Sudar Industries - decent track record at throwaway valuation?

Sudar Industries

Small cap firm which is in the business of Garments manufacturing and exports based out of Maharashtra. It went public in 2011. It also acquired an Agro chemicals company by the name of Benzo Petro International Ltd.

Has inhouse apparel brands of - Glory to Glory, Majesty and St. Paul . Also is Contract Manufacturer for domestic brands and merchant exporters.

Chemicals Unit is engaged in the manufacture of pharmaceutical intermediaries and also does CRAMS

Currently their apparels business forms a 62% of topline and agrochemical forms 38% of topline. They expect huge jump in revenue from Agrochemicals.

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Currently I feel the business is deeply undervalued with EPS of Rs 23 and the current price of share at Rs 26.90

**ROCD = 30%
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** Debt/Equity = 1**

Is this a value buy or a value trap?

do you saw that Secured Loans column? I don’t like it.

80 % of the promoters shares are pledged. I am tracking this company fo last six months but not invested right now.

Share may look undervalued but thier is something which market knows and we dont , for which its tradeing on verylow multiples.If someone has any knowlege on this. Please share

Also , Promoters share holding is v less , near about 30% only ,operating cash flows are negative , High debt to equity.

Isn’t the pledging done to secure the loans to fund expansion? If not what may be the other reasons?

I am just trying to understand why the promoters may pledge their equity and if they do try and undertake aggressive expansion what is wrong with it?

when the stock is so cheap why is the promoter holding coming down???

The track record is not great. Pls have a look at the Q2 numbers. The sale has ground to a standstill. While still expenses for 25Cr. were made.
Meanwhile, the share price continued to drop to unrealistic levels. One wonders, if the management was prudent, why wouldn’t they buy their shares from the open market at such throwaway prices?
All this smells extremely fishy.

DISC: Invested earlier. Sold all holdings. Currently, not invested. Just Tracking.