Best Stock in the Sugar Sector

Which stock would you rate as the best in the sugar sector in India today based on?
1. Current Valuation
2. Corporate Governance

 

I like Dalmia Sugar as it comes from a reputed group. EID Parry is also good. Some board members have also bought Andhra Sugar.

 

Kakatiya Cement Sugar & Industries Limited (KCSIL) earlier known as Kakatiya Cements Limited (KCL) was incorporated in the Year 1979 for the manufacture of Ordinary Portland Cement. The Company was promoted by Shri P.Venkateswarlu, a reputed Civil Contractor with equity support from APIDC. The installed capacity of the Cement Division of the Company was increased over the period from the initial 66,000 tpa to 1,98,000 tpa to 2,97,000 tpa at present, whereas that of the Sugar Division is increased from 2500 tcd to 3200 tcd at present. The cement plant of the Company is located in Nalgonda District of Andhra Pradesh, whereas the sugar and power plants are located in Khammam District.

Maybe, RMSC sir would be able to find out some information about the Sugar division of Kakatia.

 

Thank you both. Any more on the above?

 

Andhra Sugars ... Pretty decent in terms of fundamentals when compared with others

 

This stock has shot up like crazy ... Is it still recommended to buy at this level?

 

I am betting on DCM Shriram.....posted good numbers today. It has Sugar and a compete agri focus too. A good monsoon can make wonder to this stock.

 

abhishek1984abhishek had created a thread with the title :
Kakatiya Cement Sugar and Industries Limited-Sitting pretty on two hottest sectors
https://rakesh-jhunjhunwala.in/foru...retty-on-two-hottest-sectors.2120/#post-16756
Kakatiya Cement (BSE Code : 500234) belongs to Cement and Sugar sectors. Both are in demand.

 

Avoid Maharashtra based companies because of drought. They will not get sugarcane to crush even in 16-17.

 

Right. Tamil Nadu and UP based sugar companies are in demand.

In a interview, SP Tulsiyan said :
The first results as I have been focusing my view on the UP based sugar mill, Dhampur results are due on May 10. Upper Ganges and Avadh Sugar are due on May 13 and Balrampur Chini

Read more at: https://www.moneycontrol.com/news/stocks-views/checkouttulsian-likes-gillette-eicher-motors-up-sugar-cos_6548021.html

I would say that start with Dhampur, take a call on Avadh sugar, as you head towards the results and only, I think these four companies have declared the results date. So, keep a track on maybe the result date of Dalmia Bharat and maybe one or two other UP based sugar mills as well.

Read more at: https://www.moneycontrol.com/news/stocks-views/checkouttulsian-likes-gillette-eicher-motors-up-sugar-cos_6548021.html

 

How is DCM Shriram?

 

DCM Shriram posts Rs 51-crore net profit in Q4 DCM Shriram has swung into black with a net profit of Rs 51 crore in the March quarter, helped by lower cost of production across business segments.

Read more at: https://www.moneycontrol.com/news/results/dcm-shriram-posts-rs-51-crore-net-profitq4_6606761.html

 

So is there no drought in UP and Karnataka - the other major cane growing states?

In fact i recollect reading that the acreage under cane cultivation actually increased in Maharashtra despite drought in there.

And what about the centre's prescribing maximum quantity and period that traders can hold sugar stock ( stock as in sugar and not shares)?

Another point for the sugar enamoured......Globally moneymanagers are long on gold and sugar.

 

Yes, UP has less drought in comparison to Maharashtra. The sugarcane producing belt in UP has very good ground water table i.e. only 10-15 feet. Farmers use diesel pumping set to irrigate. In case of drought their cost of production is increased, but the crop is there, of course with less yield.
In addition to above we have to understand the difference in Agro-Technology of Sugarcane cultivation in UP and Maharashtra. In UP Sugarcane is 7-9 month crop whereas in Maharashtra it is more than 18 month crop. It needs two rainy seasons to mature, In UP it needs only one. In Maharashtra, the crop sown in Jun, July 2015 will be harvested November 16 to April 17 sugar season. 2015 drought has already ruined this crop, even a good monsoon in 2016 will not help. Farmers have sown another crop in place of sugar cane. So this will affect 2016-17 crushing season in Maharashtra. In UP it is totally different. They sow the crop in Feb, March not in rainy season. They do irrigation with pumping set till Jun and thereafter Monsoon takes care of crop. At the start of winter crop is ready to harvest. So this year's good Monsoon will help to increase production in UP. But in Maharashtra, it will help in 2017-18 season.

 

In July 15, Dalmia and Dwarikesh started the boom in Sugar stocks. Soon after Dalmia lagged behind giving the way to UP Companies. In fact, Dalmia is best managed company, also it purchased sugar mills at throw away price during recession. But it will not take benefit what it deserves because of less sugarcane to crush in Maharashtra.
Also while playing cyclicals, we need to see the gainers of price advantage. These are opportunistic bets for one year or 1.5 year not secular growth stories.

 

Thank you for this insightful post. Am not a cane cultivation expert ( knowledge limited to fruits around coastal Maharashtra) but have always carried an impression ,gathered from some of my farmer friends, that Ratoon is the most prevalent cultivation method prevalent in Maharashtra ( about 50% of cane area under it) and this possibly because it offers the shortest duration of 10 Months and fits in perfectly with the annual Oct-Mar cane crushing season.

 

V. Good knowledge about sugar stocks.

 

Ratoon - I am listening it first time. It means that Maharashtra is also catching fast to align their cultivation calender with sugar mills. It is good for future but for 16-17 there are all bad news from Maharashtra only. Maharashtra produced 103 lakh tonne last year, this year 83 and forecast for next year is only 55 lakh tonne. Read it here on ISMA site.
https://www.indiansugar.com/NewsDetails.aspx?nid=5541

 

Ratoon isnt really new to maharashtra. Maybe you hear about it now. A few of us in here have bern tracking sugar from around q4 last year to ride out the expected sugar upswing.

And yes one other item which has a bearing on sugar globally is the ~15% Real appreciation against USD this year thus impacting Brazalian exports. Brazil you may be aware is the largest producer of sugar.