Tuesday 31 May 2016

KM SUGAR MILLS LTD - Interesting Penny Stock in the Sugar Sector

MCAP: 60 Odd Crores.
CMP: Around 7/-

The company yesterday announced its results for March 2016 quarter and the annual performance is as follows :- Link To Results

The company has changed FY year from Sept to March so I put the number by taking four quarters of FY15 as per the calendar year to make it comparable.

The company has turned net profit positive to the tune of 11.69 crores against market cap of 60 odd crores, the reserves have risen, the short-term borrowing has reduced, their is still 155 crores inventory.

The TCD capacity is at 10000, as much as Rajshree Sugars which has around 11500.
KM Sugar has debt to equity of 8, Rajshree Sugars has debt to equity of 14.

Rajshree Sugars stock prices have rallied from Rs 10 odd to Rs 50+ in the recent Sugar Rally. Even as Rajshree Sugars ended FY16 with a loss of 15 crores.

KM Sugar on the other hand has proposed to come out of CDR.

Highly unlikely that KM Sugars share prices can dip below face value when in profit.

UP based Sugar Mills are in focus as there is a global shortage in Sugar supply vis-a-vis Demand.

Past sugar cycle suggest we might be at a infancy stage of a larger bull run in the global sugar prices and sugar shares prices. A famous forum on stock market ValuePickr has a pretty detailed thread on Sugar sector which is updated with the latest buzz and news with charts/logical explanations etc on: http://forum.valuepickr.com/t/sugar-cycles-7-8-years-of-losses-followed-by-2-3-years-of-super-gains/657?page=1

Note: The above is not a research report but information as available on public domain and it should not be treated as a research report.

Registration status with SEBI: I am not registered with SEBI under the (Research Analyst) regulations 2014 and as per clarifications provided by SEBI: “Any person who makes recommendation or offers an opinion concerning securities or public offers only through public media is not required to obtain registration as research analyst under RA Regulations”

Disclosure: It is safe to assume that i might have KM SUGAR MILLS LTD in my portfolio and hence my point of view can be biased. Readers should consult their financial advisory before any investments.


  1. ����Its a SURE SHOT

  2. Not sure abt 50 . But 20-25 damn sure. I am holding from lower levels

  3. Hi , I just checked MMB and see people marking ur messages as "offensive" . I think that is too much sadism . Sorry for these words but , thats not right to do. U have ur own fan base and please keep up the good work

  4. debt to equity ~9 !!!!
    are you going to suicide?

    1. Penny stocks are not investment grade stocks.

      All kind of views are welcome here, Regarding Debt/Equity already mentioned it and also compare it with Rajshree debt/equity you will understand what i am saying.

  5. The company posted excellent result and coming out of CDR. Big positive.

  6. excellent pick... it has already moved up.

  7. sir Great finding. What u mean by CD-R? can i buy this rate please suggest asap today i want purchase hug qty

  8. KM Sugar Debt Equity is just about 2(Debt of 68 cr vs Equity of 28 cr) as of March 31, 2016. Debt will be further reduced in the coming qtr and D/E might just become 1 by Sep. Seems like, KM has still lot of upside from the CMP. With June Q results, with CMP it will be trading at around 5 PE.