Sugar shares rally; hit fresh 52-week high

Uttam Sugar, Sakthi Sugars, Simbhaloi Sugars, Shree Renuka, Upper Ganges, Mawana Sugars and Thiru Arooran have rallied more than 10% each.

Shares of sugar producing companies are  back into focus with most of the stocks from the sector trading at their fresh 52-week highs on the Bombay Stock Exchange (BSE) in an otherwise weak market.

Uttam Sugar Mills, Sakthi Sugars, Simbhaloi Sugars, Upper Ganges Sugar, Mawana Sugars, Thiru Arooran Sugars and Shree Renuka Sugars have rallied more than 10% each as compared to 0.19% decline in the Sensex.

Among the individual stocks, Uttam Sugar Mills has locked in upper circuit of 20% at Rs 30.20, also its fresh 52-week high, after the company said it expects to generate positive cash flow and profitability in future.

Sakthi Sugars too surged 20% to Rs 32.30 on the BSE on back of heavy volumes. The company said the Dhenkanal sugar unit of the company has commenced its operation for the crushing season 2015-16 from November 13, 2015.

EID Parry believes that going forward, if the momentum on sugar price is sustained/improved, the sugar year 2015-16 will be a better year than sugar year 2014-15, which was the most challenging year for the company in the last few decades.

The sugar prices have moved up 25% since August, after estimates of the cane crop being impacted due to less rain and strengthening of international prices, which opens export opportunities. CLICK HERE TO READ FULL REPORT.

Meanwhile, the aggregate net loss of 40 sugar companies declined to Rs 627 crore in September 2015 quarter from Rs 1,323 crore in June 2015 quarter. These companies had net loss of Rs 818 crore in September 2014 quarter.