Shares of Bajaj Hindusthan Sugar touched a 9-year high today

The sugar sector is abuzz with activity, particularly Bajaj Hindusthan, a prominent player in the sugar sector engaged in sugar manufacturing, which witnessed a substantial surge in its stock price. The company’s shares rose by over 15% in a single day. 

Notably, not only did the stock achieve a new 52-week high, but it also reached a significant price peak over the past nine years, reaching Rs 25.15 per share on the BSE. 

The trading volumes of the stock have increased significantly, surpassing the average volumes on the BSE by 1.38 times. As of the time of writing this article, the company’s shares are up by Rs 2.97, a 13.55% increase, and are trading at Rs 24.89 each on the BSE. 

Established in 1931 as The Hindustan Sugar Mills Limited, Bajaj Hindusthan Sugar Limited (BHSL) is engaged in sugar, alcohol, ethanol manufacturing, and power generation. 

We would like to highlight several important points from the FY23 Annual Report of the company.  

The company maintains its position as the foremost manufacturer of sugar and ethanol in India, boasting fourteen sugar plants with a combined capacity to crush 136,000 tons of sugarcane per day (TCD).  

Additionally, it operates six distilleries capable of producing a total of 800 kiloliters of Industrial Alcohol per day. Alongside these, the company operates fourteen cogeneration plants, collectively possessing a power generation capacity of 449 MW. 

During the year, the company successfully sold 1,422,798 metric tons of sugar and 103,776 metric tons of molasses, which marks an increase from the previous year’s sales of 1,305,254 metric tons of sugar and 119,034 metric tons of molasses. 

During the same period, the company processed a total of 13.842 million metric tons (MMT) of sugarcane, demonstrating growth from the previous year’s 12.589 MMT.  

Moreover, the company achieved a sugar production of 1,348,640 metric tons (MT), marking an increase from the previous year’s production of 1,285,927 MT.  

However, a closer look at the company’s financials reveals a less impressive picture, with a net loss reported for the past ten years. In the June quarter of FY24, the company’s revenue from operations declined by 11% from Rs 1530 crore to Rs 1360 crore. The operating profit also decreased from Rs 33 crore to Rs 22 crore. This quarter’s operating profit margin stands at a mere 2%. The company’s net loss widened from Rs 45 crore to Rs 75 crore. 

Even when considering the financials for the entire year, the company still reported a net loss of Rs 135 crore, although this was an improvement from Rs 238 crore in FY23. The company’s debt on the balance sheet is Rs 4292 crore, down from Rs 4817 crore in FY23. The book value of the company’s shares is Rs 34.6, and the stock is trading at 0.72 times its market value. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet, and is subject to changes. Please consult an expert before making related decisions.