Sunday, June 3, 2012


 I have recommended Sugar sector stocks in January and thereafter most  of the recommended scrips gained over 60 % .But now these stocks again corrected sharply in recent times .After my previous posting ,some favorable developments happened in this sector like permission to export sugar under  open general license,depreciation of rupee, slightly improved realisation from local sale,appointment of a committee to study and recommend the possibility of a sugar price decontrol..etc.All together I believe it is again the time to consider stocks from this sector with a long term view and hence repeating my old recommendation

 Old posting below :


I know, many of you  will not  support an idea of buying the shares of companies from sugar sector at this point of time.Yes, there is lot of negatives like lower sugar price,high interest burden,excess government control ...etc.But we can't ignore the fact that all these negatives and more are reflecting in the stock price of each and every sugar company. Most of them are trading at their 5 to 10 year lows and such a situation is surely an opportunity to buy these type cyclical stocks at rock bottom prices for investors with patience.Sugar companies are currently going through rough weather mainly because of lower product price worldwide .But this situation is expected to reverse in one year due to lower production.( Generally it is the nature of many agri commodities) .The expected rise in crude prices going forward may  also influence the sugar price positively  in coming years.Whenever the crude price moves higher and sugar price comes down large manufactorors like Brazil will surely give much preferance for the production of Ethanol over sugar and such a situation will create lower supply situation of sugar in world markets.Moreoevr the current worst situation may lead to the closure of many small sugar mills and the chances of a consolidation in this industry is very much.The most important factor at this point of time regarding the sugar industry in India is the high probability for a reduction in goverment control in  this sector.Chances are very high for some favourable developments in this direction after the upcoming state elections.All together, I feels many sugar companies are value buys at current market price for a genuine investor with long term view.Consider at current market price , Shree Renuka @ Rs.26/- , Rajshree Sugar @ Rs.32/-,Dhampur Sugar@ Rs.31/- and Thiru Arooran @ Rs.70/-

 Stocks like Bajaj Hindustan ,Balrampur Chini and Sakthi sugar ..are also at attractive valuation


  1. Going by the very aggressive open market purchases by the Bajaj Hindustan management, I thought BH could be the best bet among the languishing sugar stocks. I had reached such a conclusion before reading your recent post. For you Shree Renuka, Rajshree, Dhampur and Thiru Arroran are worthier picks. Is it because you are wary of the divergence of BH into coal based power generation? Or is it because, unlike BH, your picks have posted positive quarterly results?

    There is also significant insider buying in your preferred picks. Compared to SR and TA, both RS and DS have moved up from your suggested prices in your earlier post. Many of your followers may know very little about individual sugar stocks. Therefore, would you please enlighten us with your reasons for your preference for these stocks, as prioritized?

    1. Read the last sentence , Bajaj Hindustan not excluded

  2. Hi ValuePick,

    Do you think that schneider electric can improve their margin in near future?

    I feel they are in low margin business hence it seems market is not getting fancy on this stock.

    1. In last concall,company officials mentioned that they are currently executing some orders which accepted few years back at low margin and all recently accepted orders are with high margin.So I believe it will improve going forward.Considering the low spending of Govt ,patience needed in this stock.

  3. HELLO SIR...

    IS IT STILL A BUY....?

  4. Sir
    What is happening with opto circuit. Results were not bad but the stock is severely beaten down.

  5. Please let me have your opinion on NILA INFRA for long term investment. If u r positive on this co., please let me know the best price to accumulate this scrip

    with regards,



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