Sugar shares rally; Mawana Sugars, Avadh Sugar zoom up to 20%
Thus far, 15 sugar companies have announced their Q4FY19 results, posting a combined net profit of Rs 919 crore
 "Sugar shares rally; Mawana Sugars, Avadh Sugar zoom up to 20%")
premium
Shares of sugar companies are on a roll, rallied by up to 20 per cent on the BSE on improved operational performance in March quarter (Q4FY19).
Mawana Sugars and Avadh Sugar & Energy have rallied by up to 20 per cent each on the BSE. Uttam Sugar Mills, Magadh Sugar & Energy, Dalmia Bharat Sugar and Industries, Andhra Sugars, Rajshree Sugars & Chemicals, Dhampur Sugar Mills, Triveni Engineering & Industries and Dwarikesh Sugar Mills were up in the range of 8 to 18 per cent on the BSE. In comparison, the S&P BSE Sensex was up 1.1 per cent at 39,255 points at 12:56 pm.
Thus far, 15 sugar companies have announced their Q4FY19 results, posting a combined net profit of Rs 919 crore, as compared to a net loss of Rs 745 crore reported in a year-ago quarter. The same sample of companies had posted an aggregate profit of Rs 208 crore in December quarter, against loss of Rs 2,130 crore in previous year quarter.
The second half of the FY19 experienced many positive changes in the market dynamics. Increase in MSP to Rs. 31, export quotas, augmented prices of ethanol, increase in ethanol realizations have all played a crucial role towards improving the operational margins of sugar companies.
Avadh Sugar & Energy locked in upper circuit of 20 per cent at Rs 616, also its 52-week high on the BSE. The company posted operating profit of Rs 148 crore in Q4FY19 against operating loss of Rs 10 crore in year-ago quarter.
The company said timely support by the Central Government and State Governments has helped in stabilizing sugar prices and ensuring faster payment of cane prices to the farmers. The management is hopeful that the policy decision of diverting sugar capacity towards ethanol production and encouraging exports of sugar will help to rein-in the huge inventories in the industry today.
Triveni Engineering & Industries too hit 52-week-high of Rs 72.60, up 9 per cent on the BSE. The company posted operating profit of Rs 121 crore against loss of Rs 108 crore. The company's board of directors is scheduled to meet on Monday, June 3 to consider, a share buyback proposal.
“The recent initiatives undertaken by the Indian government is expected to address the problems of the sugar sector. Further, the government has attempted to create right environment to encourage higher ethanol production and blending. Hence, we believe the dynamics of the sector are set to change in a structural manner,” analyst at Edelweiss Broking said in sector update.
These steps will moderate the cyclical nature of the sector and will make it more predictable going forward. Initial sign of structural change is already visible, as over the last few months sugar prices have already shown some upward trend and sugar companies are reporting higher profitability, it added.
Mawana Sugars and Avadh Sugar & Energy have rallied by up to 20 per cent each on the BSE. Uttam Sugar Mills, Magadh Sugar & Energy, Dalmia Bharat Sugar and Industries, Andhra Sugars, Rajshree Sugars & Chemicals, Dhampur Sugar Mills, Triveni Engineering & Industries and Dwarikesh Sugar Mills were up in the range of 8 to 18 per cent on the BSE. In comparison, the S&P BSE Sensex was up 1.1 per cent at 39,255 points at 12:56 pm.
Thus far, 15 sugar companies have announced their Q4FY19 results, posting a combined net profit of Rs 919 crore, as compared to a net loss of Rs 745 crore reported in a year-ago quarter. The same sample of companies had posted an aggregate profit of Rs 208 crore in December quarter, against loss of Rs 2,130 crore in previous year quarter.
The second half of the FY19 experienced many positive changes in the market dynamics. Increase in MSP to Rs. 31, export quotas, augmented prices of ethanol, increase in ethanol realizations have all played a crucial role towards improving the operational margins of sugar companies.
Avadh Sugar & Energy locked in upper circuit of 20 per cent at Rs 616, also its 52-week high on the BSE. The company posted operating profit of Rs 148 crore in Q4FY19 against operating loss of Rs 10 crore in year-ago quarter.
The company said timely support by the Central Government and State Governments has helped in stabilizing sugar prices and ensuring faster payment of cane prices to the farmers. The management is hopeful that the policy decision of diverting sugar capacity towards ethanol production and encouraging exports of sugar will help to rein-in the huge inventories in the industry today.
Triveni Engineering & Industries too hit 52-week-high of Rs 72.60, up 9 per cent on the BSE. The company posted operating profit of Rs 121 crore against loss of Rs 108 crore. The company's board of directors is scheduled to meet on Monday, June 3 to consider, a share buyback proposal.
“The recent initiatives undertaken by the Indian government is expected to address the problems of the sugar sector. Further, the government has attempted to create right environment to encourage higher ethanol production and blending. Hence, we believe the dynamics of the sector are set to change in a structural manner,” analyst at Edelweiss Broking said in sector update.
These steps will moderate the cyclical nature of the sector and will make it more predictable going forward. Initial sign of structural change is already visible, as over the last few months sugar prices have already shown some upward trend and sugar companies are reporting higher profitability, it added.
| COMPANY | LATEST | PREV CLOSE | GAIN(%) |
| MAWANA SUGARS | 57.30 | 47.75 | 20.00 |
| AVADH SUGAR | 616.25 | 513.55 | 20.00 |
| UTTAM SUG.MILLS | 139.10 | 119.95 | 15.96 |
| KM SUGAR MILLS | 9.68 | 8.47 | 14.29 |
| DALMIA BHARAT | 123.55 | 111.50 | 10.81 |
| RAJSHREE SUGARS | 25.60 | 23.15 | 10.58 |
| MAGADH SUGAR | 153.00 | 139.10 | 9.99 |
| SIMBHAOLI SUGAR | 10.97 | 10.00 | 9.70 |
| KCP SUGAR &INDS. | 16.05 | 14.70 | 9.18 |
| DWARIKESH SUGAR | 29.55 | 27.25 | 8.44 |
| TRIVEN.ENGG.IND. | 71.60 | 66.65 | 7.43 |
| DCM SHRIRAM INDS | 204.55 | 190.80 | 7.21 |
| DHAMPUR SUGAR | 224.35 | 210.50 | 6.58 |
| BAJAJ HINDUSTHAN | 9.27 | 8.70 | 6.55 |
| RANA SUGARS | 3.30 | 3.12 | 5.77 |
| SH.RENUKA SUGAR | 10.94 | 10.35 | 5.70 |
| KESAR ENTERPRISE | 31.40 | 29.85 | 5.19 |
| PONNI SUG.ERODE | 125.00 | 119.00 | 5.04 |
| SIR SHADI LAL | 36.75 | 35.00 | 5.00 |
| PARVATI SWEETNER | 2.89 | 2.76 | 4.71 |
One subscription. Two world-class reads.
Already subscribed? Log in
Subscribe to read the full story →*Subscribe to Business Standard digital and get complimentary access to The New York Times
Smart Quarterly
₹900
3 Months
₹300/Month
SAVE 25%
Smart Essential
₹2,700
1 Year
₹225/Month
SAVE 46%
*Complimentary New York Times access for the 2nd year will be given after 12 months
Super Saver
₹3,900
2 Years
₹162/Month
Subscribe
Renews automatically, cancel anytime
Here’s what’s included in our digital subscription plans
Exclusive premium stories online
Over 30 premium stories daily, handpicked by our editors
Complimentary Access to The New York Times
News, Games, Cooking, Audio, Wirecutter & The Athletic
Business Standard Epaper
Digital replica of our daily newspaper — with options to read, save, and share
Curated Newsletters
Insights on markets, finance, politics, tech, and more delivered to your inbox
Market Analysis & Investment Insights
In-depth market analysis & insights with access to The Smart Investor
Archives
Repository of articles and publications dating back to 1997
Ad-free Reading
Uninterrupted reading experience with no advertisements
Seamless Access Across All Devices
Access Business Standard across devices — mobile, tablet, or PC, via web or app
SAVE 25%