I know, many of you will not support an idea of buying the shares of companies from sugar sector at this point of time.Yes, there is lot of negatives like lower sugar price,high interest burden,excess government control ...etc.But we can't ignore the fact that all these negatives and more are reflecting in the stock price of each and every sugar company. Most of them are trading at their 5 to 10 year lows and such a situation is surely an opportunity to buy these type cyclical stocks at rock bottom prices for investors with patience.Sugar companies are currently going through rough weather mainly because of lower product price worldwide .But this situation is expected to reverse in one year due to lower production.( Generally it is the nature of many agri commodities) .The expected rise in crude prices going forward may also influence the sugar price positively in coming years.Whenever the crude price moves higher and sugar price comes down large manufactorors like Brazil will surely give much preferance for the production of Ethanol over sugar and such a situation will create lower supply situation of sugar in world markets.Moreoevr the current worst situation may lead to the closure of many small sugar mills and the chances of a consolidation in this industry is very much.The most important factor at this point of time regarding the sugar industry in India is the high probability for a reduction in goverment control in this sector.Chances are very high for some favourable developments in this direction after the upcoming state elections.All together, I feels many sugar companies are value buys at current market price for a genuine investor with long term view.Consider at current market price , Shree Renuka @ Rs.26/- , Rajshree Sugar @ Rs.32/-,Dhampur Sugar@ Rs.31/- and Thiru Arooran @ Rs.70/-
Disclosure : I have vested interest in all these stocks.
Hi Valuepick,
ReplyDeleteExcellent Sir.......U r a true value investor always looking for undervalued sectors/stocks.Thanks for highlighting...the only way of making big money is buying cheap and ignored.
Regards,
Vikas Karunakaran
HI Valuepick,
ReplyDeleteMy query is regarding Selan Oil......with crude almost staying high and expected to touch new highs once the tensions between west and Iran escalates.Why is this stock making lows? with such favorable macro condition.Request you to put some thoughts on this?
Regards,
Vikas Karunakaran
Dear Vikas
ReplyDeleteOne of the promoters of Selan is continuously selling shares in open market .Reason is not known- whether it is because of some personnel or company specific.
Hi Valuepick,
ReplyDeleteI think u should have separate post on Shree Renuka sugar.
Knowing that it has large business(compared to India) in Brazil, is it India cyclic???? Also there is problem of forex loss with Shree Renuka sugars not specific to sugar Cycle. Won't Balrampur is better India Sugar cyclic stock??
Can u please share ur detailed views on Shree Renuka Sugars?I am closely tracking it as it has one of the dynamic management and hence confident that they should be able handle problems.
Regards
Sameer
Hi Valuepick,
ReplyDeleteThanks for the response.
I do agree on that part that promoters have true knowledge of the company better than anybody else....but looking at the selling only one promoter is busy selling that too in small qty.I am assuming that if it is due to personal issue, as other promoters are not active seller.
Some days back as per Sharekhan's report on SELAN OIL, it seems too bullish on this company on its monotisation ( untapped oil reserves) of oil assets.
As i know you are well informed investor,what is your thought looking at the selling pattern by this promoter (Asha Mahajan).
Regards,
Vikas Karunakaran
Dear Sameer
ReplyDeleteI agree with you regarding the problems of Renuka sugar . But I feels it is only because of this extra problems other than lower sugar price Renuka is available at this rate . Don't ignore the price correction while considering the negatives.
Hi Vikas
ReplyDeleteI too feels the current selling can drag the price only for a while and will recover it soon when the sentiment improves. Since the depth of market is very limited now , small selling quantity can drag the price
Hi Valupick,
ReplyDeleteFully agree with u.
Can u share detailed info (though separate Post)on
1)how current forex losses affect business
2)How global sugar/commodity events affect Shree Renuka Sugars(Knowing it has large business in Sugar country Brazil)
3)Ofcourse, How Indian sugar/commodity events affect Shree Renuka Sugars(Knowing it is best managed shareholder friendly Sugar company in India)
I would (am sure lot of ur followers) like to know your detailed with on this gem. So Please provide it.
Regards
Sameer
Hi,
ReplyDeleteWhat is your opinion on EID Parry which is another stock from Sugar sector, however you have not mentioned it. It is also from big group and also in refining raw sugar from Brazil.
Regards
Pandit
Dear Valuepick / Vikas,
ReplyDeleteThank you for fresh insights into SELAN EXPLORATION....
Am holding this stock 200 nos average price 300 Rs.I hope this will be amultibagger in coming years....
Thank you.
Shanid.V H
Dear Sameer
ReplyDeleteCurrent forex loss is a problem to Renuka, but company is trying to reduce debt even through selling a part of its overseas asset.i think the situation will also improve with a better cash flow when sugar cycle turns. Moreover only because of these problems Renuka is available at this rate.
Dear Pandit
ReplyDeleteEID is also a very good company
Bhel B @ 236
ReplyDeleteHDFC bank B @ 425
Should i book profits now?
Thanks !! Already made a profit of 13% in Renuka Sugar since your last post
ReplyDelete- Ashwini
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