Multibagger sugar stock jumps 4% as it enters into agreement with GAIL and MNGL

SYNOPSIS: MVK Agro Food Product has signed an agreement with MNGL and GAIL to supply biogas/CBG under the CBG–CGD Synchronisation Scheme.

During Wednesday’s trading session, shares of an integrated sugar and other allied products manufacturing company surged nearly 4.5 percent on NSE, after entering into an agreement with Maharashtra Natural Gas Limited (MNGL) and GAIL (India) Limited for CBG supply.

At 01:27 p.m., shares of M.V.K. Agro Food Product Limited were trading in the green at Rs. 790 on NSE, up by around 2 percent, compared to its previous closing price of Rs. 778.2, with a market cap of Rs. 3,990 crores. The stock has delivered multibagger returns of over 1,923 percent in one year, and has gained by around 454 percent in the last six months.

What’s the News:

According to the latest disclosures filed with the NSE, MVK Agro Food Product Limited has entered into a Tripartite Agreement with Maharashtra Natural Gas Limited (MNGL) and GAIL (India) Limited for the supply of Biogas/Compressed Biogas (CBG) under the CBG-CGD Synchronisation Scheme. The value of the agreement will be finalised at the time of supply of goods and services.

Financials & More:

MVK Agro reported a marginal growth in revenue from operations, experiencing a year-on-year increase of around 6 percent, from Rs. 141.4 crores in FY24 to Rs. 149.7 crores in FY25. Likewise, its net profit increased during the same period from Rs. 8.7 crores to Rs. 9.33 crores, representing a marginal rise of over 7 percent YoY.

M.V.K. Agro Food Product Limited operated across the agro-commodity value chain, primarily engaged in the business of manufacturing food products, with a core focus on producing jaggery from sugarcane. 

During sugar manufacturing, by-products such as bagasse, molasses and pressmud are accumulated. These are commercially supplied to third-party bio-coal and ethanol manufacturers by the company, enabling full value-chain integration and waste utilisation. The company operates an integrated sugar manufacturing facility in Nanded, Maharashtra, with a capacity of 2,500 TCD.

The stock was listed on 7th March 2024, and as outlined in its RHP, the IPO proceeds were primarily earmarked for setting up a greenfield facility in Nanded, Maharashtra, focused on ethanol manufacturing along with bio-CNG generation and fertiliser bottling, with an estimated allocation of Rs. 52.38 crore.

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