Shares of sugar companies are on a roll, rallied by up to 20 per cent on the BSE on improved operational performance in March quarter (Q4FY19).
Mawana Sugars and Avadh Sugar & Energy have rallied by up to 20 per cent each on the BSE. Uttam Sugar Mills, Magadh Sugar & Energy, Dalmia Bharat Sugar and Industries, Andhra Sugars, Rajshree Sugars & Chemicals, Dhampur Sugar Mills, Triveni Engineering & Industries and Dwarikesh Sugar Mills were up in the range of 8 to 18 per cent on the BSE. In comparison, the S&P BSE Sensex was up 1.1 per cent at 39,255 points at 12:56 pm.
Thus far, 15 sugar companies have announced their Q4FY19 results, posting a combined net profit of Rs 919 crore, as compared to a net loss of Rs 745 crore reported in a year-ago quarter. The same sample of companies had posted an aggregate profit of Rs 208 crore in December quarter, against loss of Rs 2,130 crore in previous year quarter.
The second half of the FY19 experienced many positive changes in the market dynamics. Increase in MSP to Rs. 31, export quotas, augmented prices of ethanol, increase in ethanol realizations have all played a crucial role towards improving the operational margins of sugar companies.
Avadh Sugar & Energy locked in upper circuit of 20 per cent at Rs 616, also its 52-week high on the BSE. The company posted operating profit of Rs 148 crore in Q4FY19 against operating loss of Rs 10 crore in year-ago quarter.
The company said timely support by the Central Government and State Governments has helped in stabilizing sugar prices and ensuring faster payment of cane prices to the farmers. The management is hopeful that the policy decision of diverting sugar capacity towards ethanol production and encouraging exports of sugar will help to rein-in the huge inventories in the industry today.
Triveni Engineering & Industries too hit 52-week-high of Rs 72.60, up 9 per cent on the BSE. The company posted operating profit of Rs 121 crore against loss of Rs 108 crore. The company's board of directors is scheduled to meet on Monday, June 3 to consider, a share buyback proposal.
“The recent initiatives undertaken by the Indian government is expected to address the problems of the sugar sector. Further, the government has attempted to create right environment to encourage higher ethanol production and blending. Hence, we believe the dynamics of the sector are set to change in a structural manner,” analyst at Edelweiss Broking said in sector update.
These steps will moderate the cyclical nature of the sector and will make it more predictable going forward. Initial sign of structural change is already visible, as over the last few months sugar prices have already shown some upward trend and sugar companies are reporting higher profitability, it added.
COMPANY LATEST PREV CLOSE GAIN(%)
MAWANA SUGARS 57.30 47.75 20.00
AVADH SUGAR 616.25 513.55 20.00
UTTAM SUG.MILLS 139.10 119.95 15.96
KM SUGAR MILLS 9.68 8.47 14.29
DALMIA BHARAT 123.55 111.50 10.81
RAJSHREE SUGARS 25.60 23.15 10.58
MAGADH SUGAR 153.00 139.10 9.99
SIMBHAOLI SUGAR 10.97 10.00 9.70
KCP SUGAR &INDS. 16.05 14.70 9.18
DWARIKESH SUGAR 29.55 27.25 8.44
TRIVEN.ENGG.IND. 71.60 66.65 7.43
DCM SHRIRAM INDS 204.55 190.80 7.21
DHAMPUR SUGAR 224.35 210.50 6.58
BAJAJ HINDUSTHAN 9.27 8.70 6.55
RANA SUGARS 3.30 3.12 5.77
SH.RENUKA SUGAR 10.94 10.35 5.70
KESAR ENTERPRISE 31.40 29.85 5.19
PONNI SUG.ERODE 125.00 119.00 5.04
SIR SHADI LAL 36.75 35.00 5.00
PARVATI SWEETNER 2.89 2.76 4.71
Mawana Sugars and Avadh Sugar & Energy have rallied by up to 20 per cent each on the BSE. Uttam Sugar Mills, Magadh Sugar & Energy, Dalmia Bharat Sugar and Industries, Andhra Sugars, Rajshree Sugars & Chemicals, Dhampur Sugar Mills, Triveni Engineering & Industries and Dwarikesh Sugar Mills were up in the range of 8 to 18 per cent on the BSE. In comparison, the S&P BSE Sensex was up 1.1 per cent at 39,255 points at 12:56 pm.
Thus far, 15 sugar companies have announced their Q4FY19 results, posting a combined net profit of Rs 919 crore, as compared to a net loss of Rs 745 crore reported in a year-ago quarter. The same sample of companies had posted an aggregate profit of Rs 208 crore in December quarter, against loss of Rs 2,130 crore in previous year quarter.
The second half of the FY19 experienced many positive changes in the market dynamics. Increase in MSP to Rs. 31, export quotas, augmented prices of ethanol, increase in ethanol realizations have all played a crucial role towards improving the operational margins of sugar companies.
Avadh Sugar & Energy locked in upper circuit of 20 per cent at Rs 616, also its 52-week high on the BSE. The company posted operating profit of Rs 148 crore in Q4FY19 against operating loss of Rs 10 crore in year-ago quarter.
The company said timely support by the Central Government and State Governments has helped in stabilizing sugar prices and ensuring faster payment of cane prices to the farmers. The management is hopeful that the policy decision of diverting sugar capacity towards ethanol production and encouraging exports of sugar will help to rein-in the huge inventories in the industry today.
Triveni Engineering & Industries too hit 52-week-high of Rs 72.60, up 9 per cent on the BSE. The company posted operating profit of Rs 121 crore against loss of Rs 108 crore. The company's board of directors is scheduled to meet on Monday, June 3 to consider, a share buyback proposal.
“The recent initiatives undertaken by the Indian government is expected to address the problems of the sugar sector. Further, the government has attempted to create right environment to encourage higher ethanol production and blending. Hence, we believe the dynamics of the sector are set to change in a structural manner,” analyst at Edelweiss Broking said in sector update.
These steps will moderate the cyclical nature of the sector and will make it more predictable going forward. Initial sign of structural change is already visible, as over the last few months sugar prices have already shown some upward trend and sugar companies are reporting higher profitability, it added.
COMPANY LATEST PREV CLOSE GAIN(%)
MAWANA SUGARS 57.30 47.75 20.00
AVADH SUGAR 616.25 513.55 20.00
UTTAM SUG.MILLS 139.10 119.95 15.96
KM SUGAR MILLS 9.68 8.47 14.29
DALMIA BHARAT 123.55 111.50 10.81
RAJSHREE SUGARS 25.60 23.15 10.58
MAGADH SUGAR 153.00 139.10 9.99
SIMBHAOLI SUGAR 10.97 10.00 9.70
KCP SUGAR &INDS. 16.05 14.70 9.18
DWARIKESH SUGAR 29.55 27.25 8.44
TRIVEN.ENGG.IND. 71.60 66.65 7.43
DCM SHRIRAM INDS 204.55 190.80 7.21
DHAMPUR SUGAR 224.35 210.50 6.58
BAJAJ HINDUSTHAN 9.27 8.70 6.55
RANA SUGARS 3.30 3.12 5.77
SH.RENUKA SUGAR 10.94 10.35 5.70
KESAR ENTERPRISE 31.40 29.85 5.19
PONNI SUG.ERODE 125.00 119.00 5.04
SIR SHADI LAL 36.75 35.00 5.00
PARVATI SWEETNER 2.89 2.76 4.71
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