The shares of Ugar Sugar Works Ltd rallied 15.11% to reach an intraday high of ₹ 93.70 apiece on the National Stock Exchange (NSE). They closed at ₹ 89.85 apiece, up 10.38% on Monday.
Ugar Sugar Works Ltd. is engaged in the manufacture and sale of sugar, industrial and potable alcohol, and the generation and distribution of electricity.
The government recently said that it is going to allow the export of sugar up to 6 million tonnes during the sugar season FY23. This move came to protect the interest of farmers and sugar mills as they will be able to take benefits of the favourable international sugar price scenario.
Many sugar mills have been aggressively signing export deals within days of receiving government approval. Experts believe that mills are likely to sell the entire allocated quota of 6 million tonnes before the end of December.
Ugar Sugar Works started sugar-crushing for the season 2022-23 at its Jewargi Unit on November 03, 2022, and the same will pick up at full capacity in due course.
The company’s share price has been on an uptrend. In the past year, the company delivered multibagger returns of 253.61% as its share price increased from ₹ 25.65 to ₹ 90.70. Therefore, if an investor would have invested ₹ 1 lakh in the company’s shares one year ago, the value of their holdings would have been ₹ 3.53 lakhs today!
Ugar Sugar Works is a small-cap company with a market capitalization of ₹ 916 crores. It has an excellent return on equity of 42.84%. However, it has a high debt-to-equity ratio of 4.14. Its shares were trading at a price-to-equity ratio (P/E) of 15.71 which is lower than the industry P/E of 19.47, indicating that the stock might be undervalued.
Written by Simran Bafna
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