Indian sugar mills association

Markets on a sugar rush, stocks rise 2-10%

Date:	21 Jul 2017

Source:	The Economic Times

Reporter:	Anandi C

News ID:	21567

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Shares of sugar companies were on a high, rallying between 2 per cent and 10 per cent on Thursday after sugar prices on the National Commodity and Derivatives Exchange (NCDEX) got locked in an upper circuit.

Analysts said optimism over the government's decision to increase import duty on sugar to 50 per cent and a good monsoon have led to the rise in shares of sugar companies. However, many others said investors are better advised to be cautious on sugar stocks at current prices.

Shree Renuka Sugars rose the highest at 10 per cent to Rs 16.52. A total of 41 lakh shares of Shree Renuka Sugars exchanged hands on Thursday compared to a two-week average of 15 lakh shares. Balrampur Chini rose 2 per cent to Rs 157.25 while Dwarikesh Sugar Industries rose 1.5 per cent to close at Rs 437.15.

International sugar prices have fallen while equity prices of domestic sugar companies have shot up over the past few months leading to scepticism among some analysts that the rally may not sustain.

“It would be prudent to be cautious on shares of all sugar companies without exception and start think ing of exit options after booking profits,“ said G Chokkalingam, MD, Equinomics Research & Advisory.He said favourable government policies such as increase in fair and remunerative price notwithstanding stocks of sugar companies could start declining due to the possibility of oversupply.

Markets on a Sugar rush, stocks rise 2-10%

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