Avadh Sugar & Energy Limited

Consumer Defensive — Confectioners · NSE

₹994.20+₹23.95 (+2.47%)

DalalBaazaar Score

36 / 100

🔴 Weak

Verdict

CAUTION

Risk

High

Driven by moderate debt load, micro-cap size, which brings thin liquidity, falling profits.

In simple words: The business is earning a fairly low return on the money invested in it, though profits are falling even as sales grow. The direction of profits is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:00 pm

Understanding the Business

Company site ↗

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

What does this company do?

Avadh Sugar & Energy Limited manufactures and sells sugar and its by-products in India. The company operates through Sugar, Distillery, Co-generation, and Others segments. It offers molasses, bagasse, and press-mud products.

IndustryConfectioners

SectorConsumer Defensive

Employees824

Annual revenue₹2,690 Cr

How does it make money?

Turns over ₹2,690 Cr a year. Of every ₹100 of sales, about ₹2 reaches shareholders as profit, with ₹9 left at the operating level before interest, tax and depreciation. Each of its 824 employees supports ₹3.26 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹3.26 Cr

Who are its competitors?

The closest listed comparisons in its industry are HINDUSTAN UNILEVER LTD., ITC LTD, NESTLE INDIA LIMITED, BRITANNIA INDUSTRIES LTD. 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 10.3% 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 ROE51.0%

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 -41% 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-41%

DalalBaazaar Score

36/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 1.2% a year
✗ Profit has declined at 17.0% a year
✗ Profit fell 34.8% in the latest year

Quality vs. Valuation

Company Quality

33/ 100

Weak

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

Valuation

56/ 100

Fair

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

Weak on business quality and not cheap enough to compensate.

Historical Valuation

Current P/E

30.2x

3Y Median

10.6x

40 monthly readings · mean 12.5x · range 5.8x–34.8x

Sector Median

43.3x

median of 4 sector peers

⚠️Current valuation is approximately 184% above its 3y median of 10.6x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

🟢Against its sector it trades 30% below the peer median of 43.3x.

vs. its own history

Expensive

10.6x median over 40 months · +184%

vs. sector peers

Cheap

43.3x median of 4 peers · -30%

vs. generic bands

Fair

15x–35x

EV/EBITDA

14.6x

PEG

—

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 11.2% to 5.1% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 17.2% to 10.3% — often a sign of competition or overexpansion.

Red Flags

3 items require attention · 3 watch

🟡Debt is increasingFinancial
Total debt is up 32% over 3 years.
🟡Profit is decliningFinancial
Net profit is down 43% over 3 years.
🟡Inventory building faster than salesFinancial
Inventory up 32% against revenue up -4% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Cheaper than its peers
It trades 30% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
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?

The debt load needs earnings to hold up
Debt is 6.1x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
The price already assumes success
The stock trades 184% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
Returns on shareholder capital are falling
ROE has dropped from 11.2% to 5.1%. 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.
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%✓ 8.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 6.1x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Interest cover stays above 3x✗ 2.2x
How much operating profit can fall before interest stops being comfortably covered.
4Free cash flow remains positive✓ ₹49 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 8%✓ 10.3%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

5 / 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

2 good · 7 neutral · 2 weak

Market Cap

₹1,990 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

30.2x

Fair

Fairly valued against the generic band

P/B Ratio

1.77x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹32.95

Profitable

Profitable on a per-share basis

ROE

5.1%

Weak

Weak capital efficiency

ROCE

10.3%

Moderate

Moderate return on the capital in the business

Debt/Equity

1.25x

Moderate

Moderate leverage

Revenue Growth (YoY)

8.7%

Modest

Modest growth

Profit Growth (YoY)

-34.8%

Falling

Profits are shrinking

Dividend Yield

1.01%

Modest

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

Free Cash Flow

₹49 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

2.7%

Weak

Thin margins leave little room for error

Net Margin

2.4%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.16

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.06

Defensive

Steadier than the market

52W Range Position

96%

Near high

Near its 52-week high

Technical Snapshot

SMA 20 / SMA 50

854.9 / 795.6

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

77.9

Overbought zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹2,791 Cr	₹2,685 Cr	₹2,628 Cr	₹2,690 Cr	-1.2%
EBITDA	₹258 Cr	₹334 Cr	₹280 Cr	₹232 Cr	-3.5%
EBITDA Margin	9.2%	12.4%	10.6%	8.6%	—
PAT (Net Profit)	₹100 Cr	₹128 Cr	₹88 Cr	₹57 Cr	-17.0%
EPS	₹50.07	₹64	₹43.93	₹28.63	-17.0%
ROE	11.2%	12.5%	8.0%	5.1%	—
ROCE	17.2%	20.3%	14.7%	10.3%	—
Total Debt	₹1,068 Cr	₹1,317 Cr	₹1,371 Cr	₹1,407 Cr	+9.6%
Free Cash Flow	₹230 Cr	-₹156 Cr	₹47 Cr	₹49 Cr	-40.4%

🟡 Revenue has been broadly flat over 3 years (-1.2% a year).

🔴 EBITDA has shrunk at 3.5% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 8.6% over 3 years.

🔴 PAT (Net Profit) has shrunk at 17.0% a year over 3 years.

🔴 EPS has shrunk at 17.0% a year over 3 years.

🔴 ROE has fallen from 11.2% to 5.1% over 3 years (-6.2 pts).

🔴 ROCE has fallen from 17.2% to 10.3% over 3 years (-6.8 pts).

🔴 Total Debt has grown at 9.6% a year over 3 years.

🔴 Free Cash Flow has shrunk at 40.4% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹2,880 Cr

Total Liabilities

₹1,756 Cr

Cash & Equivalents

₹2 Cr

Operating Cash Flow

₹158 Cr

Capex

-₹109 Cr

Shareholding (proxy)

Institutional Holding

0.4%

Insider Holding

71.4%

Corporate Actions

Dividend Rate

₹10

Ex-Dividend Date

17 Jul 2026

Peer Comparison

Company	P/E	ROE
HINDUSTAN UNILEVER LTD.	42.5x	21.5%
ITC LTD	16.6x	27.4%
NESTLE INDIA LIMITED	59.8x	79.9%
BRITANNIA INDUSTRIES LTD	44.1x	51.0%

Recent News

1 positive5 general

Avadh Sug & Energy Share Price

Upstox, 16 Oct

Avadh Sugar & Energy Ltd. 52 Week High Streak: Key View

Univest, 09 Oct

Avadh Sugar & Energy Ltd is Rated Sell

MarketsMojo, 14 Oct

Just Three Days Till Avadh Sugar & Energy Limited (NSE:AVADHSUGAR) Will Be Trading Ex-Dividend

Simply Wall Street, 13 JulCapital return

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

Sugar stocks: Avadh Sugar, Bajaj Hind gain over 6% on duty-free import plan

Business Standard, 20 Aug

Avadh Sugar & Energy Clarifies Recent Share Price Movement to BSE

scanx.trade, 06 Mar

Watch Items

Trading very close to its 52-week high — momentum-driven entries here carry more mean-reversion risk.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in overbought territory — momentum entries here carry more short-term pullback risk.

DalalBaazaar Thesis

MiddlingFinancial Health · Risk

WeakBusiness Quality · Growth · Profitability · Valuation

Points for each in the Score ↑

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation.

2 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Interest cover stays above 3x · see Key things to watch ↑