Avadh Sugar & Energy Ltd., incorporated in the year 2015, is a Small Cap company (having a market cap of Rs 387.76 Crore) operating in Sugar sector.
Financials
For the quarter ended 31-12-2020, the company reported a Standalone Total Income of Rs 699.89 Crore, up 12.78 % from last quarter Total Income of Rs 620.59 Crore and down -19.70 % from last year same quarter Total Income of Rs 871.64 Crore. Company reported net profit after tax of Rs 3.73 Crore in latest quarter.
Investment Rationale
With the increase in distillery volumes, the company would be able to witness strong earnings CAGR of 17.6% CAGR in the next two years. However, the brokerage still believes overall debt levels is high. Avadh has been unable to reduce its sugar inventories as aggressively as some of its peers in the industry. It remains cautious on debt reduction & delay in distillery capacity addition. It values the stock 5x FY23E EV/EBITDA with a revised target price of Rs 210 (earlier Rs 195).
