Building up an investment case requires looking at a stock holistically. Today I've chosen to put the spotlight on K.M. Sugar Mills Limited (NSE:KMSUGAR) due to its excellent fundamentals in more than one area. KMSUGAR is a company that has been able to sustain great financial health, trading at an attractive share price. Below, I've touched on some key aspects you should know on a high level. For those interested in digger a bit deeper into my commentary, take a look at the report on K.M. Sugar Mills here.

Undervalued with excellent balance sheet

KMSUGAR is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This suggests prudent control over cash and cost by management, which is a key determinant of the company’s health. KMSUGAR's has produced operating cash levels of 10.98x total debt over the past year, which implies that KMSUGAR's management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings. KMSUGAR is currently trading below its true value, which means the market is undervaluing the company's expected cash flow going forward. According to my intrinsic value of the stock, which is driven by analyst consensus forecast of KMSUGAR's earnings, investors now have the opportunity to buy into the stock to reap capital gains. Also, relative to the rest of its peers with similar levels of earnings, KMSUGAR's share price is trading below the group's average. This supports the theory that KMSUGAR is potentially underpriced.

Next Steps:

For K.M. Sugar Mills, there are three important aspects you should look at:

1. Future Outlook: What are well-informed industry analysts predicting for KMSUGAR’s future growth? Take a look at our free research report of analyst consensus for KMSUGAR’s outlook.

2. Historical Performance: What has KMSUGAR's returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.

3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of KMSUGAR? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.