K.M. Sugar Mills Limited

Consumer Defensive — Confectioners · NSE

₹28.50+₹0.06 (+0.21%)

DalalBaazaar Score

69 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

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

In simple words: Strong business and financial position, but sales are shrinking. The direction of profits is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:09 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

Company site ↗

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

What does this company do?

K.M. Sugar Mills Limited engages in manufacturing and sells of sugar in India. The company operates through Sugar and Distillery segments. It also produces and sells various grades of sugar in jute bags and PP bags; and rectified spirit, ethanol, and extra neutral alcohol.

IndustryConfectioners

SectorConsumer Defensive

Employees305

Annual revenue₹658 Cr

How does it make money?

Turns over ₹658 Cr a year. Of every ₹100 of sales, about ₹8 reaches shareholders as profit, with ₹15 left at the operating level before interest, tax and depreciation. Each of its 305 employees supports ₹2.16 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin15.0%

Net margin8.1%

Revenue / employee₹2.16 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.

HINDUSTAN UNILEVER LTD.P/E 42.5x · ROE 21.5%

ITC LTDP/E 16.6x · ROE 27.4%

NESTLE INDIA LIMITEDP/E 59.8x · ROE 79.9%

BRITANNIA INDUSTRIES LTDP/E 44.1x · ROE 51.0%

What is its competitive advantage?Some evidence

ROCE of 20.4% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

ROCE20.4%

ROE13.6%

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 +16% while net margin moved +98% 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+16%

Margin effect+98%

DalalBaazaar Score

69/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.06 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal

Quality vs. Valuation

Company Quality

66/ 100

Good

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.

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

5.4x

3Y Median

9.5x

40 monthly readings · mean 9.9x · range 4.9x–16.9x

Sector Median

43.3x

median of 4 sector peers

🟢Current valuation is approximately 42% below its 3y median of 9.5x. 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 87% below the peer median of 43.3x.

vs. its own history

Cheap

9.5x median over 40 months · -42%

vs. sector peers

Cheap

43.3x median of 4 peers · -87%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

5.4x

P/B

0.67x

EV/EBITDA

5.2x

PEG

0.17

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well7

Margins are improving
EBITDA margin is up from 10.1% to 15.0% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Return on equity is rising
ROE has improved from 8.4% to 13.6%.
Return on capital is rising
ROCE has improved from 13.1% to 20.4%.
High return on capital employed
ROCE of 20.4% is the mark of a business that converts capital into profit efficiently.
Valuation below its historical average
At 5.4x the stock trades 42% below its own median of 9.5x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Receivables growing faster than sales
Receivables are up 189% against revenue growth of 16% — customers are taking longer to pay.

Red Flags

1 item require attention · 1 high

🔴Receivables growing faster than salesFinancial
Receivables up 189% against revenue up 16% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 20.4% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from 10.1% to 15.0%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 42% 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 87% 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?

Sales are being booked faster than collected
Receivables are up 189% against revenue up 16%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Growth barely outpaces inflation
Revenue compounding at 5.1% 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.
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 13%✓ 15.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA stays below 2x✗ 2.5x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
3Revenue growth stays above 4% a year✓ 5.1% CAGR
Latest reported year was -8.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
4Free cash flow remains positive✓ ₹37 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 17%✓ 20.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

6 / 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

5 good · 4 neutral · 2 weak

Market Cap

₹262 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

5.4x

Cheap

Cheap against the generic band

P/B Ratio

0.67x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹5.23

Profitable

Profitable on a per-share basis

ROE

13.6%

Moderate

Moderate capital efficiency

ROCE

20.4%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.64x

Moderate

Moderate leverage

Revenue Growth (YoY)

-8.8%

Shrinking

Sales are contracting

Profit Growth (YoY)

-40.6%

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

₹37 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹28.5

Operating Margin

5.5%

Average

Average margins

Net Margin

7.5%

Average

Average bottom-line conversion

Current Ratio

1.21

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.06

Defensive

Steadier than the market

52W Range Position

41%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

28.8 / 29.8

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

35.8

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹567 Cr	₹657 Cr	₹656 Cr	₹658 Cr	+5.1%
EBITDA	₹57 Cr	₹77 Cr	₹92 Cr	₹99 Cr	+20.0%
EBITDA Margin	10.1%	11.7%	13.9%	15.0%	—
PAT (Net Profit)	₹23 Cr	₹28 Cr	₹36 Cr	₹53 Cr	+32.0%
EPS	₹2.52	₹3.05	₹3.86	₹5.81	+32.1%
ROE	8.4%	9.3%	10.5%	13.6%	—
ROCE	13.1%	15.9%	17.9%	20.4%	—
Total Debt	₹268 Cr	₹291 Cr	₹282 Cr	₹250 Cr	-2.3%
Free Cash Flow	-₹3 Cr	₹3 Cr	₹16 Cr	₹37 Cr	—

🟢 Revenue has grown at 5.1% a year over 3 years.

🟢 EBITDA has grown at 20.0% a year over 3 years.

🟢 EBITDA Margin has risen from 10.1% to 15.0% over 3 years (+4.9 pts).

🟢 PAT (Net Profit) has grown at 32.0% a year over 3 years.

🟢 EPS has grown at 32.1% a year over 3 years.

🟢 ROE has risen from 8.4% to 13.6% over 3 years (+5.2 pts).

🟢 ROCE has risen from 13.1% to 20.4% over 3 years (+7.3 pts).

🟢 Total Debt has shrunk at 2.3% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹3 Cr to ₹37 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹750 Cr

Total Liabilities

₹358 Cr

Total Debt

₹250 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

₹89 Cr

Capex

-₹52 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

75.5%

Corporate Actions

Ex-Dividend Date

18 Aug 2021

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 mixed5 general

K.M. Sugar Mills Upper Circuit Today: Price, Data and Peers

Univest, 12 Oct

K.M. Sugar Mills Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 04 Sept

KM Sugar Mills confirms spirit unit ceases subsidiary status post demerger

scanx.trade, 12 Oct

Sugar Stocks Jump: Dalmia Bharat, Balrampur Chini, Shree Renuka & Others Surge Up To 13%

NDTV Profit, 25 Sept

KM Sugar Mills Consolidated June 2026 Net Sales at Rs 189.93 crore, down 8.79% Y-o-Y

Moneycontrol.com, 20 Aug

KM Sugar Mills closes trading window from Oct 1 ahead of Q2FY27 results

scanx.trade, 23 SeptResults

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

Watch Items

Revenue growth is negative (-8.8%) 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.

DalalBaazaar Thesis

🟢Business QualityStrong13.9/20

🟢Financial HealthStrong15.3/20

🟡GrowthModest11.3/20

🟡ProfitabilityModerate9.6/15

🟢ValuationAttractive13.2/15

🟡RiskModerate5.2/10

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last. 1 high-severity red flag sits above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 13%15.0%
✗Debt / EBITDA stays below 2x2.5x
✓Revenue growth stays above 4% a year5.1% CAGR
✓Free cash flow remains positive₹37 Cr
✓ROCE stays above 17%20.4%