founded in 1951, Dalmia Bharat Sugar is engaged in the manufacturing of sugar, ethanol, alcohol and generation of power. The company operates through its 5 manufacturing facilities in the country. The company has a total capacity of 39,000 tonnes per day.

The company’s sugar sales account for 77% of revenues, 15% ethanol and 8% from power. The company’s distilleries have a production capacity of 240 kilolitres per day. The company is also in plans to double its ethanol capacity. 

Financially the company has done well increasing its profits since 2018. The company also has a low debt-equity ratio of 0.22.

List of all Sugar Stocks In India

S.No.	Name	Mar Cap Rs. Cr.	P/E	Div Yld %
1	EID Parry	₹ 9,848	10.8	1.98
2	Balrampur Chini	₹ 7,972	17.2	0.63
3	Sh. Renuka Sugar	₹ 10,483	N/A	N/A
4	Triven. Engg. Ind.	₹ 6,085	14.2	1.30
5	Bannari Amman Sug.	₹ 3,150	39.4	0.39
6	Dalmia Bharat	₹ 2,926	13.4	1.11
7	Dhampur Sugar	₹ 1,516	9.87	2.66
8	Bajaj Hindusthan	₹ 1,387	N/A	N/A
9	Dwarikesh Sugar	₹ 2,159	12.8	1.71
10	Avadh Sugar	₹ 1,125	9.09	1.80

ALSO READ

Best Chemical Sector Stocks in India – Overview & Complete List

In Closing 

The Sugar industry has been finally reaping its benefits this year. The shares mentioned above have turned into multi-baggers offering returns ranging from 157% to 84%.

The new ethanol measures discussed above have only added to this potential. In addition to this, CRISIL also reported a sugar production crisis in Brazil due to the weather conditions this year. This could further positively influence the exports of sugar from India. 

Investors however must also stay up to date with the upcoming reforms from the government and the cyclical nature of the industry. That’s all for this post, let us know what you think about this article on Best Sugar Stocks in India and your top pics in the comments below!. Happy Investing!

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The post Best Sugar Stocks in India for 2023 – Industry Overview and Complete List appeared first on Trade Brains.

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