Sugar Cycles: 7-8 years of losses followed by 2-3 years of super gains!

Guys, SP Tulsyan is correctā€¦there was massive distribution in the following sugar stocksā€¦
Balrampur,
Dalmia sugar
Oudh
Triveni
Upper ganges
Rajshri
Rana Sugar
Dhariniā€¦

Surprisingly, I do not find the above type of distribution pattern in Dhampur and Dwarikeshā€¦makes me wonder if these two stocks will lead the sugar rally after the present round of correction and consolidation is done withā€¦

And a more worrying thing is that the NIFTY is showing the same topping out pattern that was exhibited by the above sugar stocksā€¦maybe we are heading towards the much talked about correction which has a first target of around 8200ā€¦

Although the very purpose of technical analysis is to overcome our emotionsā€¦but still in my euphoria I ignored the sooo in the face kind of distribution patternā€¦

We live and we learn and continue to pay a price for acquiring market knowledge:(

So is time to move out?

There are two anomalies in this round of sugar correctionā€¦Bannari and renukaā€¦As of now both these are not even in downtrend and are holding out quite well ā€¦that too with an upside biasā€¦

Umangji: you may consider moving out if you can get in quickly if the correction turns out to be a shallow oneā€¦its you money and your decisionā€¦

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i am expecting the same from dhampur .it has potential to lead the Q2 rally due its EPS growth.its under accumulation it seems.
Yes still some pain/ correction /consolidation expected till september mid or even at sep last if market remains weak.
But now fall intentity is starting to get reduced it seems from last 3-4 days.even market is weak sugar is not leading the weakness which was earlier the case

Sugar Mills post Stellar profit in Apr-June Qtr. News Item in Today BS edition.

http://epaper.business-standard.com/bsepaper/svww_zoomart.php?Artname=20160826aK016101001&ileft=4&itop=48&zoomRatio=130&AN=20160826aK016101001

Thanks! However URL does not open upon click.

Hi Mehnaz,

Do you think Triveni Engg & Dhampur may lead the next stage of rally whenever this correction/consolidation ends ?

Thanks & regards
Sandip

Hiā€¦

Cant say about Triveniā€¦the water gear business is proving to be a dead weightā€¦but if the demerger goes through, then triveni will run very fastā€¦

Sorry. I hope this time it works!

http://epaper.business-standard.com/bsepaper/svww_zoomart.php?Artname=20160826aK016101001&ileft=4&itop=48&zoomRatio=130&AN=20160826aK016101001

One question.
As per present cane prices of 290 rs / quintal, the sugar price off mill needs to be around 35 for the mills to post some profit. I believe those are the ongoing prices now, more or less.
it is highly likely that UP govt will increase cane prices this season in view of the election.
Lets say if it is increased to 330 rs / quintal. in that case sugar prices will need to be 40 rs off mill.

at 24-25 rs sugar prices the mills were bleeding and now we are in up cycle for sugar prices. I am not an expert but generally i believe i believe the commodity prices go much higher in up cycle and as per above posts (many thanks to the research done and posted by the fellow valuepickrs) there is going to be deficit in sugar. So it appears that the sugar prices in all likelihood will cross 40 rs easily.
The pulses prices rose and govt with all its tools could not control the rise and they are still quoting at very high prices. I believe there is a limit till which govt can control, unless they turn to draconian ways like seizing of stocks etc but that would damage the industry in the long term.
Kindly correct me where i am wrong.
Invested in Kesar Enterprises. Had booked some profits at around 45 and then around 65.

Also, UP govt had announced some incentives for sugar mills but as usual the incentives have so far not been credited to the mills. That what appears to me upon reading Kesar results.

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Do you mind sharing the distribution pattern through the charts you talking of. And the lack of those patterns in Dhampur and Dwarikesh. Im assuming you are talking of the distribution pattern in the daily charts. Regards

Yesā€¦its daily charts ā€¦but it will involve too many chartsā€¦too much technical thingā€¦

@Mehnazfatima ji
No Doubt, itā€™ll be hard to project on your partā€¦ but if you give it a shot, itā€™ll still be immensely helpful to newbies like me to learn what a distribution pattern looks likeā€¦

The big daddy of sugar stocks, the favourite of all the analysts and institutions - Balrampur chini is in severe downtrend. Just that fact may sour the climate of sugar stocks for some timeā€¦

Can there be a rally in sugar stocks if the group flagship stock keeps going downā€¦? ā€¦maybe towards sub 100 levelsā€¦

But fundamentals are intact they (stock)have to catch up to fundamental and deficit conditon in india is going to be till 2018 minimum now ā€¦there is no doubt in that after seeing current sowing data for sugarcane and rainfall is getting deficit too.
Now coming to balrampur i prefer DHAMPUR reason being EPS growth in dham is much much higer than balramā€¦

  1. balram suppose do yearly profit of 500 cr it eps will be 20ā€¦suppose market gives pe of 5 than share price comes 100.
    2)whereass dhampur yearly profit will be around 300 crore that gives eps of 48 now with pe price comes to be 227.
    Thats my view considering ONLY eps and pe ratios.
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Can someone assist how and whether there is distribution going on within a stock determined? Additionally from what I gather that Oct is when the sugar rally can resume and Dhampur, Bannariaman, Renuka and Dwarikesh are scrips showing most potential??

How Everyday Signs Can Help Us Navigate the Worldā€™s Turbulent Economy: ā€œWhenever the majority of the population seeks to pursue the same idea at the same time, it usually ends in tearsā€¦"

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This rally was led by Dwarikesh and Dalmia. After the data from Maharashtra in October 15, Dalmia stalled but Dwarikesh continued. Reason was simple - undervaluatiion. Now see the results of Q1, it is clear that Dwarikesh is leader in this rally not Balrampur, Dhampur. In fact Upper Ganges joined this rally after some lagging but now behaving like leader. Q1 results validate this theory. I think, in this cyclical, mortal game exit PE multipple expectations must be minimum like 5 to 7 only, rest is over valuation at the moment. So sugar stocks are at fair value. Second leg of rally will come after sugar price increase or Dec results. Most of the appreciation is already there in this cyclical game i.e. 15-20 times in boom leaders. Every boom has its own leaders so has this. Balrampur looks costly in comparison to others like Dhampur, Dwarikesh, Upper ganges. So it is in time correction.
Shree renuka did not participate in rally because of Maharashtra, Karnataka factor. Only UP mills are leading.

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