Export quota hike may trigger up to 33% rally in these 3 sugar stocks

Among individual stocks, Shree Renuka Sugars, Ugar Sugar and EID Parry have zoomed up to 169 per cent so far in 2022. Charts indicate further upside for these select stocks.

Most of the sugar stocks have logged strong gains in the calendar year 2022 thus far. Ugar Sugar Works has been the top performer, with its share price more than doubling - up 169 per cent so far. It is followed by, Shree Renuka Sugars and Ponni Sugars (Erode),  soaring as much as 87 per cent and 58 per cent, respectively.

Among others, Uttam Sugar Mills, Sakthi Sugars and E.I.D. Parry (India) have rallied 45 per cent, 40 per cent and 39 per cent, respectively. Shares of Dwarikesh Sugar Industries, Triveni Engineering & Industries, Rajshree Sugars & Chemicals and Kothari Sugars & Chemicals too have added 34 per cent - 27 per cent each.

Going ahead, sugar stocks are likely to remain in focus amid hopes of approval for higher sugar exports. On November 23, Indian Sugar Mills Association (ISMA), the oldest industrial association aim at establishing connection between the Government and the Sugar industry, said the Indian sugar industry was eyeing to raise sugar export for the season 2022-2023. 

India is the second largest exporter of sugar after Brazil, and have exported over 11 million tonnes (MT) of sugar in last October-September season of 2021-2022. However, owing to the recent restrictions, exports have been so far capped to 6 MT for the current season. ISMA said an additional 2-4 MT of sugar exports may be allowed this season.

So, in the midst of hopes of this positive trigger for sugar stocks, here’s the technical outlook to help you understand their next moves on select shares:- 

Shree Renuka Sugars Limited (RENUKA)

Likely target: Rs 75

Upside potential: 33%

While there is a negative divergence of the Relative Strength Index (RSI) on the weekly chart, the stock price action is not letting selling pressure dominate proceedings for now. The stock has been rising, with “Higher High, Higher Low” formation, exhibiting firm resilience. The current trend has a support at Rs 42, with the bullish trend eyeing Rs 75. CLICK HERE FOR THE CHART

Ugar Sugar Works Limited (UGARSUGAR)

Likely target: Rs 95

Upside potential:  18%

Shares of Ugar Sugar Works continue to honour the cushion of the 200-day moving average (DMA) since late 2020. The 200-DMA is currently set at Rs 61.50 and stays as a medium-term support. The immediate support for the stock comes at Rs 72, which was the breakout mark in October this year. Until this support is not violated, the bullish trend is likely to reach a new all-time high of Rs 95 level. CLICK HERE FOR THE CHART

Kothari Sugars & Chemicals (KOTARISUG)

Outlook: Struggling to surpass Rs 50

Kothari Sugars & Chemicals shares are currently struggling to resolutely cross the hurdle of Rs 50. If the stock fails to surpass this hurdle, the weakness could dent the positive bias. The immediate support for the stock is seen at Rs 35 level. To regain street confidence, the stock needs to cross Rs 50 with strong volumes. Above Rs 50, the breakout could reach Rs 65 levels. CLICK HERE FOR THE CHART

Triveni Engineering & Industries Limited (TRIVENI)

Outlook: Needs to take of Rs 300 mark
 

The stock is currently hovering around the 200-DMA set at Rs 272.30. To breakout on upside, the stock needs to absorb all the selling pressure existing closer to the Rs 300 mark. If it manages to conquer the said hurdle, then only the stock could head in the direction of Rs 340, where the next sell-off appears to emerge, as per the daily chart.  CLICK HERE FOR THE CHART

E.I.D. Parry (India) Ltd (EIDPARRY)

Likely target: Rs700

Upside potential:  14%

The medium-term outlook points to a steady upside for the E.I.D Parry stock. The current trend shows accumulation on every healthy correction, which is likely to boost the underlying sentiment. The immediate support for the stock is seen at Rs 550 and Rs 500 levels. The bullish candlestick patterns hints to an upside towards Rs 700-mark. CLICK HERE FOR THE CHART