Can anyone tell me why this one trades at such cheap valuation, even on FY27 guided earnings? Is there any past corporate governance issue??
First of all the Bulk Segment which contributed 100Cr to the topline has nearly zero ebidta margin.
Major growth is expected from Ethanol which again depends on the tender winning.
Branded Products(FMCG) are into top premier segment which I doubt can expand exponentially.
With these things, I don’t think market would give a high valuation rating. Most of the FMCGs of this kind would command valuations of 15-20x PE in a base case.
But as per the latest Q4FY26 concall, they are very confident to surpass their FY27 guidance.
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you have taken into account the granted capacity but the actual installed capacity is 282 KLPD. And the utilization will be ramped up gradually when the demand comes given company wins the tenders.
Margins will improve only if the utilization improves otherwise margins will be dragged.
So, it’s not available at 3.7 PE
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Yes, you are correct. This is not 3.7 price-earning ratio as of now. The data which I have mentioned is from the presentation published by the company. And the current capacity of 282 KL of ethanol is the very recent data that company has published.
And this 3.7 PE ratio is a figure which is derived in case the company utilized its full capacity. The FMCG segment is not contributing significant profits at the moment, but it still has value. It is not a worthless asset. If the company decides to sell this business in the future, it will not be sold for free—it will command some value.