Sugar stocks rally on hope of turnaround

Balrampur Chini, Bajaj Hindustan, Dwarikesh Sugar, Dhampur Sugar, Simbhaoli Sugar and Shree Renuka Sugars are up 4-6% on the BSE.

Shares of sugar companies have rallied by up to 6% in otherwise subdued market on hopes turnaround this financial year.

Balrampur Chini Mills, Bajaj Hindustan, Dwarikesh Sugar Industries, Dhampur Sugar Mills, Simbhaoli Sugar Mills, Triveni Engineering & Industries, and Shree Renuka Sugars are trading higher in the range of 4-6% on the Bombay Stock Exchange (BSE).

The sector is likely to see a turnaround this financial year, owing to an estimated increase in cash flow, following the export incentive scheme for raw sugar being extended till September 2015, the Business Standard report suggests.

The government has increased the incentives for the promotion and marketing of raw sugar in the international market to Rs 3,300/metric tonne (MT) for the months of June and July.

This may help sugar industry fetch better prices with improved marketing and promotion.

Meanwhile, the aggregate net profit of 54 sugar companies more than doubled to Rs 262 crore for the quarter ended March 2014, against Rs 129 crore in the corresponding to quarter of previous year.