Brics PCG Research, in its morning call issued this morning, has recommended a BUY on Mawana Sugar."The company's Q2 results are below expectations," the report said, but "the strong management guidance on future performance reflects an optimistic view. Net sales were up 31% yoY to Rs 120 crore, sweetened by higher realisations. Rising cane costs, coupled with a drop in average recoveries, served to shrink the operating margin by 10% in Q2 to 17.9%."Total cane crushed during the season was 2.7 million tonne, almost flat when compared with last year, with sugar production estimated at 2,43,000 tonne. However, the installed crushing capacity has increased to 21,000 TCD with the recent commissioning of the Nanglamal unit, which is a 3000-TCD rise over last year."The report believes that capacity expansion would bring substantial benefits."
