Rana Sugars Limited

Consumer Defensive — Confectioners · NSE

₹13.21−₹0.04 (−0.30%)

DalalBaazaar Score

42 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

Driven by 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, 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, 6:59 pm

Understanding the Business

Company site ↗

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

What does this company do?

Rana Sugars Limited engages in the manufacture of sugar, ethanol, and co-generation of power in India. It operates through three segments: Sugar Manufacturing, Ethanol/ENA Manufacturing, and Power Generation. The company offers sugar, molasses, and bagasse.

IndustryConfectioners

SectorConsumer Defensive

Employees1,006

Annual revenue₹1,717 Cr

How does it make money?

Turns over ₹1,717 Cr a year. Of every ₹100 of sales, about ₹1 reaches shareholders as profit, with ₹4 left at the operating level before interest, tax and depreciation. Each of its 1,006 employees supports ₹1.71 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.71 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 8.3% 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 +7% while net margin moved -65% 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+7%

Margin effect-65%

DalalBaazaar Score

42/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROCE of 8.3% is below 10% — capital is not working hard
✗ ROCE has fallen by 6.2 points — returns are eroding
✗ EBITDA margin of 3.6% is thin — little cushion if costs rise
✗ Net margin of 0.3% is slim
• Revenue has compounded at 2.1% a year, which is the base these returns are earned on

Quality vs. Valuation

Company Quality

39/ 100

Weak

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

Valuation

51/ 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

35.7x

3Y Median

6.3x

40 monthly readings · mean 7.2x · range 4.7x–12.8x

Sector Median

43.3x

median of 4 sector peers

⚠️Current valuation is approximately 465% above its 3y median of 6.3x. 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 17% below the peer median of 43.3x.

vs. its own history

Expensive

6.3x median over 40 months · +465%

vs. sector peers

Fair

43.3x median of 4 peers · -17%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

7.3x

PEG

—

What's Good / What's Bad

🟢 What's Going Well3

Debt is being paid down
Total debt is down 20% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 12.4% to 4.0% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 14.5% to 8.3% — often a sign of competition or overexpansion.

Red Flags

2 items require attention · 2 watch

🟡Profit is decliningFinancial
Net profit is down 62% over 3 years.
🟡Margins are compressingFinancial
EBITDA margin is down 4.1 points over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 20% 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 7.7% to 3.6%. 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 4.6x 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 465% 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.
Growth barely outpaces inflation
Revenue compounding at 2.1% 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.
Returns on shareholder capital are falling
ROE has dropped from 12.4% to 4.0%. 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.

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

1EBITDA margin holds above 2%✓ 3.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 4.6x
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✗ 2.5x
How much operating profit can fall before interest stops being comfortably covered.
4Revenue growth stays above 4% a year✗ 2.1% CAGR
Latest reported year was -12.5%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
5Free cash flow remains positive✓ ₹81 Cr
Profit that never becomes cash eventually stops being profit.

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

4 good · 4 neutral · 3 weak

Market Cap

₹203 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

35.7x

Fair

Fairly valued against the generic band

P/B Ratio

0.35x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹0.37

Profitable

Profitable on a per-share basis

ROE

4.0%

Weak

Weak capital efficiency

ROCE

8.3%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.54x

Low

Conservative leverage

Revenue Growth (YoY)

-12.5%

Shrinking

Sales are contracting

Profit Growth (YoY)

-30.7%

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

₹81 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

-4.4%

Weak

Thin margins leave little room for error

Net Margin

0.3%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.21

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.12

Defensive

Steadier than the market

52W Range Position

48%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

13.7 / 14.1

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

33.9

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,612 Cr	₹1,581 Cr	₹1,715 Cr	₹1,717 Cr	+2.1%
EBITDA	₹124 Cr	₹97 Cr	₹100 Cr	₹63 Cr	-20.5%
EBITDA Margin	7.7%	6.2%	5.8%	3.6%	—
PAT (Net Profit)	₹63 Cr	₹28 Cr	₹34 Cr	₹24 Cr	-27.8%
EPS	₹4.13	₹1.82	₹2.24	₹1.55	-27.9%
ROE	12.4%	5.2%	6.0%	4.0%	—
ROCE	14.5%	8.8%	10.0%	8.3%	—
Total Debt	₹359 Cr	₹387 Cr	₹376 Cr	₹285 Cr	-7.3%
Free Cash Flow	-₹147 Cr	-₹41 Cr	₹37 Cr	₹81 Cr	—

🟢 Revenue has grown at 2.1% a year over 3 years.

🔴 EBITDA has shrunk at 20.5% a year over 3 years.

🔴 EBITDA Margin has fallen from 7.7% to 3.6% over 3 years (-4.1 pts).

🔴 PAT (Net Profit) has shrunk at 27.8% a year over 3 years.

🔴 EPS has shrunk at 27.9% a year over 3 years.

🔴 ROE has fallen from 12.4% to 4.0% over 3 years (-8.4 pts).

🔴 ROCE has fallen from 14.5% to 8.3% over 3 years (-6.2 pts).

🟢 Total Debt has shrunk at 7.3% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹147 Cr to ₹81 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,318 Cr

Total Liabilities

₹718 Cr

Cash & Equivalents

₹34 Cr

Operating Cash Flow

₹92 Cr

Capex

-₹11 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

27.0%

Corporate Actions

Ex-Dividend Date

31 Oct 2005

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 mixed1 negative3 general

Rana Sugars Ltd. Share Price Up 9.66%: Price, Valuation

Univest, 20 AugPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Rana Sugars FY26 net profit falls to ₹23.81 crore on higher tax

scanx.trade, 29 MayResults

🔴Potentially negativeReported deterioration, which feeds the growth and margin inputs on this page directly.

Sugar stocks rally after government tightens stockholding limits

Business Standard, 20 Aug

Rana Sugars Share Price rises 8.84%: key stock analysis

Univest, 24 AugPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Bajaj Hindusthan, Shree Renuka, Rana Sugars gain for second straight session; here is why

Upstox, 18 Mar

Rana Sugars sets Sept 23 record date for 34th AGM

scanx.trade, 03 Sept

Watch Items

Revenue growth is negative (-12.5%) 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

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.

3 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Interest cover stays above 3x; Revenue growth stays above 4% a year · see Key things to watch ↑