Sugar stocks gain in weak market; Balrampur Chini, Dhampur Sugar up over 8%

Balrampur Chini, Dalmia Bharat Sugar, Dhampur Sugar, Uttam Sugar, Dwarikesh Sugar and Thiru Arooran were up in the range of 5% to 13% on the BSE, as compared to 0.45% decline in Sensex at 01:24 PM.

Shares of sugar companies were trading higher by up to 13% on the BSE in an otherwise weak market on hopes of posting better than expected operating numbers in coming quarters on the back of firming sugar prices, gains arising from sugar inventory revaluation, higher profitability from their distillery and co-gen segment.

Balrampur Chini Mills, Dalmia Bharat Sugar and Industries, Dhampur Sugar Mills, Uttam Sugar Mills, Triveni Engineering & Industries, Dwarikesh Sugar and Thiru Arooran Sugars were up in the range of 5% to 13% on the BSE. In comparison, the S&P BSE Sensex was down 0.45% at 33,999 points at 01:24 PM.

“After facing an adverse operating environment due to a record domestic sugar production last year, the industry is steadily recovering. This revival has been supported by the Central and State Governments who have effectively intervened and taken several initiatives over the past few months. We are hopeful that the Government will continue to take more proactive measures and put in place a rationale cane pricing policy which ensures the long-term sustainability of the sector,” said Vivek Saraogi, Managing Director, Balrampur Chini Mills.

Total 15 sugar companies thus far announced their July-September quarter (Q2FY19) results, have posted 86% year-on-year (Y-o-Y) declined in their aggregate net profit of Rs 529 million. These companies had posted a combined profit of Rs 10.38 billion in the same quarter last fiscal. Total sales down 7% Y-o-Y at Rs 124 billion from Rs 134 billion in the corresponding quarter of previous year.

"Depressed sugar prices due to surplus production in the country continued to impact the performance of the company in Q2FY19 together with reduced sale volumes on account of the Release Order mechanism. Also, heavy rains during the quarter affected the distillery operations in Karnataka and Andhra Pradesh units,” EID Parry said in a press release.

The Government of India has been taking various supportive measures in order to provide stability to the sugar prices, in the form of buffer stock mechanism, minimum support price for sugar, export quota and related subsidy and an upward revision of ethanol price including ethanol supply from B heavy molasses and cane juice. Further, Tamilnadu Government has taken positive steps to increase the domestic sales of alcohol within the state by regulating import from other States. These would augur well for the Company in the coming quarters, it added.

COMPANY	LATEST	PREV CLOSE	GAIN(%)
DALMIA BHARAT	108.90	96.80	12.50
KCP SUGAR &INDS.	21.50	19.20	11.98
TRIVEN.ENGG.IND.	54.30	49.40	9.92
DHAMPUR SUGAR	176.65	162.65	8.61
BALRAMPUR CHINI	117.75	108.90	8.13
BANNARI AMM.SUG.	1899.00	1758.40	8.00
UTTAM SUG.MILLS	153.00	142.75	7.18
BAJAJ HINDUSTHAN	11.86	11.17	6.18
THIRU AROOR. SU.	31.70	29.95	5.84
DCM SHRIRAM INDS	219.90	207.85	5.80
EID PARRY	245.90	233.70	5.22
AVADH SUGAR	452.65	431.10	5.00
MAGADH SUGAR	108.60	103.45	4.98
SIMBHAOLI SUGAR	12.78	12.18	4.93
UGAR SUGAR WORKS	15.44	14.72	4.89
KESAR ENTERPRISE	31.30	29.85	4.86
MAWANA SUGARS	56.10	53.50	4.86
DWARIKESH SUGAR	29.25	27.90	4.84