Sakthi Sugars Limited

Consumer Defensive — Confectioners · NSE

₹18.64+₹0.15 (+0.81%)

DalalBaazaar Score

40 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Very High

Driven by high debt relative to equity, short-term liabilities exceed short-term assets, negative free cash flow.

In simple words: Strong business and financial position, though profits are falling even as sales grow. Debt 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 Sakthi Sugars Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Sakthi Sugars Limited manufactures and sells sugar and its by-products in India. It operates through Sugar, Industrial Alcohol, Power, and Soya Products segments.

IndustryConfectioners

SectorConsumer Defensive

Employees853

Annual revenue₹841 Cr

How does it make money?

Turns over ₹841 Cr a year. Of every ₹100 of sales, about ₹3 reaches shareholders as profit, with ₹17 left at the operating level before interest, tax and depreciation. Each of its 853 employees supports ₹98.6 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹98.6 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?Some evidence

ROCE of 15.5% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

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 -20% while net margin moved -92% 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-20%

Margin effect-92%

DalalBaazaar Score

40/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 7.1% a year
✗ Profit has declined at 59.3% a year
✗ Profit fell 64.8% in the latest year

Quality vs. Valuation

Company Quality

34/ 100

Weak

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

Valuation

69/ 100

Cheap

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

Optically cheap, but the underlying business scores poorly. Cheap-and-weak is what a value trap looks like from the outside — the low price may be deserved.

Historical Valuation

Current P/E

8.1x

3Y Median

2.5x

40 monthly readings · mean 2.7x · range 0.8x–8.9x

Sector Median

43.3x

median of 4 sector peers

⚠️Current valuation is approximately 222% above its 3y median of 2.5x. 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 81% below the peer median of 43.3x.

vs. its own history

Expensive

2.5x median over 40 months · +222%

vs. sector peers

Cheap

43.3x median of 4 peers · -81%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

6.7x

PEG

—

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from 11.3% to 16.6% over 3 years.
Debt is being paid down
Total debt is down 15% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Return on capital is falling
ROCE has declined from 94.2% to 15.5% — often a sign of competition or overexpansion.

Red Flags

6 items require attention · 3 high · 3 watch

🔴High leverageFinancial
Debt/Equity of 3.16x — earnings must service borrowings before shareholders see anything.
🔴Thin interest coverageFinancial
Operating profit covers interest only 1.4x — little room if earnings dip.
🔴Inventory building faster than salesFinancial
Inventory up 114% against revenue up -20% — stock may not be moving.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹23 Cr in the latest year.
🟡Profit is decliningFinancial
Net profit is down 93% over 3 years.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.70 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 11.3% to 16.6%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 15% 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 81% 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 5.1x 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 222% 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.
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.
Several serious flags at once
3 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

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

1EBITDA margin holds above 15%✓ 16.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 5.1x
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✗ -₹23 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ 1.4x
How much operating profit can fall before interest stops being comfortably covered.
5ROCE stays above 12%✓ 15.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

4 / 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 · 3 neutral · 3 weak

Market Cap

₹222 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

8.1x

Cheap

Cheap against the generic band

P/B Ratio

0.97x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹2.31

Profitable

Profitable on a per-share basis

ROE

12.3%

Moderate

Moderate capital efficiency

ROCE

15.5%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

3.16x

High

High leverage

Revenue Growth (YoY)

24.6%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-64.8%

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

-₹23 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

4.6%

Weak

Thin margins leave little room for error

Net Margin

2.8%

Weak

Very little revenue reaches the bottom line

Current Ratio

0.70

Tight

Tight short-term liquidity

Beta (vs Nifty)

0.23

Defensive

Steadier than the market

52W Range Position

52%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

18.3 / 19.0

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

46.5

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,049 Cr	₹1,054 Cr	₹914 Cr	₹841 Cr	-7.1%
EBITDA	₹118 Cr	₹84 Cr	₹104 Cr	₹140 Cr	+5.8%
EBITDA Margin	11.3%	8.0%	11.3%	16.6%	—
PAT (Net Profit)	₹418 Cr	₹129 Cr	₹80 Cr	₹28 Cr	-59.3%
EPS	₹35.16	₹10.9	₹6.73	₹2.37	-59.3%
ROE	—	109.8%	40.3%	12.3%	—
ROCE	94.2%	32.2%	17.0%	15.5%	—
Total Debt	₹852 Cr	₹773 Cr	₹784 Cr	₹720 Cr	-5.5%
Free Cash Flow	₹88 Cr	₹101 Cr	₹26 Cr	-₹23 Cr	—

🔴 Revenue has shrunk at 7.1% a year over 3 years.

🟢 EBITDA has grown at 5.8% a year over 3 years.

🟢 EBITDA Margin has risen from 11.3% to 16.6% over 3 years (+5.4 pts).

🔴 PAT (Net Profit) has shrunk at 59.3% a year over 3 years.

🔴 EPS has shrunk at 59.3% a year over 3 years.

🔴 ROE has fallen from 109.8% to 12.3% over 3 years (-97.5 pts).

🔴 ROCE has fallen from 94.2% to 15.5% over 3 years (-78.7 pts).

🟢 Total Debt has shrunk at 5.5% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹88 Cr to -₹23 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,438 Cr

Total Liabilities

₹1,210 Cr

Cash & Equivalents

₹6 Cr

Operating Cash Flow

-₹4 Cr

Capex

-₹19 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

59.8%

Corporate Actions

Ex-Dividend Date

06 Dec 2007

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 negative5 general

Sakthi Sugars (SAKHTISUG) Share/Stock Price Live, NSE

TechGraph, 09 Oct

Sakthi Sugars Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 30 Aug

Sakthi Sugars FY26 profit falls, Q4 gains from APTEL order

scanx.trade, 25 MayResults

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

Sakthi Sugars Share Price news with sector and peer view

Univest, 24 Aug

Sugar stocks rally after government tightens stockholding limits

Business Standard, 20 Aug

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

Upstox, 18 Mar

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongValuation

MiddlingBusiness Quality

WeakFinancial Health · Growth · Profitability · Risk

Points for each in the Score ↑

Cheap, but for a reason

The low price is the whole case here, and the business underneath scores poorly. Cheap-and-weak is what a value trap looks like from the outside — it needs a specific reason the numbers are about to improve, not just the observation that they are low. 3 high-severity red flags sit above this conclusion and should be read first.

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