High Sugar Penny Shares in India: Sugar has lengthy been thought of a cyclical trade in India. Nevertheless, prior to now few years, the federal government’s push for ethanol mixing and the export quotas increase has turned the fortunes of the businesses within the sector. Being a commodity, the smallest corporations are well-positioned as a lot as their bigger friends. On this article, we’ll take a look at such small sugar producers, aka, prime penny sugar shares in India.
High Sugar Penny Shares in India
The sugar sector is a capital-intensive trade involving large leverage. Many producers should hold vital debt of their capital construction. Moreover, the producers take pleasure in an entry barrier due to their native model consciousness and sourcing ties.
Thus, with operational and monetary leverage concerned, sugar shares turn into all the way in which extra enticing with document sugar cane manufacturing, exports enhance, and ethanol mixing targets.
These leverage metrics are extra pronounced in small corporations, the holy grail of multi-bagger returns. Subsequently, we take a better take a look at the highest sugar penny shares in India. So with out additional ado, allow us to soar in.
High Sugar Penny Shares #1 – Indian Sucrose
Indian Sucrose Ltd. (ISL) is a Punjab-based sugar manufacturing firm engaged within the manufacturing of sugar, molasses, bagasse & different merchandise and captive energy technology. It operates one plant within the Hoshiarpur district of Punjab.
ISL was began in 1990. As of the current date, the corporate has an put in capability of 9000 tonnes of cane per day (TCD) and a co-generation energy capability of 30 MW.
Sugar manufacturing accounted for 90% of the entire working revenue of Indian Sucrose in FY22. Its internet revenue has steadily elevated from Rs 19 crore in FY20 to Rs 40 crore in FY22 because the working margins improved through the interval.
ISL presently trades a sexy price-to-earnings ratio of 4.59 and a price-to-book worth of 0.71. The inventory is very leveraged with a debt-to-equity ratio of 1.61. This interprets into a large hole within the return ratios with RoCE at 18.4% and RoE at 28.4%.
High Sugar Penny Shares #2 – KM Sugar Mills
Situated in Faizabad, Uttar Pradesh, KM Sugar Mills is engaged within the enterprise of manufacturing sugar, distillery merchandise, and energy. Its sugar plant manufacturing capability stands at 9000 TCD. Moreover, its distillery plant and co-generation energy put in capability are 45-KPD and 25 MW respectively.
Its bagasse-based co-generation power plant is linked to the grid. Thus, the corporate provides electrical energy to the Uttar Pradesh Energy Company.
Like Indian Sucrose, sugar manufacturing for KM Sugar contributed to a majority of 89% of the corporate’s working gross sales. This was adopted by the distillery division’s share of 8%.
KM Sugar Mills reported a internet revenue of Rs 41 crore in FY22 on gross sales of Rs 548 crore. The web revenue has elevated by 128% in two years from Rs 18 crore solely in FY10.
High Sugar Penny Shares #3 – Vishwaraj Sugar Industries
Included in 1995, Vishwaraj Sugar Industries Ltd. is a small-cap producer of sugar, molasses, and captive energy. Its manufacturing facility is positioned in Belgaum, Karnataka which has been categorized as a excessive sugar restoration zone by the Indian authorities.
The corporate additionally manufactures rectified spirit, ENA, ethanol, vinegar, press mud, and compost. Its current put in sugarcane crushing capability stands at 10,500 TCD. It provides its sugar for home in addition to industrial consumption (or manufacturing biscuits, confectionery, and drinks).
The sugar phase introduced 58% of Vishwaraj Sugar’s complete working income of Rs 468 crore in FY22. Not like the earlier two shares we coated above, its distillery phase contributed to a serious 32% of the working revenue.
The sugar penny inventory presently trades at a profitable P/E ratio of 6.5. Its debt-to-equity ratio stands at 0.89. It has a comparatively decrease promoter shareholding of 33.7%.
High Sugar Penny Shares #4 – Kothari Sugars & Chemical substances
A part of the HC Kothari Group, Kothari Sugars and Chemical substances was arrange as a sugar mill in 1961 in Trichy, Tamil Nadu. Quick ahead to at the moment, the corporate runs two sugar manufacturing vegetation and likewise produces captive energy, industrial alcohol, and bio-compost.
In FY22, Kothari Sugars earned working income of Rs 422 crore. Sugar manufacturing accounted for a majority of 62% of the gross sales of this sugar penny inventory. Co-generation of energy and distillery merchandise contributed to 26% and 25% of the revenue respectively.
The revenues of the corporate have steadily elevated from Rs 287 crore in FY18 to Rs 422 crore in FY22 at a CAGR of 8.01% yearly. It reported a internet revenue of Rs 34 crore within the current monetary 12 months.
The shares of Kothari Sugars and Chemical substances presently commerce at a price-to-earnings ratio of seven.9 and a price-to-book worth ratio of 1.48. Not like different leveraged sugar producers on this record, it has a low debt with a debt-to-equity ratio of 0.23.
High Sugar Penny Shares #5 – Piccadily Agro Industries
Piccadilly Agro Industries Ltd. (PAIL) is a Haryana-based small-cap producer of white crystal sugar with an put in capability of 5,000 TCD. Moreover, it has a co-generation energy capability of 6 MW and a distillery capability of 60 KLPD.
The corporate was integrated in 1994 and presently runs as a bunch with its 3 affiliate corporations. Its two segments: sugar and distillery contributed to 54% and 46% of the entire working income in FY22.
The highest line of this sugar penny inventory has persistently elevated from Rs 334 crore in FY18 to Rs 572 crore in FY22. Within the current fiscal, it earned a internet revenue of Rs 29 crore.
Piccadilly Agro has a excessive promoter holding of 71%. Its inventory presently trades at a P/E ratio of 21.7 giving the corporate a market cap of Rs 411 crore.
Listing of High Sugar Penny Shares in India
The desk beneath lists all of the sugar penny shares we coated above.
Firm NameCMP (Rs)Market Cap (Rs Cr)P/EFY22 Gross sales (Rs Cr)
Indian Sucrose631094.6443
KM Sugar Mills3027914.6548
Vishwaraj Sugar Industries183376.5467
Kothari Sugars & Chemicals443667.9422
Piccadily Agro Industries4441121.7572
In Conclusion
We at the moment are on the finish of our article on the highest sugar penny shares in India. We noticed that the income sources of the bigger penny shares are extra diversified than the smallest corporations. Additional, they’ve comparatively decrease debt-to-equity ratios. Nevertheless, traders should train due diligence earlier than investing in penny shares.
Many are a part of pump-and-dump methods. Or their liquidity evaporates on the first signal of bother. How comfy are you with penny shares? Which penny shares would you want us to cowl subsequent? Be happy to remark beneath.
Now you can get the most recent updates within the inventory market on Commerce Brains Information and you may as well use our Commerce Brains Screener to seek out the most effective shares.
Vikalp Mishra is a commerce graduate from the College of Delhi. He likes to jot down on finance, cash and enterprise. He’s a voracious reader with a real curiosity in investing. Drop him a mail at [email protected].
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