RENUKA - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 2.4

📊 Core Financials Breakdown

Profitability

ROCE at 9.99% is modest, but ROE is not reported—likely negative due to losses.

EPS is -₹1.58, reflecting a net loss in the latest quarter.

PAT dropped sharply from ₹54.4 Cr to -₹215 Cr, a 59.1% decline, indicating severe earnings volatility.

Balance Sheet Health

Book Value is negative (-₹1.83), which is a red flag for solvency and shareholder equity.

Debt-to-equity ratio is not disclosed, but historically Renuka has carried significant debt.

No dividend yield, which limits shareholder returns.

Cash Flow & Stability

High trading volume and MACD slightly positive suggest short-term momentum.

RSI at 60.2 indicates mild bullish sentiment, but not overheated.

📉 Valuation Metrics

Metric Value Insight

P/E Ratio Not meaningful Due to negative earnings

P/B Ratio Not applicable Negative book value

PEG Ratio Not available Likely distorted due to losses

Intrinsic Value ~₹20–₹25 Estimated well below current price

The stock is overvalued based on fundamentals, despite its low nominal price.

🌾 Business Model & Competitive Edge

Sector: Shree Renuka Sugars Ltd is a leading integrated sugar and ethanol producer, with operations in refining, milling, and bioenergy.

Strengths

Strategic position in ethanol blending and renewable energy

Government support for ethanol blending programs

Challenges

Recent losses and negative book value

Regulatory penalties and operational inefficiencies

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High debt and inconsistent profitability

Despite sector tailwinds, Renuka’s financial health is fragile and execution risks remain high.

📌 Entry Zone Recommendation

Suggested Entry Range: ₹24–₹27

Near 52-week low and below 200 DMA (₹33.5)

RSI and MACD suggest short-term strength, but fundamentals don’t support a higher valuation

🧭 Long-Term Holding Guidance

Avoid Fresh Entry at Current Levels: Fundamentals are weak and valuation is not justified.

Hold Only if Speculative: Suitable for high-risk traders betting on ethanol policy tailwinds.

Watchlist Triggers

Return to profitability

Debt reduction

Institutional accumulation

Renuka is a turnaround candidate, not a value play. If you’re looking for stability, this one’s best kept on a watchlist until the numbers tell a better story.

You can explore more on TopStockResearch’s RENUKA dashboard or Invest Yadnya’s financial overview

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