Gayatri Sugars Limited

Consumer Defensive — Confectioners · BSE

₹9.07+₹0.90 (+11.02%)

DalalBaazaar Score

37 / 100

🔴 Weak

Verdict

CAUTION

Risk

Very High

Driven by moderate debt load, short-term liabilities exceed short-term assets, the company is currently loss-making.

In simple words: The company is currently losing money, but sales are shrinking. Short-term liquidity is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 8:27 pm

Understanding the Business

Company site ↗

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

What does this company do?

Gayatri Sugars Limited manufactures and sells sugar and allied products in India. It operates through Sugar and Distillery segments.

IndustryConfectioners

SectorConsumer Defensive

Employees654

Annual revenue₹363 Cr

How does it make money?

Turns over ₹363 Cr a year. Of every ₹100 of sales, about ₹0 reaches shareholders as profit, with ₹6 left at the operating level before interest, tax and depreciation. Each of its 654 employees supports ₹55.5 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹55.5 lakh

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 5.4% 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 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 -5% while net margin moved -97% 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-5%

Margin effect-97%

DalalBaazaar Score

37/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 1.7% a year
✗ Profit has declined at 69.1% a year
✗ Latest-year revenue growth of -11.9% is below the longer-term trend — momentum is fading
✗ Profit fell 5.7% in the latest year

Quality vs. Valuation

Company Quality

33/ 100

Weak

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

Valuation

54/ 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.

vs. its own history

Not enough price and earnings history

vs. sector peers

Not enough peers with a usable P/E

vs. generic bands

N/A

No P/E — the company is lossmaking

EV/EBITDA

6.6x

PEG

—

What's Good / What's Bad

🟢 What's Going Well3

Debt is being paid down
Total debt is down 28% over 3 years.
Cash generation is improving
Free cash flow is up 54% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

5 items require attention · 1 high · 4 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only 1.1x — little room if earnings dip.
🟡Profit is decliningFinancial
Net profit is down 97% over 3 years.
🟡Margins are compressingFinancial
EBITDA margin is down 4.3 points over 3 years.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 70% over 3 years — each existing share owns a smaller slice of the company.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.61 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 28% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
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 10.6% to 6.2%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The debt load needs earnings to hold up
Debt is 3.7x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
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 4%✓ 6.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 3.7x
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✗ 1.1x
How much operating profit can fall before interest stops being comfortably covered.
4Free cash flow remains positive✓ ₹47 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 8%✗ 5.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

3 / 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 · 3 neutral · 6 weak

Market Cap

₹67 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

Not meaningful

Loss-making

Earnings are negative, so a P/E multiple can't be read here

P/B Ratio

0.83x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹-1.74

Loss-making

Negative earnings per share — the business is losing money

ROE

1.2%

Weak

Weak capital efficiency

ROCE

5.4%

Weak

Low return on total capital employed

Debt/Equity

1.36x

Moderate

Moderate leverage

Revenue Growth (YoY)

-11.9%

Shrinking

Sales are contracting

Profit Growth (YoY)

-5.7%

Falling

Profits are shrinking

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

₹47 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

-50.6%

Weak

Thin margins leave little room for error

Net Margin

0.1%

Weak

Very little revenue reaches the bottom line

Current Ratio

0.61

Tight

Tight short-term liquidity

Beta (vs Nifty)

-0.23

Defensive

Steadier than the market

52W Range Position

26%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

7.5 / 8.0

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

73.2

Overbought zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹383 Cr	₹377 Cr	₹335 Cr	₹363 Cr	-1.7%
EBITDA	₹40 Cr	₹38 Cr	₹25 Cr	₹23 Cr	-17.6%
EBITDA Margin	10.6%	10.1%	7.5%	6.2%	—
PAT (Net Profit)	₹34 Cr	₹7 Cr	₹1 Cr	₹1 Cr	-69.1%
EPS	₹4.05	₹0.57	₹0.11	₹0.1	-70.9%
ROCE	—	72.9%	22.9%	5.4%	—
Total Debt	₹115 Cr	₹131 Cr	₹116 Cr	₹83 Cr	-10.2%
Free Cash Flow	₹31 Cr	₹19 Cr	-₹0 Cr	₹47 Cr	+15.4%

🟡 Revenue has been broadly flat over 3 years (-1.7% a year).

🔴 EBITDA has shrunk at 17.6% a year over 3 years.

🔴 EBITDA Margin has fallen from 10.6% to 6.2% over 3 years (-4.3 pts).

🔴 PAT (Net Profit) has shrunk at 69.1% a year over 3 years.

🔴 EPS has shrunk at 70.9% a year over 3 years.

🔴 ROCE has fallen from 72.9% to 5.4% over 3 years (-67.5 pts).

🟢 Total Debt has shrunk at 10.2% a year over 3 years.

🟢 Free Cash Flow has grown at 15.4% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹458 Cr

Total Liabilities

₹376 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹52 Cr

Capex

-₹5 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

48.7%

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 mixed3 negative2 general

Gayatri Sugars promoters release pledge on 59 lakh shares after debt clearance

scanx.trade, 05 OctOwnership

🔴Potentially negativePromoter selling or pledging is a signal worth understanding, though the reason is often personal rather than about the business.

Gayatri Sugars promoters disclose release of 59.12 lakh pledged shares after debt clearance

ChiniMandi, 05 OctOwnership

🔴Potentially negativePromoter selling or pledging is a signal worth understanding, though the reason is often personal rather than about the business.

Gayatri Sugars Q1 Results: Net loss widens to ₹1,909 lakh

scanx.trade, 11 AugResults

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

Shree Renuka Sugars, Dalmia Bharat: Sugar stocks sweeten after government approves additional export quota

Upstox, 16 Mar

Sebi imposes fine of Rs 77 lakh on 16 entities involved in Gayatri Sugars share price manipulation

CNBC TV18, 31 MayRegulatory

🔴Potentially negativeRegulatory and legal actions carry a financial cost and a governance question. The second usually matters more than the first.

Sebi slaps Rs 77 lakh on 16 entities for manipulating share price of Gayatri Sugars

The Times of India, 31 May

Watch Items

Revenue growth is negative (-11.9%) on the latest reported period — check if this is one-off or a trend.
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 · Valuation · Risk

WeakBusiness Quality · Growth · Profitability

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. 1 high-severity red flag sits above this conclusion and should be read first.

3 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Interest cover stays above 3x; ROCE stays above 8% · see Key things to watch ↑