Bajaj Hindusthan Sugar limited : Is it Good to Invest in this stock?

Bajaj Hindusthan Sugar limited : Is it Good to Invest in this stock?

Vision of Bajaj Hindusthan Sugar limited

To be leader in its segment through ethical business practices that will create wealth for the stakeholders in long run by setting right benchmarks for growth.

Mission of Bajaj Hindusthan Sugar limited

The paramount objective of the company us to create long term wealth for the stakeholders by transforming the company into a dynamic and vibrant business entity.

History of Bajaj Hindusthan Sugar limited

  • Bajaj Hindusthan Sugar limited was established in the year 23rd November 1931. At that time company name was The Hindusthan Sugar Mills limited and the venture was started by Jamnalal Bajaj.
  • The first plant was established at Golagokarannath, Uttar pradesh an area of rich in sugar cane. The capacity of plant was 400 tons of crane crushed per day (TCD). In subsequent years the current capacity of the plant is 13000 (TCD).
  • In 1967, company established new subsidiary – Sharda sugar & Industries ltd. The objective of this unit is to help farmers to produce sugar canes near the factory. This has helped the company to save transport cost and currently the unit is having a capacity of 11000 (TCD).
  • In 1988, the company was renamed as Bajaj Hindusthan Sugar limited and Sharda sugar & Industries ltd was amalgamated.
  • From 2003 to 2007, the company was really aggressive in greenfield expansion. Today the company is having ten sugar manufacturing plants with 96000 TCD and country’s largest ethanol producer with 480 KL/day output.     
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  1. Sugar Manufacturing Process: From sugarcane to sugar crystals the process of manufacturing sugar.
  2. By products from sugar making process are as follows
  • Molasses
  • Bagasse
  • Fly ash
  • Press Mud

Molasses mainly used for alcohol, yeast & cattle feed.  Around 4.5% to 5% is Molasses in each ton of sugar cane manufacturing.  90% is consumed by industrial alcohol manufacturers and 10% is used in potable alcohol sector. 

Bagasse is used as a raw material in production of paper and as feedstock of cattle. It can also be used for power generation by electricity boards.

Fly ash is a substitute for firewood  and is also used by local farmers for cultivation.

Press Mud is high quality bio-manure to improve soil quality.

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Bajaj Hindusthan Sugar limited
Bajaj Hindusthan Sugar limited
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Bajaj Hindusthan Sugar limited

Financial Statement Analysis

  1. Profit & loss Statement Analysis: In last 12 years, company’s revenue is increasing at a CAGR of 10.43% and its expenses are increasing at a CAGR of 12%. This is why company’s operating profit has a negative CAGR of 7.48%. Net profit has turned deep in negative zone (-291 cr in March 2021) from 62 cr in March 2009. Rising interest cost has really proved to be devastating for the company.
  2.  Balance sheet Statement Analysis: Borrowings are more than company’s networth . This means that company has high leverage risk. Not good for shareholders. Avoid the share is best for the investors.
  3. Cashflow Statement Analysis: Company has a negative cash flow figure when you add the total from Operating, Investing & Financing activity. Whatever company earn money from the operating activity get burned by paying high interest cost. Nothing get left for the expansion of the company.
  4. Ratios: Ratios of the company are also not good. Return on capital employed is negative for the company. This is not good sign for the investors.
  5. Shareholding pattern: Only 15.43% is the stake with promoters suggest not good picture for the company. Avoid the stock.

How to invest ?

You need a stock trading account with negligible brokerage to invest in this stock. We have tied up with best selling company in order to make your investment possible hassle free. We understand you and that is why think about your hard earned money.

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