Stock Review: Andhra Sugars

Andhra Sugars is engaged in sugar production, organic and inorganic chemicals and wind power generation. Its net sales and profit have been falling since the past four quarters. The lower profitability has been due to a decline in the realisations of sugar. The prices of chloro alkali products — the inorganic chemicals manufactured by the company — have also been on a decline. This downward trend has had an adverse impact on the company's overall profitability. The Andhra Sugar's stock has taken a beating on the bourses since September 2010. It is now hovering around its 52-week low of 101. As a result, its dividend yield has gone up to 4.6%. The company generates positive cash flows and has reduced its debt-equity ratio to 0.74 in FY10. Investors can wait for the