Hey Traders! The sugar industry in India has seen a steady growth trend in recent years, driven by favourable government policy and increasing demand both domestic and internationl markets. India is the world’s second-largest producer of sugar after Brazil, with an estimated output of 33 million tonnes during the 2019-20 season. During 2021-2023 Sugar stocks have generated big returns for investors. In this post we will learn about Ugar Sugar and its potential share price target upto year 2030. We will also study the overall industry, along with the financial and technical performance of Ugar Sugar works.
Table of Contents
Ugar Sugar Company details
Ugar Sugar Works is located in Ugar, Karnataka. It is one of the largest sugar manufacturing companies in South India. It has a history of over 75 years, and it is the parent organization of the Shirgaokar group of companies. The company’s core business revolves around the production of sugar from sugarcane. In addition to sugar, Ugar Sugar Works is involved in various other areas of business, including industrial alcohol, Indian made liquors, power generation, ethanol, rectified spirit (RS), and extra neutral alcohol (ENA).
The current production capacity of Ugar Sugar Works are as follows:
Sugar cane crushing: 17,000 tons per day
Sugar production: 200,000 metric tons per year
Distillery: 75,000 liters per day
Power generation (cogeneration): 59 MW, with an export capacity of 35 MW
Ugar Sugar Share Price Target 2023
Ugar Sugar Limited is trading near its all time high value of Rs. 119. The stock is making higher high and the resistance at 115 is already tested two times making it weak. In 2023, we can see targets of Rs. 119 easily.
In order to understand long term targets of this company, we will need to study its financial statements and analyze the sugar industry.
Ugar Sugar Share Price Target 2024 - 2025
One of the by product from production of sugar is Ethanol. Petroleum companies use Ethanol with fuel like petrol and diesel. As the cost of fuel is rising day by day, the percentage of ethanol blend is also increasing. This has led to an increase in the price of ethanol. By 2024-25 our government is planning to use up to 61 lakh tonnes of extra sugar that are made towards the generation of ethanol.
This brings us to the fact that the demand for by products that sugar comapnies produce is also rising. The future looks bright for this sector. Ugar Sugar Share Price Target 2024 is upto Rs. 125 and our second target can be Rs. 137
UGAR SUGAR Share Price Target 2023, 2024, 2025, 2030
| Year | Ugar Sugar Share Price Target (Rs) |
|---|---|
| 2023 | 119 |
| 2024 | 125 |
| 2025 | 137 |
| 2026 | 154 |
| 2027 | 166 |
| 2028 | 188 |
| 2029 | 216 |
| 2030 | 231 |
Overview of Sugar Industry and Market Trends
One of the key factors driving growth in the industry is increasing consumption of sugary foods and beverages among India’s growing middle class. This trend has been supported by rising incomes and changing lifestyles, along with the growing preference for processed food products. In addition, favourable government policies such as subsidies on cane production have incentivised farmers to increase their sugarcane yields, contributing to higher production levels.
The fertilizer market further supports sugar industry. Earlier, bagasse which was considered to be a waste product generated from sugar factories had to be dumped. But it turned out that this bagasse can be used for making organic fertilizers. As farmers are getting more conscious towards use of Organic fertilizers the demand of bagasse is rising. With rising demand the price of bagasse has surged. This has led to an additional source of income for Sugar companies.
Thought the trend is positive, however, there are also challenges facing the Indian sugar industry. One major issue is overproduction which can lead to surplus stocks and falling prices for farmers.
Check out latest Stock Analysis by DailyBulls
Ugar Sugar Financial Performance
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Per Share Ratios
- Basic EPS rose steadily from Rs. 0.39 Cr (MAR 19) to Rs. 9.16 Cr (MAR 23), which shows that the company is able to increase its profits.
- The diluted EPS of the company shows that there is very little impact on earnings per share due to dilution.
- Cash EPS displays steady growth, which shows healthy cash flows from operations.
- The company’s Book Value per share shows steady growth, reflecting increased net worth and asset expansion.
Profitability Ratios
- Talking about margins, the PBDIT margin of UGAR SUGAR grew from 5.24% on MAR 19 to 11.97% on MAR 23. This shows the better operational efficiency of the company.
- The PBIT margin also shows steep growth, which shows effective cost management and increased profitability.
- The company’s Net Profit Margin witnessed an upswing, indicating improved profit generation in proportion to its revenue.
- Return on Net Worth/Equity also improved a lot, showcasing efficient fund utilization and increased profitability
- The company’s Return on Capital Employed is fluctuating, but it remains relatively high. This is a good sign as it shows successful capital investment returns.
Liquidity and Coverage Ratios
- Ugar Sugars Current Ratio has increased. This ensures better short-term liquidity and the ability to meet obligations.
- The company’s Quick Ratio also significantly improved, which shows us that they are able to meet short-term obligations without relying heavily on inventory.
- The company’s Interest Coverage Ratios is increased, which means Ugar Sugar is able to fully pay its interest.
Ugar Sugar Valuation Ratios
- Ugar Sugar’s Enterprise Value (EV) was seen to be increased, with minor fluctuations over time.
- EV/Net Operating Revenue and EV/EBITDA ratios can be seen fluctuating within reasonable ranges.
- MarketCap/Net Operating Revenue ratio also rose, indicating increased market value relative to operating revenue.
- The price/BV (Price to Book Value) ratio grew, signifying high market value in relation to net assets.
Ugar Sugar Works Vs Shree Renuka Sugar (Comparison)
| Company | CMP Rs. | P/E | Mar Cap Rs. (Cr.) | Div Yld % | NP Qtr Rs. (Cr.) | Qtr Profit Var % | Sales Qtr Rs. (Cr.) | Qtr Sales Var % | ROCE % |
|---|---|---|---|---|---|---|---|---|---|
| Sh. Renuka Sugar | 43.50 | - | 9269.61 | 0.00 | 44.60 | -72.62 | 2328.50 | 7.16 | 8.84 |
| Ugar Sugar Works | 110.10 | 12.03 | 1239.76 | 0.23 | 65.27 | 339.82 | 608.47 | 67.45 | 28.35 |
Frequently asked questions
Which is better Bajaj Hindusthan sugar or Ugar sugar?
In terms of financials, Ugar is much better on paper and generating profits for its investors. Bajaj Hindusthan sugar on the other hand is loss making company.
what is Ugar Sugar Works PE compared to industry PE?
The PE ratio is Ugar sugar works is 12.02 compared to Industry PE ratio of 18. The stock is considered to be undervalued when its PE ratio is less than the Sector PE.
Is Ugar Sugar a good buy?
As of 26 May 2023, Ugar Sugar is trading near its 52 Weak high levels. The resistance at 119 is already tested twice, which makes it weak. There is a high possibility of a breakout from 119. The short term target can be Rs 125 with a Stop Loss of 115.
What is 52 Week high and 52 Week low of Ugar Sugar?
Ugar Sugar Works 52 Week high is 119 and its 52 Week low level is 42.10
Who is holding most shares of Ugar Sugar?
Promoters are holding 44.35% of shares while the public holding is 54.94% in Ugar Sugar. S B RESHELLERS PRIVATE LIMITED has the most shares with 17.51% in holding.
Does Ugar Sugar make hand Sanitizers?
UGAR SUGAR also makes Hand Sanitizers along with a wide product range like Ethanols, alcohols, sugars, etc.
