Basmati rice stocks rally; LT Foods, KRBL hit 52-week high

LT Foods, KRBL, Kohinoor Foods and Chaman Lal Setia were up 5% to 15% on the BSE

Shares of basmati rice producers rallied by up to 15% on the BSE on back of heavy volumes on expectation of higher realisations despite short-term impact of demonetisation, due to lower production volume and stable global demand.

LT Foods, KRBL, Kohinoor Foods and Chaman Lal Setia Exports were up in the range of 5% to 15% on the Bombay Stock Exchange (BSE), as compared to 0.34% decline in the S&P BSE Sensex at 11:26 pm.

According to rating agency ICRA, there has been a steady growth in the domestic market, although demonitisation should adversely impact the demand in the near term.

With regard to the international demand, Q1 FY2017 has reported some improvement, resulting in an increase in export realisations; however, the overall demand scenario has not changed much. The demand in the export market is expected to witness some pickup in the coming months when a majority of the export orders are received.

This would help the industry, which is currently reeling under stress, owing to losses suffered in past. There is a likelihood of an increase in realisations in H2 FY2017 and FY2018 and the players holding inventory, which had been bought at low prices, are expected to benefit from this, ICRA said in recent report.

LT Foods, the company engaged in the manufacture and sale of rice under the brand DAAWAT, has rallied 15% to Rs 331, also its 52-week high on BSE in intra-day. The trading volumes on the counter jumped more than 10-fold with a combined 561,135 shares changed hands on the BSE and NSE so far.

Chaman Lal Setia Exports (up 11% at Rs 107) and KRBL (6% at Rs 317) too hit their respective 52-week highs, while Kohinoor Foods was up nearly 10% to Rs 80 on the BSE in intra-day trade.