Ethanol Stock Under ₹70 Jumps 3% After Promoter Increases Stake in Andhra Sugars
Ethanol Stock : In a positive turn for investors, shares of The Andhra Sugars Limited surged by 3.2% during Wednesday’s trading session on the NSE after the promoter increased his stake in the company. The stock closed at ₹68.85, up 2.5%, compared to its previous closing price of ₹67.17.
Promoter’s Stake Increase Sparks Rally
According to the latest exchange filings, Pendyala Achuta Ramayya, the Joint Managing Director and a member of the promoter group, acquired 2,000 equity shares worth ₹1.35 lakhs on the NSE. This move increased his stake in the company from 0.755% to 0.757%, signaling confidence in the company’s growth potential.
Company’s Expansion Plans
Earlier, on February 11, the company’s Board approved:
✅ 6 TPD Sodium Sulphate Recovery Plant – Investment of ₹12 crore
✅ 12 MW Solar Power Project – Capital outlay of ₹42 crore to support captive power needs
These strategic investments align with Andhra Sugars’ long-term vision to enhance production efficiency and sustainability.
Financial Performance Overview
Despite the rally, Andhra Sugars has witnessed a mixed financial performance. The company reported a 13.3% increase in revenue from ₹451 crores in Q3 FY24 to ₹511 crores in Q3 FY25. However, its net profit turned negative, shifting from a profit of ₹8.6 crores to a loss of ₹0.42 crores in the same period.
About The Andhra Sugars Limited
Founded in 1947, Andhra Sugars operates in multiple segments, including:
🔹 Sugars – Manufacturing of sugar and ethanol
🔹 Chemicals & Fertilizers – Industrial alcohol, chlor-alkali products, sulphuric acid
🔹 Pharma – Aspirin production
🔹 Renewable Energy – Solar power generation
Stock & Financial Ratios Overview
| Metric | Value |
|---|---|
| Market Cap | ₹929 Cr. |
| Current Price | ₹68.5 |
| 52-Week High/Low | ₹129 / ₹66.4 |
| Stock P/E | 19.6 |
| Book Value | ₹116 |
| Dividend Yield | 1.46% |
| ROCE (Return on Capital Employed) | 5.34% |
| ROE (Return on Equity) | 4.70% |
| Face Value | ₹2.00 |
| Promoter Holding | 47.3% |
| Price to Book Value | 0.59 |
| Debt to Equity Ratio | 0.02 |
| Pledged Percentage | 2.24% |
| Industry PE | 24.4 |
| Graham Number | ₹93.5 |
| Intrinsic Value | ₹86.6 |
| RSI (Relative Strength Index) | 35.5 |
| EPS (Earnings Per Share) | ₹3.34 |
| No. of Equity Shares | 13.6 Cr. |
| PEG Ratio | -1.16 |
| 200-Day Moving Average (DMA) | ₹96.7 |
| Free Cash Flow (3Yrs) | ₹161 Cr. |
| Free Cash Flow (5Yrs) | ₹463 Cr. |
| Debt | ₹24.0 Cr. |
| Return on Assets | 3.62% |
| Price to Sales Ratio | 0.48 |
Investor Takeaway
With a low debt-to-equity ratio (0.02) and a high book value (₹116) compared to its current price, Andhra Sugars appears undervalued. However, its low ROCE (5.34%) and recent net loss indicate operational challenges.
Long-term investors may find value in the stock due to promoter confidence, new investments in renewable energy, and an improving revenue trend. However, short-term traders should be cautious due to recent earnings volatility.
Frequently Asked Questions (FAQs)
1. Why did Andhra Sugars’ stock rise today?
The stock surged 3.2% after the promoter increased his stake, signaling confidence in the company’s growth prospects.
2. What are Andhra Sugars’ latest expansion plans?
The company is investing ₹54 crore to establish a Sodium Sulphate Recovery Plant and a 12 MW Solar Power Project to enhance production and reduce energy costs.
3. Is Andhra Sugars a good investment at ₹68.5?
At ₹68.5, the stock is trading below its book value (₹116) and intrinsic value (₹86.6), making it attractive for value investors. However, its low ROE and recent losses require cautious optimism.
4. What is the company’s financial health?
Andhra Sugars has low debt (₹24 Cr.), strong free cash flow, and a promoter holding of 47.3%, which are positive signs. However, its recent profitability dip is a concern.
5. What are the risks of investing in Andhra Sugars?
The key risks include earnings volatility, declining profitability, and low return ratios (ROCE & ROE). Investors should monitor upcoming earnings reports before making a decision.
By staying updated with financial trends and market-moving news, investors can make well-informed decisions regarding Andhra Sugars and other ethanol-related stocks. 🚀
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.