Synopsis: This ethanol stock surged 12% after Q2 results showed a strong YoY growth with net profit up 588%, EBITDA up 169% and revenue up 13%. Profitability and growth momentum remain intact QoQ as well, keeping the stock in active focus.
This company is a manufacturer of Sugar, Industrial Alcohol, Chlor Alkali Products, Aspirin, Sulphuric Acid, Liquid & Solid Propellants. It also generates power for captive use is now in the focus after it reported Q2 results with 588% growth in net profit for year on year.
With market capitalization of Rs. 1,131 cr, the shares of Andhra Sugars Ltd are currently trading at Rs. 83.45 per share, increasing 12% in today’s market session making a high of Rs. 85.89, from its previous close of Rs. 76.77 per share.
QoQ performance
On a QoQ basis, performance also continued to remain healthy and stable. Sales were marginally lower at Rs. 597 crore from Rs. 600 crore in Q1FY26. EBITDA improved 7% QoQ to Rs. 55.1 crore from Rs. 51.4 crore. Net profit rose 37% QoQ to Rs. 33.6 crore from Rs. 24.5 crore and EPS increased to Rs. 2.41 from Rs. 1.73 in the previous quarter.
YoY performance
On a YoY basis, Andhra Sugars delivered a very strong improvement in performance. Sales grew 13% to Rs. 597 crore from Rs. 528 crore in Q2FY25. EBITDA jumped 169% YoY to Rs. 55.1 crore from Rs. 20.5 crore. Net profit surged 588% YoY to Rs. 33.6 crore from just Rs. 5.03 crore last year. EPS also expanded sharply by 630% YoY to Rs. 2.41 from Rs. 0.33.
Segment Revenue and Results
In Q2 FY26, Andhra Sugars reported income from operations of Rs. 597.4 crore from Rs. 599.7 crore in the preceding quarter and Rs. 528.4 crore in the same quarter last year. Within segment revenue, Industrial Chemicals continues to remain the largest contributor at Rs. 316 crore followed by Chlor-Alkali at Rs. 188 crore. Sugar, Power generation, and Soap also saw minor contribution, while inter segment revenue adjustment stood at Rs. 129 crore.
On the profitability side, consolidated segment result before tax and interest came in at Rs. 45 crore from Rs. 34 crore QoQ and Rs. 69 crore. Chlor-Alkali and Industrial Chemicals remained the key profit drivers, delivering strong positive contributions at Rs. 24.29 crore and Rs. 23.00 crore respectively, while the Sugar segment continued to show an operating loss in the period.
About the company
Andhra Sugars is one of the oldest and most strategically important industrial groups in South India headquartered in Tanuku, Andhra Pradesh. Established in 1947 by Dr. Mullapudi Harishchandra Prasad, it operates in sugar manufacturing, ethanol production, industrial chemicals, aspirin intermediates and renewable bio energy. The company supplies critical intermediates to pharmaceutical companies and also exports chemical products globally.
Return ratios have now turned positive with ROCE at 3.54% and ROE at 2.51%. The company is almost debt-free and trades at just 0.67x its book value, indicating inexpensive valuations. It also maintains a healthy dividend payout of 24.8%, while promoter shareholding has increased by 2.66% QoQ, signalling confidence from the promoter side.
Written by Manideep Appana
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