Sugar stocks to sweeten in 2023; Dwarikesh, Renuka can rally up to 37%

The stellar performance of sugar stocks began in 2021, and is likely to continue in the new year - 2023, indicates the technical charts.

Shares of sugar companies shares were seen trading with a positive bias on Tuesday even as the benchmark indices exhibited a cautious movement in trades so far. The BSE Sensex and Nifty 50, were seen holding marginal gains in late morning deals after the initial volatility.

Among individual stocks, shares of KCP Sugar and Industries have skyrocketed 12 per cent. Uttam Sugar Mills, Mawana Sugars and Shree Renuka Sugars have soared over 6 per cent each. 

Off late, sugar stocks were in demand on hopes of rise in export quota in January. So far the Indian government has allowed export of up to 6 million tonnes (MT) of sugar for FY23. Earlier in FY22, India had exported a record 11.1 MT sugar.

Meanwhile, with regards to the share price performance, majority of the sugar stocks carried forward their stellar performance from 2021 into 2022, with shares of Ugar Sugar Works zooming three-fold in 2022, following a 80 per cent rally in the year before.

Shree Renuka Sugars soared 90 per cent on a year-to-date basis, after the stock had almost doubled in 2021. Likewise, after posting double-digit gains in 2021, Sakthi Sugars, Dwarikesh Sugar Industries and Uttam Sugar Mills soared over 50 per cent each in 2022.

So far, two fabulous years, will 2023 be yet another year of bumper gains for sugar stocks? 

Here’s a technical outlook on select sugar shares:-
 

Dwarikesh Sugar Industries Limited (DWARKESH)

Likely target: Rs 130 and Rs 140

Upside potential: 28% to 37%

Shares of Dwarikesh Sugar Industries seem to be cautiously taking support at Rs 90-mark since July this year. Every time, the stock fell close to this mark, the reversals have been robust, with stock exhibiting resilience. On the upside, a resolute close above the Rs 100 hurdle would instigate fresh upside for the stock towards Rs 130 and Rs 140 levels. The present trend signals a positive bias, with the stock reflecting sustainability over the selling pressure.  CLICK HERE FOR THE CHART

Shree Renuka Sugars Limited (RENUKA)

Likely target: Rs 65 and Rs 70

Upside potential: 13% to 21%

While the current chart texture denotes trendline breakdown at Rs 58, the bigger trend remains bullish as long as the stock honours the cushion set at the 200- day moving average (DMA) set at Rs 51, as per the daily chart. The sharp reversal post witnessing massive sell-off in the last week, indicates robust underlying trend, which when sustains over Rs 58 could trigger a rally towards Rs 65 and Rs 70 marks. CLICK HERE FOR THE CHART

Ugar Sugar Works Limited (UGARSUGAR)

Likely target: Rs 110 and Rs 120

Upside potential: 13% to 23%

The stock is rising upward, with support of the 50-DMA, presently, set at Rs 84.50 level. And unless this cushion mark is breached, with a decisive breakdown supported by aggressive volumes, the positive bias would not have any major impact. Only simultaneous closes beneath this support could put dent the bullish bias. The trend seems headed to Rs 110 and Rs 120 levels. CLICK HERE FOR THE CHART

Uttam Sugar Mills Limited (UTTAMSUGAR)

Likely target: Rs 310

Upside potential: 10%

The recent sell-off in the last week forced the counter test the support at the lower level of “Inverse Head and Shoulder” pattern, emerged in October this year. The stock bounced quickly right after falling near the Rs 236 mark. The reversal indicates the continuation of the breakout of the said pattern and the stock could reach its recent high of Rs 310. The medium-term outlook remains bullish as long as the lower support of Rs 236 is defended. CLICK HERE FOR THE CHART

Mawana Sugars Ltd (MAWANASUG)

Likely target: Rs 120

Upside potential: 25%

The stock has recently scaled significant hurdles of Rs 97 and Rs 92, suggesting a positive upside in coming sessions. The last week decline, which held the support of Rs 83 mark continue to hold the upside bias high. Today’s up move now has resumed the upward trend, with stock potentially aiming Rs 120 level. The stock may even scale further highs if it sustain over the 200-DMA placed at Rs 106. CLICK HERE FOR THE CHART