Sugar Sector
(Updated - Dec 2008)
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Returns |
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187% Target acheived in month of 19 May 2009. It went high till Rs.141
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127% Target acheived in month of 20 May 2009. It went high till Rs.84 |
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190% Target acheived in month of 20 May 2009. It went high till Rs.90 |
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250% Target acheived in month
of 19 May 2009. It went high till Rs.141.70 |
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60% Target acheived in month of 06 Mar 2009. It went high till Rs.28 |
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Name of Stock
CMP
Buying Price
Shree Renuka Sugars
49
Below 40
Triveni Engineering & Industries Ltd
37
Below 25
Balrampur Chini Mills Ltd
31
Below 28
Bajaj Hindustan Ltd
40.45
Below 35
Monnet Sugar Ltd
17.50
Below 15
Bannari Amman Sugars Ltd
625.5
Below 400
Reducing sugar cane acreage, growing consumption, Government plans of higher ethanol blending and higher requirement from liquor manufactures are the key factors why should investors think of investing in sugar stocks. But in addition to these positive factors some negative factors are also present in sugar stocks.
So read on following sections to understand those negative factors and consider your own probabilities before investing.
Generally it has been observed/analyzed that sugar stock prices rally for short term and come down because of rise in sugar prices.
So if investors would like to adopt short term rallies then plan according and book profits whenever applicable.
Important key points
1. Sugar sector was one of the biggest wealth generators during 2005-2006 as
a result of increase in sugar prices.
2. In current bearish markets too prices of sugar stocks has risen from 2 to
35% while there is fall in sensex and nifty.
Why the sugar sector will be in great demand in next year?
1. The most important reason is this year Low sugar cane yield.
Sugar cane output may drop 10% this year.
2. Government has made 10% ethanol blending mandatory in petrol
from Oct 2008. Sugar cane molasses is used to produce ethanol
so there will be high demand for sugar molasses.
3. Liquor producers are already facing the heat of increase in price of
sugar molasses due to shortage and this shortage is expected to
increase in next year as the sugar molasses will also be heavily
required to blend in ethanol.
4. Most of the sugar stocks are almost 40 to 50% down from there
high levels.
Returns
Expect 50 to 80% in next 12 to 24 months - varies from company to company based on fundamentals and growth prospects.
(Updated - May 2009)
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