Sugar Sector Introduction:
Sugar is a significant agro-based sector that affects the rural livelihoods of over 50 million sugarcane growers and approximately 5 lakh workers engaged directly in sugar mills.
Additionally, employment is generated in a variety of ancillary businesses such as transportation, trade service of machinery, and agriculture input supply.
India is the world’s second-largest producer of sugar, after Brazil, and also the world’s largest consumer. Today, India’s sugar sector produces roughly 268.21 lakh tonnes in annual output.
Additionally, 4.48 lakh tonnes were exported from October to December last year, exceeding the MAEQ quota for the prior season. Interested in investing in sugar industry stocks listed on the Indian Stock Exchanges (NSE and/or BSE)?
The following are some Sugar stocks with a market capitalization of at least 250 crores in the market capitalization, in order to keep the list focused and avoid including extremely cheap Sugar stocks.
Top 10 Sugar Companies in India:
|S.No.||Name||CMP Rs.||ROCE 5Yr %||ROE 5Yr %||P/E||EV / EBITDA||PB X PE||PEG||Debt / Eq||Int Coverage||ROCE %||ROE %||ROIC %||ROA 12M %||EPS 12M Rs.||Mar Cap Rs.Cr.|
|2||Balrampur Chini Mills Ltd||385.75||18.14||24.56||19.3||13.71||59.44||0.53||0.47||15.35||16.53||18.84||13.81||10.04||19.89||8061.27|
|3||Triveni Engineering and Industries Ltd||206.9||16.72||24.26||16.48||10.19||54.38||0.15||0.63||9.83||19.07||20.51||13.72||7.74||12.23||4988.41|
|4||Dalmia Bharat Sugar & Industries Ltd||459.3||12.52||13.12||13.82||10.03||23.91||0.34||0.45||7.36||14.5||14.67||12.13||7.49||33.23||3715.63|
|5||Dhampur Sugar Mills Ltd||329.15||13.75||19.14||10.03||7.09||14.04||0.14||0.74||4.79||13.67||15.69||10.56||6.31||32.83||2186.82|
|6||Dwarikesh Sugar Industries Ltd||76.4||15.93||26.46||14.32||9.42||35.66||0.66||1.05||3.81||13.31||17.24||11.06||6||5.34||1439.56|
|7||DCM Shriram Industries Ltd||117.8||14.59||17.83||14.06||8.28||23.34||1.02||0.82||3.71||12.04||11||8.62||3.93||8.38||1024.77|
|8||Avadh Sugar & Energy Ltd||466.1||15.07||26.25||10.8||8.2||15.12||0.02||2.06||1.99||10.3||12.38||8.26||2.83||43.21||933.75|
|9||Uttam Sugar Mills Ltd||191||16.84||27.48||11.19||6.81||24.17||0.33||2.43||2.3||17.49||19.38||9.44||3.4||17.11||730.38|
|10||KM Sugar Mills Ltd||27.7||16.49||18.65||8.23||6.64||9.79||0.46||0.94||3.7||11.67||13.12||8.86||4.57||3.36||254.84|
- ROCE % – Return on Capital Employed in percentage, per-annum.
- ROE % – Return on Equity in percentage, per-annum.
- P/E – Price to Earnings ratio.
- EV/EBITDA – Enterprise Value to Earnings Before Interest, Taxes, Depreciation, and Amortization expenses.
- PEG – Price to Earnings Growth ratio.
- ROCE 5 Years – Return on Capital Employed in percentage, 5 years average.
- ROE 5 Years – Return on Equity in percentage, 5 years average.
EID Parry is a subsidiary of the Murugappa group, which is headquartered in Chennai and has a market capitalization of Rs. 38,100 crore. The group engages in a variety of business activities, including abrasives, automobile components, cycles, sugar, agriculture inputs, fertilizers, plantations, and construction.
EID Parry represents the group’s interests in sugar manufacturing. The promoters owned 45 percent of the corporation as of March 31, 2021. EID Parry acquired a 76 percent stake in SSL, a Karnataka-based company, in October 2009 for Rs.49.62 crores and increased its stake to 100 percent in September 2011 for Rs.18.0 crores. SSL was integrated with EID Parry in May 2014 (effective from April 1, 2013).
In 2010, EID Parry paid Rs.98.87 crores for a 65 percent stake in GMR Industries Limited (later renamed Parry Sugar Industries Limited (PSIL)). In March 2013, the business completed the acquisition of two of PSIL’s three mills, located in Haliyal, Karnataka, and Sankili, Andhra Pradesh (effective April 1, 2012). Additionally, in April 2017, PSIL’s third mill was combined with EID Parry (effective from April 1, 2016).
EID Parry announced the depressed sale of its in-house bio-pesticides business, as well as its whole share in wholly-owned subsidiary Parry America Inc, USA, to CIL in December 2017 for a total purchase cost of Rs 338 crore, which was received in April 2018.
Additionally, the company launched a 50:50 joint venture with Synthite Industries Private Limited (CRISIL AA-/Positive/CRISIL A1+ rated). The JV will be involved in the manufacturing of algal products with added value. EID Parry said EID would spend Rs. 11 crores on the JV.
EID Parry’s standalone net profit for fiscal 2021 was Rs. 865 crores on operating revenues of Rs. 2,024 crores, up from Rs. 2 crores on operating revenues of Rs. 1,875 crores in the previous fiscal.
Balrampur Chini Mills Ltd
BCML is one of India’s leading sugar producers. The company’s operations are forward integrated, producing ethanol from molasses, a by-product of sugar processing, and power via cogeneration from bagasse, a by-product of sugar manufacturing.
Its facilities in Uttar Pradesh include eleven sugar mills with a combined capacity of 76,500 tonnes per day (TPD) of sugarcane, 520-kilo liters per day (KLPD) of the distillery, and 165.2 megawatts (MW) of saleable cogeneration. As of December 31, 2020, the Saraogi family, the promoters, held 41.21 percent of the company’s equity capital.
For the nine months ended December 31, 2020, net profit was Rs 232 crore on net sales of Rs 3792 crore, compared to a net profit of Rs 274 crore on net sales of Rs 3001 crore in the previous year.
Triveni Engineering and Industries Ltd
TEIL is primarily a sugar manufacturing company, but it also manufactures high-speed gears and implements projects in the fields of water and wastewater treatment, as well as pollution management.
It is the third-largest sugar manufacturer in the country, with a combined capacity of 61,000 TCD, 104.5 MW of electricity cogeneration, and 320 KLPD of distillery capacity spread across seven locations in Uttar Pradesh. Additionally, the corporation operates engineering enterprises, including a gear division in Mysore that produces high-speed gears.
Additionally, it has a water business section in Noida that is engaged in the manufacture of water treatment equipment and facilities.
Dalmia Bharat Sugar & Industries Ltd
Dalmia Bharat Sugar and Industries Limited (formerly Dalmia Cement (Bharat) Limited) was founded in 1939 in the Tamil Nadu town of Dalmiapuram. Following the demerger, DBSIL works as an integrated sugar company with a cane crushing capacity of 36,500 tonnes per day (TCD), a distillery capacity of 305-kilo liters per day (KLPD), and a cogeneration capacity of 119 megawatts (MW) (across UP and Maharashtra).
The company benefits from the fact that it has facilities in two main sugar-producing states, namely Uttar Pradesh and Maharashtra.
Dhampur Sugar Mills Ltd
As of March 31, 2021, DSML has a sugarcane crushing capacity of 45,500 TCD, a cogeneration capacity of 220.5 MW, and a cumulative ethanol production capacity of 4,00,000 liters per day. The company operates an integrated business model that includes sugar manufacturing, distillery operations, and energy generation. The company’s involvement in these companies enables it to partially minimize the impact of the sugar industry cyclicality.
DSML announced in its June 07, 2021 statement that its Board of Directors has studied and approved a Scheme of Arrangement between Dhampur Sugar Mills, Dhampur Bio Organics, and their respective shareholders and creditors. DSML will operate factories in Dhampur and Rajpura, while Dhampur Bio Organics Ltd will operate plants in Asmoli, Mansurpur, and Meerganj.
Furthermore, in exchange for transferring the Demerged Undertaking from the DSML to Dhampur Bio Organics, the DBOL will issue 1 (one) fully paid-up equity share of the DBOL with a face value of Rs.10 to each DSML shareholder in exchange for each 1 (one) fully paid-up equity share of the DSML with a face value of Rs.10.
Dwarikesh Sugar Industries Ltd
Mr. Gautam R. Moraraka founded Dwarikesh Sugar Industries Limited (DSIL) in 1994 with the building of a 2,500 TCD sugar factory in the sugar-rich zone of Uttar Pradesh’s Bundki hamlet in the Bijnor district. DSIL has been steadily increasing its crushing capacity, which has already reached 21,500 TCD.
At the moment, it operates three sugar factories in Dwarikesh Nagar (DN), Dwarikesh Puram (DP), and Dwarikesh Dham (DD). DN and DP are located in Bijnor, whereas DD is located in Bareilly.
Additionally, DSIL has 17 MW of cogeneration capacity at DN, 33 MW at DP, and 36 MW at the DD unit. DSIL exports to the state grid 8 MW from the DN unit, 24 MW from the DP unit, and 24 MW from the DD unit. At its DN facility, the business operates a 130,000-litre-per-day distillery capable of producing industrial alcohol and ethanol.
DCM Shriram Industries Ltd
DSIL is a subsidiary of the Dr. Bansi Dhar group, which was founded following the 1990 restructuring of the DCM company. DSIL manufactures sugar, alcohol, fine/organic chemicals, and industrial rayon at the moment.
DSIL operates two integrated manufacturing plants in Daurala, Meerut (U.P.) with a daily throughput of 12,500 tonnes crushed per day (TCD), a distillery with an annual capacity of 52,500 KL, a cogeneration power plant with a capacity of 94 MW, and an organic/fine chemicals plant with a total installed capacity of 19,455 tonnes per annum as of March 31, 2021.
Another manufacturing operation, ‘Shriram Rayons’, is located in Kota and is dedicated to the manufacture and export of rayon tyre cable, yarn, and fabric to tyre manufacturers. It has a total installed capacity of 17055 tonnes per year for industrial fibers, which includes yarn manufacturing, grey fabric production, and dipped fabric production.
DSIL has also delved into the manufacturing of defense equipment in order to assess the prospects created by the government of India’s “Make in India” initiative and the privatization of the defense industry.
In light of this, the company has entered into an agreement with Zyrone Dynamics Havacilik Danismanlik Ve Ar-Ge San. Tic. A.S. (ZD), a Turkish company, provides technical support for two variants of unmanned aerial vehicles (UAVs), and the two parties will collaborate on marketing the products in India and throughout the world.
According to the agreement, DCM would subscribe to 30% of the capital of the foreign company, or 25715 shares, in five tranches over approximately a year for a total investment of just over USD 1.05 million (Rs.8 crore), subject to necessary approvals regarding foreign investment under FEMA Regulations.
Avadh Sugar & Energy Ltd
ASEL operates four sugar mills in Uttar Pradesh: Hargaon (District Sitapur), Seohara (District Bijnor), New India Sugar Mills in Hata (District Kushinagar), and Rosa Sugar Works in Rosa (District Shahjahanpur).
These mills have a combined crushing capacity of 31,800 TCD. Additionally, it has two distilleries in Hargaon and Seohara with a combined capacity of 240 KLPD and a cogeneration facility capable of producing 74 MW of electricity.
Uttam Sugar Mills Ltd
Mr. M.K Swarup and his family members founded the company as Associated Sugar Mills Limited in October 1993. In 1998, the Adlakha family and their colleagues purchased a 100% stake in the company from the company’s former promoters. Following that, the company’s name was changed to Uttam Sugar Mills Limited in November 1998. Uttam Sugar Mills Limited (USML), a subsidiary of the Uttam Group, is now a market leader in integrated sugarcane processing. It is headquartered in Noida.
The company produces sugar and forward-integrated products such as electricity and ethanol. The company crushes aggregate cane at a rate of 23,750 TCD, generates electricity at a rate of 103 MW, and produces ethanol at a rate of 150 KLPD.
The company operates four sugar mills, one in Uttarakhand and three in Uttar Pradesh.
In FY2020, the company reported a net profit of Rs. 51.6 crore on revenue of Rs. 1644.8 crore, up from a net profit of Rs. 58.1 crore on revenue of Rs. 1228.1 crore the previous year.
KM Sugar Mills Ltd
KM Sugar Mills is a manufacturer of sugar. The Company’s primary activity is the manufacture and selling of sugar.
Apart from this, the Company’s linked business activities include the manufacture and sale of ethanol and ethanol alcohol, the generation of electricity from bagasse, and the manufacture and sale of sanitizers.
In 2021, sugar supplies have been surging. The government’s move to accelerate the ethanol-fuel blend requirement from 2030 to 2025 has benefited the whole business.
To put this in context, Brazil produces 17% of the world’s sugar and 30% of the world’s ethanol. India produces 18% of the world’s sugar but only 3% of its ethanol.
With India’s fuel consumption on an upward trend, the sugar sector has enormous potential.
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