Sugar stocks gain as ISMA lowers production estimate for 2018-19 season
Dhampur Sugar, Balrampur Chini, Dalmia Bharat Sugar, Uttam Sugar, Triveni Engineering & Industries, Dwarikesh Sugar and Thiru Arooran were up 3% to 10% on the BSE.
 "Sugar stocks gain as ISMA lowers production estimate for 2018-19 season")
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Shares of sugar companies were trading higher by up to 10% on the BSE in early morning trade after Indian Sugar Mills Association (ISMA) lowered its nation-wide sugar production estimate for the current sugar season (SS) 2018-19.
Among the individual sugar stocks, Dhampur Sugar Mills is locked in upper circuit of 10% at Rs 171 on the BSE, with only buyers seen on the counter. A combined 652,211 equity shares have changed hands till 09:32 am and there were pending buy orders for 411,518 shares on the BSE and NSE.
Balrampur Chini Mills, Dalmia Bharat Sugar and Industries, Uttam Sugar Mills, Triveni Engineering & Industries, Dwarikesh Sugar and Thiru Arooran Sugars were up 3% to 6% on the BSE. In comparison, the S&P BSE Sensex was down 0.25% at 33,981 points.
India's sugar output may decline by 3% to 31.5 million tonnes (MT) in the current marketing year on untimely rains and pest attacks that affected the cane crop, as well as the diversion of cane juice for ethanol, industry body ISMA said on Monday. The sugar mills body has given many reasons ranging from adverse weather impact to grub infestation in the crop.
Sugar production during the current 2018-19 SS is being reported to be lower than what was expected about 3-4 months back. The crop in the three main sugarcane growing states, namely, Uttar Pradesh, Maharashtra and Karnataka which contribute for around 80% of country’s sugar, have all been adversely impacted due to various reasons, it added.
The ISMA in July had projected a production of 35 MT in the 2018-19 season that started this month, taking into account higher cane acreage and forecast of a normal monsoon. Sugar production reached an all-time high of 32.5 million tonnes in the 2017-18 marketing year (October-September).
In past one month, the frontline sugar stocks have rallied by up to 58% against 6% decline in the benchmark index.
In order to stabilize sugar prices at a reasonable level and to improve the liquidity position of the mills thereby enabling them to clear the cane price arrears of farmers, the Central Government took the slew of measures in past six months.
The rating agency CRISIL expects EBITDA margins for its sample set of 24 companies (large proportion being integrated public listed entities) to improve to 600-800 bps in SS 2018-19 from (5)-(7)% expected earlier to 0-2% in SS 2018-19.
Integrated mills that upgrade distilleries could see a higher margin improvement of up to 1,000-1,100 bps. Along with a decline in raw material cost, they would see a 20% increase in revenue from the distillery segment driven by higher realizations for ethanol, the rating agency said in recent note.
Among the individual sugar stocks, Dhampur Sugar Mills is locked in upper circuit of 10% at Rs 171 on the BSE, with only buyers seen on the counter. A combined 652,211 equity shares have changed hands till 09:32 am and there were pending buy orders for 411,518 shares on the BSE and NSE.
Balrampur Chini Mills, Dalmia Bharat Sugar and Industries, Uttam Sugar Mills, Triveni Engineering & Industries, Dwarikesh Sugar and Thiru Arooran Sugars were up 3% to 6% on the BSE. In comparison, the S&P BSE Sensex was down 0.25% at 33,981 points.
India's sugar output may decline by 3% to 31.5 million tonnes (MT) in the current marketing year on untimely rains and pest attacks that affected the cane crop, as well as the diversion of cane juice for ethanol, industry body ISMA said on Monday. The sugar mills body has given many reasons ranging from adverse weather impact to grub infestation in the crop.
Sugar production during the current 2018-19 SS is being reported to be lower than what was expected about 3-4 months back. The crop in the three main sugarcane growing states, namely, Uttar Pradesh, Maharashtra and Karnataka which contribute for around 80% of country’s sugar, have all been adversely impacted due to various reasons, it added.
The ISMA in July had projected a production of 35 MT in the 2018-19 season that started this month, taking into account higher cane acreage and forecast of a normal monsoon. Sugar production reached an all-time high of 32.5 million tonnes in the 2017-18 marketing year (October-September).
In past one month, the frontline sugar stocks have rallied by up to 58% against 6% decline in the benchmark index.
In order to stabilize sugar prices at a reasonable level and to improve the liquidity position of the mills thereby enabling them to clear the cane price arrears of farmers, the Central Government took the slew of measures in past six months.
The rating agency CRISIL expects EBITDA margins for its sample set of 24 companies (large proportion being integrated public listed entities) to improve to 600-800 bps in SS 2018-19 from (5)-(7)% expected earlier to 0-2% in SS 2018-19.
Integrated mills that upgrade distilleries could see a higher margin improvement of up to 1,000-1,100 bps. Along with a decline in raw material cost, they would see a 20% increase in revenue from the distillery segment driven by higher realizations for ethanol, the rating agency said in recent note.
| COMPANY | LATEST | ONE-MONTH BEFORE | GAIN(%) |
| BALRAMPUR CHINI | 110.75 | 70.90 | 56.21 |
| DHAMPUR SUGAR | 171.15 | 110.45 | 54.96 |
| UTTAM SUG.MILLS | 148.00 | 98.10 | 50.87 |
| DWARIKESH SUGAR | 29.00 | 21.20 | 36.79 |
| DALMIA BHARAT | 95.05 | 70.55 | 34.73 |
| DCM SHRIRAM INDS | 213.55 | 159.40 | 33.97 |
| BAJAJ HINDUSTHAN | 10.74 | 8.29 | 29.55 |
| TRIVEN.ENGG.IND. | 48.75 | 38.85 | 25.48 |
| AVADH SUGAR | 505.55 | 408.15 | 23.86 |
| THIRU AROOR. SU. | 30.60 | 25.70 | 19.07 |
| SH.RENUKA SUGAR | 13.84 | 11.87 | 16.60 |
| MAWANA SUGARS | 56.55 | 48.85 | 15.76 |
| EID PARRY | 226.70 | 198.45 | 14.24 |
| DHARANI SUGARS | 15.00 | 13.43 | 11.69 |
| UGAR SUGAR WORKS | 15.10 | 14.25 | 5.96 |
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