आज 300 /- कल 700+ बम्फर स्टॉक

Dear investor,

Please find below mentioned short term fundamental stock for delivery purpose.

 

Company	CMP	Target	BSE Code	NSE Code
Andhra Sugars Ltd.	304	390	590062	ANDHRSUGAR

 

Fundamental :-

Andhra Sugars Ltd

• Market Cap:  827.25 Cr.
• Current Price:  304.60
• 52 weeks High / Low  392.00 / 117.05
• Book Value:  425.56
• Stock P/E: 4.07
• Dividend Yield: 6.57 %
• ROCE: 22.64 %
• ROE: 17.55 %
• Sales Growth (3Yrs): 3.03 %
• Listed on BSE and NSE
• Company Website
• Face Value:  10.00

• PEG Ratio: 0.14
• Promoter holding: 47.03 %
• Pledged percentage: 0.00 %
• Debt:  183.52 Cr.
• Price to Earning: 4.07
• EPS:  74.92
• Net profit:  203.09 Cr.
• Profit growth: 6.61 %
• Profit growth 7Years: 7.92 %
• Net profit preceding 12months: 185.30 Cr.
• Profit growth 3Years: 58.01 %
• Dividend yield: 6.57 %
• Debt to equity: 0.16
• Sales last year:  1,376 Cr.
• Sales growth: 7.32 %
• Unpledged promoter holding: 47.03 %
• Investments:  266.58 Cr.
• Intrinsic Value:  165.61

Andhra Sugars Limited was established in the year 1947. The company has expanded and diversified over the years, beyond Sugar, to produce Organic & Inorganic Chemicals, Fertilizers, Bulk Drugs, Power etc. at its six integrated complexes at Tanuku, Kovvur, Guntur, Taduvai, Saggonda & Bhimadole. The company identifies its business segments as reportable segments as 1) Sugars, 2) Caustic Soda, 3) Power Generation, 4) Industrial Chemicals and 5) Others such as bulk drug, UH 25 and MMH, Liquid Hydrogen, HTPB. P Narendranath Chowdary is the chairman and Managing Director with promoter shareholding of 47.03%.
 

Investment rationale
 

Ethanol production to gain traction - As per National Biofuels Policy, 2018, the government intends to achieve ethanol with petrol blend levels of 10 per cent by 2022 and 20 per cent by 2030. The government is targeting an Ethanol production and supply of 300-350 crore litres and achieve 7.5% ethanol blend levels with petrol for the year FY21. According to Indian Sugar Mills Association (ISMA) due to improved production of sugarcane, production of Ethanol would increase to 375-400 crore litres. Resultantly, we expect company to export molasses to be used in the production of Ethanol.

 

Leveraging on strong R&D - Andhra Sugar was the first to develop indigenous technology for manufacturing of Aspirin with in house R&D efforts and further entered into commercial production in the year 1980. The Aspirin plant has obtained the recognition of USFDA, EDQM & WHO and was also certified by ISO. It contributes to a major share of the quantum of aspirin produced in India and is being exported to USA,UK..etc. This alludes to the fact that company has robust R&D infrastructure.
 

Outlook and Valuation - The pandemic has been blessing in disguise for sugar companies to fulfil hygienic demand they have ramped up hand sanitizer manufacturing capacity against the backdrop of this virus. Besides, to meet the fuel blending requirement sugar companies have initiated a tripartite mechanism between sugar mills, oil marketing companies and banks so as to give a boost to the ethanol business of sugar mills and evade the problem of working capital. Andhra sugar delivered a robust quarter with quarterly PAT growth of 39.73%YoY. Besides, company has reduced its debt from Rs174crore in FY19 to Rs136crore in FY20. The stock is currently trading at a PE of 3.69x.
 

Duration of recommendation: Medium term Target 390/- , Long term 700/+.

Before investment advice your financial advisor.