Our 17th company in the Series of Best Stocks Below Rs. 50 is Kothari Sugars and Chemicals Ltd.
This company is good for investing purpose or not ?
Let’s start with the Company profile
Company Profile :
Kothari Sugars and Chemicals Limited is engaged in the business of sugar, co-gen and distillery.
Now Let’s check the important fundamental figures of this company. This is a small cap company with Market Cap ₹324cr. We can check more fundamental details below in depth:
Company Fundamental Detail :
PE Ratio: 9.54
Sector PE Ratio: 47.43
PE Ratio of this company is low but better than Sector’s PE. So it’s a Good PE than the peers of this company.
PB Ratio : 1.47
Sector PB Ratio : 9.13
PB Ratio of this company is low than Sector’s PB ratio. So it’s Good PB than the peers of this company.
Dividend Yield : 0.49%
Sector Dividend Yield : 1.48%
Dividend Yield of this company is low than Sector. Dividend of this company is Below Average than the peers of this company.
ROE: 15.46%
ROCE: 17.03%
ROE (Return on equity) and ROCE (Return on capital equity) is Average
According to above data, this company is looking fundamentally average. Now We’ll check the company Financially data:
Company Financial Detail
| Year | Revenue(cr.) | Profit(cr.) |
| 2022 | 434.84 | 34.03 |
| 2021 | 428.48 | 19.02 |
| 2020 | 363.35 | 19.41 |
| 2019 | 349.56 | 12.73 |
We should check now liabilities of company also in the below table
Total Current & Non Current Liabilities
| 2022 | 2021 | 2020 | 2019 |
| 175.18 | 155.10 | 208.04 | 238.53 |
Liabilities of a company refers to the debt of that company. We should also aware the debt of company. In 2022, Company have 175.18 Cr. debt.
Let’s check the Free Cash flow of the company
Free Cash flow
| 2022 | 2021 | 2020 | 2019 |
| -7.14 | 77.33 | 9.84 | 21.11 |
Debt Level: KOTARISUG has more cash than its total debt.
Reducing Debt: KOTARISUG’s debt to equity ratio has reduced from 97.2% to 25.9% over the past 5 years.
Debt Coverage: KOTARISUG’s operating cash flow is negative, therefore debt is not well covered.
Interest Coverage: KOTARISUG’s interest payments on its debt are well covered by EBIT (23.6x coverage).
Share Holding Pattern
| Promotor Holding | Foreign Institution | Mutual Fund | Other Domestic Institutions | Retail & Others | |
| Jun 2021 | 73.53% | 0.78% | 0.00% | 1.43% | 24.26% |
| Mar 2021 | 73.53% | 0.65% | 0.00% | 1.53% | 24.33% |
| Dec 2020 | 73.53% | 0.48% | 0.00% | 1.53% | 24.48% |
| Sep 2020 | 73.53% | 0.48% | 0.00% | 1.66% | 24.57% |
Above table showing there is no big change in Promotors holding which is 73.53% in June 2022. FIIs invested in June 2022 with 0.78% and retail investor is 24.26%.
Investment Checklist for Kothari Sugars and Chemicals Ltd.
- The company is currently profitable
- Does not have a meaningful market cap (₹3B)
- Earnings have grown by 26.9% per year over past 5 years
- Debt level is low and not considered a risk
- They do not pay a dividend
- Share price has been stable over the past 3 months
- The company’s earnings are high quality
- Profit margins improved or KOTARISUG became profitable
- At least 3 years of financial data is available
- Shareholders have not been meaningfully diluted in the past year or recently listed
- Revenue is meaningful (₹5B)
- KOTARISUG does not have negative shareholders equity.
According to its historical performance we can predict stock target.
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Entry Buying Zone : Premium members can see only
Target: Premium members can see only
Time Horizon:Premium members can see only
Risk Profile: Premium members can see only
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Entry Buying Zone : 34 to 37
Target: 50 ( 40% Upside)
Time Horizon: 1 Year
Risk Profile: High Risk (Stock is 3.71x as volatile as Nifty)
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Hope you liked Our 17th company in the Series of Best Stocks Below Rs. 50. We tried to cover many important things about this company, if you think anything left to cover, you can comment us and we’ll try to cover those things also.
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