As dmand supply gap will continue next year also sugar prices
will rise to compensate higher raw material prices
Dhampur promoter stake reduce by a huge 5.19% to 50.59 from 55.78 a quarter back.
Amit
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Dear all,
Please note Invesco Mutual Fund has added Dhampur Sugar Shares 2,02,634. So Promoters could have sold their some of the stake to Invesco Mutual Fund. Disclosure : Holding at avg price of 110
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Over 30 lakh shares have been sold by the promoter in last quarter. Does promoter find the stock fully valued?
Amit
There was a QIP last quarter. Promoter holding is the same. Equity dilution has happened.
Disc: no holding
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Is there any idea when can We expect the results for all the sugar shares?
First or Second week of Aug.
Tommorow 1st result parry…sugar
Then 26th ponnni…2nd august ugar…9th aug…rana…5th august dhampur…12th aug balrampur…
Means 1st result is tommorow…then every 2.3 days there will be a sugar result
Im invested in ugar…dhampur…
I have invested in dhampur, dalmia, triveni, and balrampur. Super bullish in balram because kind of stock they have and I think they are going to announce record breaking result this quarter and also a dividend of 200% (as per SP Tulsyan ).
Can anyone guide me for dalmia and triveni?
1st result out, good margin expansion
Parrys Sugar Q1: EBITDA At Rs 6.8 Cr Vs EBITDA Loss Of Rs 27.3 Cr (YoY)
Parrys Sugar Q1: Total Income Down 10.5% At Rs 65.7 Cr Vs Rs 73.4 Cr (YoY)
Dear All,
i am new to this blog and this is my first post ever on any blog ,
myself manish from mumbai , i am a small retail investor, investing and trading last 5 years…
Sir @hitesh2710 I came across this Blog recently and curse my luck why i did not came across this blog much earlier… the depth of knowledge and insights and foresightedness is amazing and i am stunned…
how you guys predicted this Sugar surge much in advance … kudos to @Donald @Mehnazfatima @nirajiitkgp @DEEPAKSINGH … and others read this full page and was brilliantly informative & great learning for me … which forced me to write this 1st ever blog reply of mine !! 
i have recently invested into Balrampur, Dhampur, Ugar, Renuka… after i invested all came down or consolidating … So my worry is have i entered at the Top or we have lot of juice still left !
as what i have read in different blog and newspaper its gonna be even more sweeter time for sugar sector till october 2017 atleast … would like to know the views of this Esteemed Bloggers which would be of great help to All … special update by @Mehnazfatima with charts will be a delight
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Manish sugar is highly cyclical and heavily regulated sector. Price increase in sugar stocks since about last one year has happened because of anticipated fall in sugar supply due to poor monsoon last year in india and also other sugar producing countries like Thailand and Australia etc. Luckly i have spotted sugar stocks last year around July, Aug and almost all sugar stocks except may be Balrampur and Shree renuka are completely illiquid with very thin trading happening during those time with no hope of revival and pessimism about the sector at it peak consequently most sugar stocks are priced for bankrupty now since last 1 year they moved to fair value range and any likely gain from this level is mostly speculative gain and not based on fundamentals. Near term risk may be steep hike in SAP announcement by UP govt for sugarcane in election year though it looks probable that unless election in UP is over by April May 2017 central govt is not likely to allow sugar import in the country which likely to sustain sugar prices till that time at around Rs 35- 40 per kg range. However if govt decide to allow for sugar import than it may be bad news for sugar companies. Prices can move higher if sugar production for next year likely to fall to about 20 Million Tonne which is possible but not likely. I guess next year sugar production of around 23 - 24 million tonne level is already priced in sugar stocks still individual sugar stocks if they post better than expected numbers in next few quarters prices can increase from here but for posting poor number stocks can also be punished from this level. During last major bull rally for sugar stocks between 2003 - 06, because of two consecutive drought shortfall in sugar production are more than 30% for almost 2 years while this time around shortfall is likely to be around 10-15% only. Based on previous price behavior of sugar stocks sugar stocks likely to peak between Feb to May 2017 unless some major external event like brexit etc affect the overall market sentiments and one important signal for peak is when Dhampur stock bypass Balrampur stock price and Balrampur MCAP bypass EID Parry MCAP. (this has happened during atleast last two sugar bull market and this time atleast these events has not happened yet)
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Good writeup…!!yes now the play is remaining in cos with high inventory. And low debt…they can rally for next 4-6 months…!!or the co’s showing good results …!!price are gonna stay at 38-40 levels till new crushing starts after diwali…after that theycan be in range of 35-40/- till april may…after that it will all depend on whats the total global production and invetories left worldwide…
Intersting point made by you at the end…i would love to see both the things happening together…1st balrampur passing mcap of eid parry then dhampur ovetaking the balrampur stock price:)…as i am heavily invested in dhampur…
Would to like to share your view on dhampur targets will be highly appreciated by all here invested in dhampur.
THANKS n Regards.
One point i missed while replying was sugar production in india…if u see all govt. estimates like ISMA forecasted approc 23.5mt… for 2017 considering mahastra productin @6.5mt…but you might have read the report form maharstra govt. Itself …there they as saying their produn will be around 4mt …thats knock off directly 2.5mt from ISMA estimates…also shree renuka director told in am interview that sugar will not be more than 23mt…i belive that the estimates will soon be lowered slowly-2 by ISMA …SP tulsian also said that he was shocked when calculating sugar production for 2017 and it was coming below 20mt…
Your views on my 2 above messages??
Regards
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As on Friday closing the following sugar stocks are showing signs of turnaround …most probably these stocks may rally from next week onwards:
Dharani Sugar
Kesar Enterprises
Rana Sugars and
Triveni Engineering.
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Deepak based on my reading of various reports about likely sugar production for next sugar year oct 2016 - sept 2017 varies from 18 million Tonne in worst case scenarios to 24 million tonne in best case scenarios. My reasoning for the same based on assumption that UP and TN shall remain at this year level of sugar production or slightly increase while Maharashtra and Karnataka likely to see shortfalls but my guess is due to improvements in sugarcane variety, acreage and innovative agricultural practices fall may not likely to be as severe as during last two droughts (for example this year UP sugar recovery rate has increased by more than 1% (from earlier around 9.5% on avg to around 10.5% on avg) otherwise shortfall in sugar productions should have more. Also this year monsoon is good which likely to set up expectation of lower sugar prices in future and govt efforts to promote ethanol as energy source in future can be game changer and also recent concern due to water scarcity in Maharastra which partly blamed on sugarcane production is likely to discourage sugarcane production through govt policy initiatives (for example govt has not increased FRP for suagrcane this year while significant increase in MSP for pulses etc which in turn can make some other crops production attractive for farmers and their reliance on sugarcane for better income can be reduced). Also if one analyse past production data carefully than due to poor monsoon during the year whatever is production of sugar next year production is around 10% less (that is basis for ISMA and GOI current estimates of around 23- 23.5 million tonne production however my take is actual production of sugar may be around 21 - 22 million tonne as both ISMA and GOI has some bias for projecting higher production so that need for import of sugar can be delayed till march, 2017 by that time clear figures are available to everybody). Based on past experience severe shortfalls is not likely to be beneficial for sugar mills as govt allow import of sugar which is easily available in international market unlike pulses , onions etc whose supply in international trade is very limited and based on my study of some reports fair value for sugar in international market is around 17-18 cent/lb only as more than that price increase Brazilian mill to produce more sugar and less ethanol which is what currently happening. Also currently india has sugar producing capacity of around 30 million tonne only and no new investment in sugar mills to increase sugar capacities is expected while some capex for ethanol is definetly likely to happen and usually sugar mills can operate at maximum capacity of 85-90% only so unless their is substantial improvements in sugarcane recovery rate maximum sugar produced can be around 28-29 million Tonne only while demand is already around 26 million tonne and unless more sugar mills come on stream sugar prices in medium term is also likely to be supported at current level only. Also inflation is likely to bottomed out in India and currently seeing upwards trajectory due to various reasons like implementation of 7th pay commission, increase in oil prices in international market etc which likely to increase in near term while govt always try to control through controlling prices of easy commodities like sugar probably because these commodities affect voter decision during election more than other price increases which is indirect in nature and general people experience after a lag only. In last sugar bull phase during year 2008-10, it was disrupted due to global economic depression during 2008-09 and more than expected increase in sugarcane prices (FRP) by GOI due to election year and allowing for sugar import to control rise in consumer sugar prices again mainly due to elections. So sugar companies are not allowed to benefit through when international sugar prices peaked for more than 30 cent/lb while always paying higher sugarcane prices than based on economic factor and depressed consumer sugar prices due to import of sugar from international market and all these factors are closely linked (for example when India allow sugar import freely usually international sugar prices move up significantly but this does not benefit indian sugar companies as export is banned during those period)
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There is enough juice still left in the sugar stocks. From here onwards, it will be more of a stock specific story rather than an across the sector story. Triveni,with 1500 Crs market cap, has highest inventory (91% of the current season) , has an exciting engineering division with both water business and gears business expected to do well going forward. It also has 21.8% stake in Triveni Turbine worth 850 Crs. The demerger of sugar and Engineering division will unlock value for the shareholders. Good bet at current levels. Balrampur, the leader also looks highly leveraged to the sugar up-cycle and should report 650+ Crs of profit in FY17. Would be wary of small cap sugar stocks as they have already multiplied 3x4 times and the risk reward seems unfavourable.
Discl: 30% portfolio Invested in sugar
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Yes but there are many catches still left…
- as i said and u also agreed that production will be lower than ISMA forecast for 2017…also i agree that too much shortfall is not good…
- you said about import angle…one query i have suppose international prices are at 42/- per kg in indian curreny terms…and our domestic prices are 40/- per kg…then why any one will export to india at price below 42/- …domestic prices should also rise in sync to make export lucrative to external countries…
Having all said i still belive still 4- 6 good months are left for sugar stocks…
Regards
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Your point 2 is correct but this is the case if it is transaction between two private trading partners based on supply demand situation. Govt can import through its one budget at any price not correlated with indian sugar price and till quantity which can suppress sugar prices to much lower level in indian market. Actually govt officers prefer to import at higher prices only so that they can have opportunity to increase budget of their department and opportunity to earn higher commission on the transaction either directly or through their preferred business partner. Otherwise why there is need a tall for govt to focus on fixing prices of sugar, coal etc temporary and not spend its energy on more pressing law and order issues and providing basic infrastructure to its citizens.
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This sector is a mere commodity play.
Last sugar boom seems to be 2006 as per indian companies , not sure why the sugar companies didn’t do good in 2011. http://www.tradingeconomics.com/commodity/sugar
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