Sugar shares extend rally; Dwarikesh, Dalmia Bharat, Oudh Sugar zoom over 70% in two weeks

Bannari Amman, Dalmia Bharat Sugar, Dwarikesh Sugar, Oudh Sugar and Riga Sugar hit 52-week highs on BSE

Shares of sugar manufacturers continued to trade higher on the bourses in otherwise weak market. 

Bannari Amman Sugars, Dalmia Bharat Sugar and Industries, Dwarikesh Sugar Industries, Oudh Sugar Mills and Riga Sugar Company have touched their respective 52-week highs on the BSE in intra-day trade today. At 11:15 AM, the S&P BSE Sensex was down 0.54% at 24,670.



In past two-weeks, most of the sugar stocks have rallied more than 20% as compared to 7% rise in the benchmark index. Since February 29, the market value of Dawrikesh Sugar Industries, Oudh Sugar Mills, Dalmia Bharat Sugar and Industries and Rajshree Sugars zoomed more than 50% each.



The rally comes on the back of expectations of lower domestic sugar output in SY16 owing to drought conditions in major producing states, together with mandatory exports notified by the Government of India that have led to an uptrend in domestic sugar prices.

"India has exported 29.95 lakh tonnes (LT) of sugar during the first ten months of the current fiscal that is valued at $194 million. It is 56% higher than 19.55 LT exported in the whole of FY2015 fiscal (valued at $103.93 million)," points out G. Chokkalingam, founder & managing director, Equinomics Research & Advisory.

 

"On the other hand, sugar output of India, the world's second-largest producer and biggest consumer, is estimated to decline to 26 MT in 2015-16 marketing year as against 28.3 MT in the previous year due to deficit rains. We firmly believe that a still significant upside is left in the sugar stocks like KCP Sugar and Andhra Sugar," he adds.

ICRA upgrade

Dwarikesh Sugars Industries hit the upper circuit for second straight day on Tuesday, up 10% at Rs 209, also its fresh 52-week high on the BSE. The stock has appreciated more than 100% from Rs 102 on February 29, after the rating agency ICRA upgraded the long-term rating of the Line of Credit (LOC). The outlook on the long term rating has been changed to positive from stable.



“The rating action factors in the improved outlook for the company’s core sugar business arising out of the significant increase in domestic sugar prices coupled with an improvement in the recovery of sugar from sugarcane leading to lower cost of production during SY16,” ICRA said in a statement.

According to Reuters report, Indian mills have scaled back expectations of sugar output due to drought, notably in Maharashtra, a major growing region. CLICK HERE TO READ FULL REPORT.

Name	29/02/2016	14/03/2016	LTP	% chg*	% chg1#
Dwarikesh Sugar	102.10	189.90	208.80	104.51	9.95
Dalmia Bharat Sugar	60.80	96.65	105.10	72.86	8.74
Oudh Sugar Mills	37.30	54.30	63.50	70.24	16.94
Rajshree Sugars	23.00	33.50	36.85	60.22	10.00
Upper Ganges	57.00	75.85	84.50	48.25	11.40
Uttam Sugagr Mills	21.20	27.30	30.20	42.45	10.62
Dhampur Sugar	56.00	74.35	79.15	41.34	6.46
Sakthi Sugars	23.40	30.50	32.50	38.89	6.56
KCP Sugar &Inds.	19.40	24.90	26.00	34.02	4.42
Ponni Sugar Erode	164.10	223.50	216.70	32.05	-3.04
Mawana Sugars	18.00	22.20	23.30	29.44	4.95
Rana Sugars	3.85	4.63	4.85	25.97	4.75
Triveni Engg	39.05	48.05	48.70	24.71	1.35
Shree Renuka	11.65	13.84	14.51	24.55	4.84
DCM Shriram Inds	85.00	99.75	105.00	23.53	5.26
Bannari Amm.Sug.	1055.00	1213.75	1290.00	22.27	6.28
Balrampur Chini	81.00	95.45	97.50	20.37	2.15
Bajaj Hindusthan	14.75	16.73	17.45	18.31	4.30
Ugar Sugar Works	12.61	14.29	14.89	18.08	4.20
EID Parry	168.55	190.20	198.10	17.53	4.15
LTP : Last traded price on BSE in Rs at 11:15
*% change over 29/2/2016
#% change over 14/3/2016