The Andhra Sugars Limited

Basic Materials — Chemicals · NSE

₹88.70+₹0.21 (+0.24%)

DalalBaazaar Score

51 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Low

Driven by micro-cap size, which brings thin liquidity.

In simple words: The business is earning a fairly low return on the money invested in it, with modest growth. Nothing obvious stands out as stretched — the usual checks on business quality and management still apply.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:02 pm

Understanding the Business

Company site ↗

The 60-second version of The Andhra Sugars Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

The Andhra Sugars Limited, together with its subsidiaries, manufactures and sells organic and inorganic chemicals in India. It operates through Sugars, Chlor Alkali, Power Generation, Industrial Chemicals, and Others segments.

IndustryChemicals

SectorBasic Materials

Employees1,687

Annual revenue₹2,460 Cr

How does it make money?

Turns over ₹2,460 Cr a year. Of every ₹100 of sales, about ₹3 reaches shareholders as profit, with ₹9 left at the operating level before interest, tax and depreciation. Each of its 1,687 employees supports ₹1.46 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.46 Cr

Who are its competitors?

The closest listed comparisons in its industry are PIDILITE INDUSTRIES LTD, SRF LTD, UPL LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 6.4% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE15.4%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +4% while net margin moved -57% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+4%

Margin effect-57%

DalalBaazaar Score

51/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 1.4% — barely ahead of inflation
✗ Profit has declined at 23.5% a year

Quality vs. Valuation

Company Quality

44/ 100

Weak

How good the business is, ignoring the share price entirely.

Valuation

88/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

Optically cheap, but the underlying business scores poorly. Cheap-and-weak is what a value trap looks like from the outside — the low price may be deserved.

Historical Valuation

Current P/E

11.5x

3Y Median

15.2x

40 monthly readings · mean 21.1x · range 6.8x–51.1x

Sector Median

33.8x

median of 3 sector peers

🟢Current valuation is approximately 24% below its 3y median of 15.2x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 66% below the peer median of 33.8x.

vs. its own history

Cheap

15.2x median over 40 months · -24%

vs. sector peers

Cheap

33.8x median of 3 peers · -66%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

5.3x

PEG

—

What's Good / What's Bad

🟢 What's Going Well4

Debt is being paid down
Total debt is down 98% over 3 years.
Cash generation is improving
Free cash flow is up 223% over 3 years.
Very low debt
Debt/Equity of 0.03x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 12.1% to 5.0% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 13.6% to 6.4% — often a sign of competition or overexpansion.

Red Flags

3 items require attention · 3 watch

🟡Profit is decliningFinancial
Net profit is down 55% over 3 years.
🟡Margins are compressingFinancial
EBITDA margin is down 4.6 points over 3 years.
🟡Low reported insider holdingOwnership
Reported insider holding is 0.0%. For Indian companies this field is an unreliable proxy — check the official promoter shareholding in the exchange filing.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 98% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Priced below its own history
The stock trades 24% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 66% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹223 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 13.7% to 9.1%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Growth barely outpaces inflation
Revenue compounding at 1.4% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
Returns on shareholder capital are falling
ROE has dropped from 12.1% to 5.0%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 7%✓ 9.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Revenue growth stays above 4% a year✗ 1.4% CAGR
Latest reported year was 4.6%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
3Free cash flow remains positive✓ ₹223 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.0x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 8%✗ 6.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

7 / 11 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

6 good · 3 neutral · 2 weak

Market Cap

₹1,202 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

11.5x

Cheap

Cheap against the generic band

P/B Ratio

0.72x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹7.68

Profitable

Profitable on a per-share basis

ROE

5.0%

Weak

Weak capital efficiency

ROCE

6.4%

Weak

Low return on total capital employed

Debt/Equity

0.03x

Low

Conservative leverage

Revenue Growth (YoY)

4.6%

Modest

Modest growth

Profit Growth (YoY)

94.2%

Healthy

Profits growing at a healthy clip

Dividend Yield

1.13%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹223 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

8.5%

Average

Average margins

Net Margin

4.2%

Average

Average bottom-line conversion

Current Ratio

4.79

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.44

Defensive

Steadier than the market

52W Range Position

55%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

92.6 / 95.7

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

34.4

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹2,356 Cr	₹1,891 Cr	₹2,014 Cr	₹2,460 Cr	+1.4%
EBITDA	₹322 Cr	₹139 Cr	₹146 Cr	₹223 Cr	-11.6%
EBITDA Margin	13.7%	7.4%	7.3%	9.1%	—
PAT (Net Profit)	₹186 Cr	₹75 Cr	₹26 Cr	₹83 Cr	-23.5%
EPS	₹13.72	₹5.54	₹1.91	₹6.14	-23.5%
ROE	12.1%	4.7%	1.6%	5.0%	—
ROCE	13.6%	3.7%	2.4%	6.4%	—
Total Debt	₹24 Cr	₹31 Cr	₹13 Cr	₹1 Cr	-71.3%
Free Cash Flow	₹69 Cr	₹7 Cr	₹32 Cr	₹223 Cr	+47.9%

🟡 Revenue has been broadly flat over 3 years (1.4% a year).

🔴 EBITDA has shrunk at 11.6% a year over 3 years.

🔴 EBITDA Margin has fallen from 13.7% to 9.1% over 3 years (-4.6 pts).

🔴 PAT (Net Profit) has shrunk at 23.5% a year over 3 years.

🔴 EPS has shrunk at 23.5% a year over 3 years.

🔴 ROE has fallen from 12.1% to 5.0% over 3 years (-7.1 pts).

🔴 ROCE has fallen from 13.6% to 6.4% over 3 years (-7.2 pts).

🟢 Total Debt has shrunk at 71.3% a year over 3 years.

🟢 Free Cash Flow has grown at 47.9% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹2,174 Cr

Total Liabilities

₹403 Cr

Cash & Equivalents

₹31 Cr

Operating Cash Flow

₹278 Cr

Capex

-₹55 Cr

Shareholding (proxy)

Institutional Holding

0.8%

Insider Holding

0.0%

Corporate Actions

Dividend Rate

₹1

Ex-Dividend Date

18 Sept 2026

Peer Comparison

Company	P/E	ROE
PIDILITE INDUSTRIES LTD	57.8x	24.4%
SRF LTD	33.8x	15.4%
UPL LIMITED	21.5x	6.1%

Recent News

2 positive2 mixed2 general

Andhra Sugars vs Nifty 50: 1Y Return +17.68% vs -9.64%

Univest, 14 Oct

Andhra Sugars Ltd Share Price Target, Forecast for Long Term Equity.

HDFC Sky, 27 AprAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Andhra Sugars reports FY26 profit surge, declares dividend

scanx.trade, 30 MayCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Statutory Profit Doesn't Reflect How Good Andhra Sugars' (NSE:ANDHRSUGAR) Earnings Are

Simply Wall Street, 07 JunResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Andhra Sugars consolidated net profit rises 94.09% in the June 2026 quarter

Business Standard, 08 AugResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Andhra Sugars reports standalone net profit to Rs 83.67 crore in 2025-26

ChiniMandi, 30 May

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
Reported insider holding is low — cross-check the official promoter shareholding % in the company's exchange filing.

DalalBaazaar Thesis

StrongFinancial Health · Valuation

WeakBusiness Quality · Growth · Profitability · Risk

Points for each in the Score ↑

Cheap, but for a reason

The low price is the whole case here, and the business underneath scores poorly. Cheap-and-weak is what a value trap looks like from the outside — it needs a specific reason the numbers are about to improve, not just the observation that they are low.

2 of 5 tripwires tripped — Revenue growth stays above 4% a year; ROCE stays above 8% · see Key things to watch ↑