Mumbai: India’s biggest sugar mills, Bajaj Hindusthan Ltd (BHL) and Balrampur Chini Mills Ltd, were downgraded to “sell” by Citigroup Inc. on the outlook for the price of the commodity.
BHL, lowered from “buy”, may trade at Rs229 in three months, analysts Princy Singh and Pragati Khadse said in a note to clients on Thursday. Balrampur was downgraded from “hold” with a price target of Rs88.
Raw sugar traded in New York has fallen 11% in the past year as the world’s biggest producers, Brazil and India, lifted output and added to a global glut. World production will outpace demand by 11.1 million tonnes, the International Sugar Organization had said on 6 December.
“Given that we expect sugar prices to remain subdued for at least one more year, the risk-reward seems unfavourable,” the analysts said. BHL shares fell 5.4% to Rs269 in Mumbai trading, while Balrampur dropped 4.8% to Rs108.