Feb 28 2024, 07:54
6 stocks from sugar sector with upside potential of up to 38%:
In a sector, where government policies have a major impact, the risk of any change in policy impacting the players is always present. That is the reason why the valuations of these stocks from such sectors don't cross a certain threshold. Probably the sugar sector tops the lists of such sectors and the reason is because both the central and state governments have some say in the policy making. Recently, there was a tweak in how much sugar cane juice can go for ethanol production and now a rise in fair remunerative price (FRP) which companies have to pouto farmers le different.
Whether it is rice, sugar or wheat, given the hike in global agro commodity prices, there have been policy interventions in the last one year. From banning export of certain quality of rice to lowering import duty on edible oil, the government has tried to ensure that domestic food inflation remains under control. Now in an election year, when there are enough indications of a spike in global sugar price, the steps by the government should not come as a surprise.
Also the recent hike in the FRP
should be taken as a step which was bound to come. The question is whether these minor and expected headwinds, change the broader picture of the sugar industry becoming more a play on ethanol and clean energy or not. Probably no is the answer. The focus in reducing oil import bills is crystal clear and that can only be achieved with ethanol blending. Also, the fact is that whenever there is an indication that sugar inflation might get spiked there would be some measures which might appear to be negative. On the other hand the reality is that the government also understands that only a financially healthy sugar industry will be able to help in achieving this objective. So, in reality we are going to see a balancing act and that will keep happening at regular intervals.
Now coming to stocks, so for some time, these sugar stocks may not see a run up they had seen in the recent past or they may see a volatile movement. The question arises whether the decline in prices should be utilized as an opportunity to buy them with a long term perspective. The answer to this question is more titling towards yes, but the buying can be staggered. The reason over the next two quarters.
Sugar stocks - Upside potential
Feb 27, 2024
Company Name
Dhampur Sugar Mills
Latest Avg Score
10
Reco
Analyst Count
1
Upside Potential%
38.1
Inst Stake %
3.6
Market Cap Type
Small
Market Cap Rs Cr
1,635
Company Name
Dwarikesh Sugar
Latest Avg Score
7
Reco
Buy
Analyst Count
4
Upside Potential %
33.8
Inst Stake %
1.7
Market Cap Type
Small
Market Cap Rs Cr
Company Name
1,507
Balrampur Chini Mills
Latest Avg Score
8
Reco
Buy
Analyst Count
7
Upside Potential%
27.2
Inst Stake %
33.0
Market Cap Type
Mid
Market Cap Rs Cr
7,572
Company Name
Dalmia Bharat Sugar
Latest Avg Score
10
Reco
Buy
Analyst Count
1
Upside Potential %
22.8
Inst Stake %
0.5
Market Cap Type
Small
Market Cap Rs Cr
3,228
Company Name
Triveni Engineering & Ind
Latest Avg Score
8
Reco
Buy
Analyst Count
5
Upside Potential%
14.0
Inst Stake %
10.2
Market Cap Type
Mid
Market Cap Rs Cr
Company Name
7,507
EID-Parry India
Latest Avg Score
9
Reco
Strong Buy
Analyst Count
1
Upside Potential%
11.5
Inst Stake %
13.2
Market Cap Type
Mid
Market Cap Rs Cr
11,176
Calculated from highest price target given by analysts
source: et
Feb 28 2024, 07:59
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