The Hindu Business Line : Sugar stocks survive market crash

Oudh Sugar gained 7.98 per cent to Rs 70.35 while Shree Sakthi Sugar went up 2.53 per cent to Rs 103; Balrampur Chini rose 2.05 per cent to Rs 67 and Dhampur Sugar closed higher 2.56 per cent to Rs 76.

Shares of Mawana Sugars and SIEL Ltd, which are in the process of merging, jumped 8.32 per cent to Rs 40.40 and 3.81 per cent to Rs 27.25 respectively. Mawana Sugars board on Monday approved a proposal to reduce the paid-up capital of the merged entity from the earlier Rs 73.95 crore to Rs 24.64 crore.

"Though the market is banking on government concessions given to sugar companies, the Election Commission is yet to clear it. Hopefully, a clear picture will emerge in next two-three days.

Traditionally, sugar consumption improves in the North and Gujarat during peak summer and can push up domestic prices by Rs 50-Rs.60 per quintal," said Mr Vikram Suryavanshi, research head, Karvy Stock Broking Ltd.

Most of the sugar companies are trading well below their 52-week high. In April 2006, Shree Renuka Sugars was quoting at a high of Rs 1,664, Bannari Amman Sugar at Rs 1,723, Thiru Arooran Sugars at Rs 630 and Bajaj Hindustan at Rs 568.

On Monday, shares of Shree Renuka Sugars closed at Rs 472.45, up 0.97 per cent, Bannari Amman Sugars gained 1.89 per cent at Rs 662.65, Thiru Arooran Sugars finished up by 5 per cent at Rs 140.85 and Bajaj Hindustan inched up by 1.36 per cent at Rs 197.60.

Select value picks are also helping sugar stocks to stand out.

"Most of the sugar companies are investing to improve output of byproducts like ethanol, power, etc. Investors can look at sugar stocks for the long term," said an analyst.