Shree Renuka Sugar Turn around story

Warren Buffet is against cyclical stock for simple reason that average cash flow over a period of time is not so fantastic because of negative return during down turn of cycle. At the same time many renowned players have advocated for cyclical sector because they offer us safe entry during down turn.

I invite all estimated valuePicker colleagues to join me and embark on this wonderful journey of big bull run in Shree Renuka which has just commenced.

Shree Renuka is right now resting on three strong pillars which form strong foundation which creats case for superior returns in medium to long term as under:

(1). Cyclicals: Timing is everything in cyclical sector. If we pick the stock at down turn of cycle and exit at up turn, it offers multi fold returns.

(2). Turn around: When company is turning the corner, it is available at throw away price due to debt laden position of company. History is full of such companies which passes through rough whether and come out with flying colours. With kind of dynamism Mr. Murukumbi has shown in establishing Shree Renuka, it is ripe for big turn around at this stage.

(3). Asset plays: Because of huge assets owned by company stock available at discounted price is as good as by asset at discounted rates when sector is in recession. Sugar sector is offering best opportunity because of consecutive 5 years of surplus in international sugar market.

Above three are criteria out of six categories identified by non other than Peter Lynch. The veteran who has coined the term Multi bagger.

Technical terms Sugar cycle has taken U turn at international level and new new bull run has started with bottom in place. Shree Renuka is only international sugar company from India who has managed to escape controls of states and Indian government to some extent. With rich experience of Wilmar group in trading of agro items lot of synergy has come in to existence.

While management is writing turn around story of Shree renuka, I am pleased to invite you all to share your valuable experience.

Sugarbull.