K.C.P. Sugar and Industries Corporation Limited

Consumer Defensive — Confectioners · NSE

₹25.49−₹0.22 (−0.86%)

DalalBaazaar Score

47 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

Driven by negative free cash flow, 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 both sales and profits growing well. Cash generation is currently 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 K.C.P. Sugar and Industries Corporation Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

K.C.P. Sugar and Industries Corporation Limited, together with its subsidiaries, manufactures and sells sugar and related products in India.

IndustryConfectioners

SectorConsumer Defensive

Employees468

Annual revenue₹260 Cr

How does it make money?

Turns over ₹260 Cr a year. Of every ₹100 of sales, about ₹4 reaches shareholders as profit, with ₹5 left at the operating level before interest, tax and depreciation. Each of its 468 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 4.2% 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 -10% while net margin moved -79% 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-10%

Margin effect-79%

DalalBaazaar Score

47/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 3.5% a year
✗ Profit has declined at 42.4% a year

Quality vs. Valuation

Company Quality

41/ 100

Weak

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

Valuation

67/ 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

7.5x

3Y Median

8.7x

40 monthly readings · mean 13.5x · range 5.6x–33.2x

Sector Median

43.3x

median of 4 sector peers

🟢Current valuation is approximately 13% below its 3y median of 8.7x. 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 83% below the peer median of 43.3x.

vs. its own history

Fair

8.7x median over 40 months · -13%

vs. sector peers

Cheap

43.3x median of 4 peers · -83%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

30.0x

PEG

—

What's Good / What's Bad

🟢 What's Going Well3

Debt is being paid down
Total debt is down 30% over 3 years.
Very low debt
Debt/Equity of 0.28x 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 15.6% to 2.4% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 19.4% to 4.2% — often a sign of competition or overexpansion.

Red Flags

3 items require attention · 1 high · 2 watch

🔴Receivables growing faster than salesFinancial
Receivables up 160% against revenue up -10% — sales are being booked faster than they are collected.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹36 Cr in the latest year.
🟡Profit is decliningFinancial
Net profit is down 81% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 30% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Cheaper than its peers
It trades 83% 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 9.5x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Sales are being booked faster than collected
Receivables are up 160% against revenue up -10%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Returns on shareholder capital are falling
ROE has dropped from 15.6% to 2.4%. 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 3%✓ 5.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 9.5x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Free cash flow remains positive✗ -₹36 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✓ 3.3x
How much operating profit can fall before interest stops being comfortably covered.
5ROCE stays above 8%✗ 4.2%
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 · 2 neutral · 3 weak

Market Cap

₹291 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

7.5x

Cheap

Cheap against the generic band

P/B Ratio

0.63x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹3.38

Profitable

Profitable on a per-share basis

ROE

2.4%

Weak

Weak capital efficiency

ROCE

4.2%

Weak

Low return on total capital employed

Debt/Equity

0.28x

Low

Conservative leverage

Revenue Growth (YoY)

31.4%

Healthy

Healthy top-line growth

Profit Growth (YoY)

141.4%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.39%

Modest

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

Free Cash Flow

-₹36 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

2.2%

Weak

Thin margins leave little room for error

Net Margin

13.7%

Good

Strong bottom-line conversion

Current Ratio

2.74

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.06

Defensive

Steadier than the market

52W Range Position

27%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

26.9 / 29.7

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

28.0

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹289 Cr	₹345 Cr	₹310 Cr	₹260 Cr	-3.5%
EBITDA	₹15 Cr	₹34 Cr	₹27 Cr	₹13 Cr	-3.9%
EBITDA Margin	5.2%	9.7%	8.7%	5.2%	—
PAT (Net Profit)	₹58 Cr	₹66 Cr	₹14 Cr	₹11 Cr	-42.4%
EPS	₹5.13	₹5.83	₹1.27	₹0.98	-42.4%
ROE	15.6%	15.1%	3.2%	2.4%	—
ROCE	19.4%	18.0%	7.0%	4.2%	—
Total Debt	₹184 Cr	₹147 Cr	₹99 Cr	₹128 Cr	-11.4%
Free Cash Flow	-₹2 Cr	₹36 Cr	₹42 Cr	-₹36 Cr	—

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

🔴 EBITDA has shrunk at 3.9% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 5.2% over 3 years.

🔴 PAT (Net Profit) has shrunk at 42.4% a year over 3 years.

🔴 EPS has shrunk at 42.4% a year over 3 years.

🔴 ROE has fallen from 15.6% to 2.4% over 3 years (-13.2 pts).

🔴 ROCE has fallen from 19.4% to 4.2% over 3 years (-15.1 pts).

🟢 Total Debt has shrunk at 11.4% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹660 Cr

Total Liabilities

₹200 Cr

Cash & Equivalents

₹15 Cr

Operating Cash Flow

-₹31 Cr

Capex

-₹5 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

45.1%

Corporate Actions

Dividend Rate

₹0.1

Ex-Dividend Date

17 Sept 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

2 positive1 mixed3 general

K.C.P. Sugar And Industries Corporation Upper Circuit Today

Univest, 06 Oct

KCP Sugar unit wins Rs 257 Cr order from Hyundai Engineering

scanx.trade, 20 JulOrder win

🟢Potentially positiveAn order or contract win, which adds to future revenue. How much depends on its size against annual sales and on when it is executed.

KCP Sugar & Industries Corporation consolidated net profit rises 141.51% in the June 2026 quarter

Business Standard, 12 AugResults

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

Is K.C.P. Sugar and Industries (NSE:KCPSUGIND) A Risky Investment?

Simply Wall Street, 22 Jan

K.C.P. Sugar And Industries Corporation Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 27 Aug

KCP Sugar Shares Slip Nearly 5% as KCPSUGIND.NS Retests Lower Support - Bullish Sentiment

siam.in, 16 SeptAnalyst view

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

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongFinancial Health · Valuation

MiddlingProfitability

WeakBusiness Quality · Growth · Risk

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; Free cash flow remains positive; ROCE stays above 8% · see Key things to watch ↑