A majority of sugar stocks are currently trading at their 52-week lows. Prices of these scrips have declined by more than half (50 per cent) on anticipation of excess supply on the back of higher output this season as well as ban on exports. | |
| Of the 40 listed sugar companies, 14 hit their lowest levels this month as it was believed that they hardly had potential to generate higher revenues on lower sugar and ethanol prices, with the existing facilities. |
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| However, the fact that most of the sugar companies have expanded their crushing and co-generation capacities may ensure that they performance better in the near future. |
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| Bannar Amman Sugars tumbled 53.86 per cent to Rs 795 on Wednesday from its peak of Rs 1,723.20 on April 4. Similarly, EID Parry, Dhampur Sugar and Balrampur Chini recorded a slump of 61.63 per cent, 68.54 per cent and 59.54 per cent to Rs 141, Rs 85.10 and Rs 82.50 from the highs of Rs 369 (May 15), Rs 271.90 (March 31) and Rs 205 (April 21), respectively. |
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| The Dwarikesh Sugar, Kesar Enterprises and Simbhaoli Sugar scrips, too, plunged 69.84 per cent to Rs 87, 66.42 per cent to Rs 80.20 and 62.57 per cent to Rs 62 from the year high of Rs 307.70 (February 14), Rs 279.75 (April 10) and Rs 177 (March 30), respectively. |
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| Empee Sugars and Mawana Sugars followed suit with a record fall of 70.46 per cent and 63.37 per cent to Rs 11.20 and Rs 54.05 from the highs of Rs 40.15 (January 24) and Rs 150 (January 3), respectively. |
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| Some stocks are hovering around their 52-week lows that they had touched late last year or early this year. They include frontline companies such as Bajaj Hindusthan, Triveni Engineering, Gayatri Sugar and KM Sugar Mills, to name a few. |
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| The Bajaj Hindusthan counter, today, was quoting at Rs 257.80, a tad higher than its 52-week low of Rs 219 on December 6 last year. The stock touched a high of Rs 568.80 on April 21 amid a tight-supply situation in the spot market. Triveni Engineering slumped to a low of Rs 53.25 on December 13 last year but recovered steadily to scale a peak of Rs 129.95 on March 31. Gayatri Sugar and KM Sugar Mills kissed their lowest levels of Rs 8.21 and Rs 33 on July 24 from the highs of Rs 26.95 (January 20) and Rs 106 (December 26), thus losing 65.97 per cent and 58.40 per cent, respectively. |
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| Sugarcane crushers are of the view that the real picture is different from what has been painted. |
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| They expect output to fall 10-15 per cent from the earlier estimated level "� before the beginning of the season on the back of low recovery owing to late harvesting and adverse climatic conditions. |
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| "This is a temporary phase, which will be overcome very soon. We estimate the output to be optimum, to the tune of 22 million tonne versus 23 million tonne projected earlier. Thus, the sentiment will change once the government opens exports," said B J Maheshwari, assistant vice-president, Dwarikesh Sugar. |
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| "The industry has an export commitment of about 2 million tonne, which, with total consumption of 20 million tonne, will offset the estimated output this year. So, the carry-forward stock of 4.5 million tonne is not large enough to make a noise," he added. |
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| Sanjay Tapriya, director (finance), Simbhaoli Sugar Mills, however, is optimistic about a turnaround on huge revenue generation from carbon credit, co-generation and ethanol. "Sugar is not the only factor to focus on. Subsidiary activities should be factored in to have a clear idea about the company's future," he said. |
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| Maharashtra and Uttar Pradesh have already lowered their sugar production estimates to 60 lakh tonne (70 lakh tonne) and 71 lakh tonne (75 lakh tonne). The sugar recovery in the former is pegged at 10.5-11 per cent compared with 11.5-12.5 per cent last year. |
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| Uttar Pradesh, too, lowered its recovery rate by 0.5 per cent for the current season to 9.3-9.5 per cent from 9.9-10.1 per cent last season. |
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