Looks like a lot of over-optimism was priced in. Now, that steam was let out. I believe Balrampur will also post similar set of numbers, but the fall there will be muted IMHO because it is, afterall, much quiet (comparably) since the last few weeks. In spite of muted quarterly results, as compared to the overhype of market punters, I still think that Both Balrampur and Dhampur would give good price appreciation in 1-2 yrs time.
DISC: Invested in both.
I believe Sugar stock cycle is nearing its end, i sold off 66% of my holding in Dhampur at 134 yesterday and at 133 today, holding small tracking quantity.
Amit
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Balrampur is fully priced in, should fall more
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For those predicted end of sugar cycle, please look at last quarter result … Most of sugar stocks did 15% correction after Q4 … after that we know what happened …
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Too premature to say that. Simply because you sold off that dosnt meant that the cycle would end (vice versa also true).
- Poor monsoon last year would have impact in this year production
- Usually cycles dont end in a year they stretch some time
- Almost all the production estimate a shortfall
- Cycle will be at risk sometime late this year post festive season as its raining very well in Maharashtra so production is likely to recover next week.
Mahi: I don’t have much to say about Upper Ganges and Dwarikesh…except that if you have purchased at higher price, then you may get one more chance to exit at higher levels…otherwise for the next 1-2 months the stocks may gradually come down to much lower levels…If you are already in good profits, then it might be prudent to book profits in these stocks and shift to Balrampur / Dhampur…its your call.
Both Upper Ganges and Dwarikesh are in bubble zone and there may be some sort of pump and dup thing going on there.
Dear All… results are good i believe, positives were factored in and short term traders invested for better results ,but bit dissapointed so now booking quick profits … Just expressing myself i may be wrong ,
The point to see in all the results is , Mills are holding on to their stocks and keeping the inventory for future, Mills are seeing profits after 5 years and the realization they would have got in this quarter would be good, since the prices last 3-4 months are quite steady 3500-3600 thereabouts… still they did not book profits holding on to inventories … ???
Surely This mills running from Years now have better understanding of ground realities and confident of even higher realizations… Earlier we thought UGAR did a grave mistake but now All holding to Inventories is really a sign of good quarters going ahead … !! Firstly government indirectly took steps which gave a hint there is shortage ahead , and now Mills not selling at this good price and holding for higher realizations just Confirms there is huge Supply-Demand gap … Cause they know when the uptrend cycle starts it does not Die so soon … IMHO !!
ICE US Sugar #11 Oct back to 20.05 as I write 
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huge inventory has been carried over by DHAMPUR…!!would reflect in mega results in Q2 and Q3…!one should hold minimum till jan end
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Can somebody throw some light on proposed De-merger of Oudh and Upper Ganges sugar. I think for every 10 Oudh sugar one will get 2.22 Avadh Sugar. One who are holding Upper Ganges will get shares of Magadh Sugar.
Heard that Avadh has a tiny equity of 1 Cr (10 Paid Up) only and having potential earning capability of 200-230 Cr in 2016-2017. If this is true EPS would be 200-230 and Price may rise to 1600-1700 minimum after it get listed around 800-1000 levels (my guess). However, I have not gone in details neither I found much about Avadh sugar in details anywhere.
Requesting here, if someone has any idea please share the same.
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Another important consideration is that Dhampur paid 14.67 cr in deferred tax in Q1. Once one does the math on that and also see how much of inventory they are holding (80% plus), the rest is easy to fathom
The earnings of Dhampur from power (around 160 crores) and from ethanol (around 60 crores) would be enough to take care of the depreciation and interest payments. The earnings from sugar in Q4 will take care of income tax payment.
Thus whatever Dhampur earns from sugar in the first 3 quarters will be its profit after tax…on an inventory of 33 crore kgs valued at 27 rupees per kg…if Dhampur gets an average price of 35 rupees…i.e a profit of around 8 rupees…then the total profit stands at around 230-250 crores at the end of FY 17…since market is an advance discounting mechanism, I think the stock will be trading around 300 rupees by end of Dec 2016…
But as of now, the stock may move sideways for a month or two…till it again wakes up in anticipation of good Q2 results
Discl: I had a good enough exposure to Dhampur @90…then increased it a bit more @ 107…and some more @ 119…I may add a bit more when Dhampur shows signs of coming out of the present consolidation.
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In case of Balrampur, since the debt is very less and depreciation too is quite low…it would earn a profit of around 100 crores from cogen power and ethanol sale…after accounting for interest and depreciation.
An if it earns around 8 rupees from sale of sugar in the first 3 quarters…then the profit after tax for Balrampur for sale of 57 crore kgs of sugar would be 450 crores and total profit for fy 2017 would be around 550-600 crores…for the fy 2017
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AVADH should list around 1500-2000
Even Magadh has 1cr equity and Palash securities will have 10% of Magadh shares.
Both upper ganges and oudh are extremely good to buy even at cmp.
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Important thing to note for sugar stocks is that Q2 will not be that great as inventory liquidation spreads till november… So for time being there is no major trigger till next 3-4 months
dont worry Q2 will be bumper …!!Q1 they sold very less…to reap huge gains in Q2 & Q3…!!dhampur Q2 profit will be 80crores plus…and ugars will be 30 crore plus…!!!
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Any estimates for Rana Sugars profits in the coming quarters ? They had 645 cr of inventory on 31st mar 16.
Sorry Deepak, but I do expect a bit more here. My reasons for this are :
Q1 last year
generated a profit of 11 cr only counting the power and distillery segment.
- interest cost of 2 cr = 9 cr not counting the sugar division.
Q1 Last year sugar division was a loss of 8.9 cr, this year I agree the company will try to hold on to inventory for higher realisations in upcoming quarters. Nevertheless, I would expect Q1 to deliver 10-15 crs.
I am still a novice investor, So I look forward to learning any mistakes/assumptions I have made.
Thats y i written 5 plus …but by seeing other results u will know…that 10cr will be dfficult…they will carry huge forward inventory and bumper results expected in next 3 qaurters that will take rana eps to 8 plus by quarter 3 results …and even if we give pe of 5 share price comea to 40plus…so hold on patience ia needed
…donnot expect much from q1 hold for Q3.
Regarda
My father in law works with Triveni Sugar and I had a discussion about sugar industry outlook. He for see no further price increase going ahead, in fact he for see a fall in prices post diwali as a very good monsoon in UP is leading to a good harvest of sugarcane. Regarding cane prices he sees no major price rise.
Plz. exercise your own judgement.