Calendar year 2016 brought happy moments for investors of sugar stocks, which surged up to 360 per cent. Rising prices of the sweetener in the domestic as well as international markets supported the sector throughout the year. Market experts see value in selected sugar companies and believe they can surge up to 50 per cent in 2017.
On a year-to-date basis, Andhra Sugar and KCP Sugar advanced 48 per cent and 5 per cent, respectively. Sanjiv Bhasin, EVP-Markets, IIFL, said: "Soft commodities are doing well. Sugar stocks will continue to give good returns to investors in 2017 as well. However, demonetisation of high-value currency notes may impact their performance in the near term. We are expecting nearly 25 per cent return from DCM Shriram, EID Parry and Balrampur Chini in the next one year."
On a year-to date basis, shares of DCM Shriram, EID Parry and Balrampur Chini have advanced 141 per cent, 30 per cent and 70 per cent, respectively. Overall, it was a turnaround year for most of the sugar companies in terms of profit growth. For the half year ended September 30, 2016, companies like Shree Renuka Sugar, EID Parry, Dhampur Sugar, Balrampur Chini, Oudh Sugar Mills and Bannari Amman reported net profit of Rs 5.70 crore, Rs 141.28 crore, Rs 72.95 crore, Rs 216.70 crore, Rs 37.83 crore and Rs 67.40 crore, respectively, against net losses of Rs 301.40 crore, Rs 172.40 crore, Rs 95.14 crore, Rs 83.95 crore, Rs 81 crore and Rs 59.97 crore in the year-ago period.