Sakthi Sugars Ltd 507315

Name of Company	Sakthi Sugars ltd
BSE Code	507315
NSE Code
ICICI Code
Established	1961
My Take	Dislike
Headquarters	Coimbatore
Promoters
Story	One of the largest sugarcane producers in India (13,500 tonnes cane crushed per day). Company has been in place for very long and has seen 3 generations take over. Has 3 units – Sakthinagar, Sivaganga unit and Dhenkanal (Orrisa). Sugar is exported. In Mar 2010, some rumors floated around Sakthi auto components a fully owned subsidiary being lined up.
Sector	Sugar
Sub-sector	Manufactures white sugar, molasses, bagasse, industrial alcohol, mechanical harvesters.
Website	http://www.sakthisugars.com/
Positives	Revenues have grown from 600 Cr in FY05 to 1374 Cr in FY09 (revenues more than doubled, FY08,09 ends in Dec, FY08 is 18 months). The profitability at 7-10% also looks good and the company has maintained profitability except in FY08. 176 Cr market cap for company which earns 1300 Cr and ends with a profit of > 100 Cr seems low. P/E is at 1.22. Company has plans to setup two co-generation plants and a green-field sugar mill near Erode and has raised $16 mi through FCCBs.
Negatives	Promoters have 33% stake, but have pledged 31% stake. This is a huge negative which reflects Satyam saga. Quarter results do not have any provision for taxation – only year-end seems to have tax accounted for (this incorrectly shows quarter profits and NPM). Plans in Auto and new plant needs to be looked at closely.
Peers	Shree Renuka, Bajaj Hindustan, Balrampur Chini, Triveni Engg
News	FY09 Notes to account, Erode plans, Auto Component plans