Sugar stock climbs to 52-week high after giving 115% YTD return. Do you own?
2 min read 10 Oct 2022, 11:43 AM ISTRenuka Sugar share price is rising as the market is expecting better Q2FY23 numbers in the wake of improved sugar exports leading to an additional margin improvement, believe experts
PremiumDespite heavy sell-off in early morning deals, Renuka Sugar shares have hit 52-week high of ₹65.15 per share on NSE. Renuka Sugar share price today opened upside and went on to climb to a new 52-week high though sentiments on Dalal Street is bearish.
According to stock market experts, Sugar stocks are in uptrend, especially those who have exposure in export market. They said that India has registered robust 57 per cent rise in sugar exports during October to September business cycle. As Indian National Rupee (INR) is under stress these days, market is expecting some extra improvement in sugar companies margins when they would come up with their quarterly numbers for July to September 2022.
Speaking on the reason for rise in Renuka Sugar share price, Ravi Singhal, CEO at GCL Securities said, "Shree Renuka Sugar shares and other export oriented sugar companies are in uptrend these days due to record sugar export by these companies. As Indian rupee has remained weak for some times, these sugar exporter companies are expected to reap benefit of rupee fall as well. Hence, market is expecting some additional margin improvement in Renuka Sugars Q2FY23 results. That's why the stock is in uptrend."
Expecting Renuka Sugar share price rally to continue, Sumeet Bagadia, Executive Director at Choice Broking said, "Renuka Sugar shares are looking positive on chart pattern. The stock may go up to ₹75 to ₹80 per share levels. Positional investors may buy the stock at current levels and keep on accumulating till the stock is trading above ₹55 apiece levels. However, one must maintain stop loss below ₹55 while taking fresh position in the counter."
During 2021-22 sugar marketing year ending this September, India's sugar export shot up 57 per cent to 109.8 lakh tonnes, which resulted in foreign currency flow in India to the tune of ₹40,000 crore. In 2021-22 sugar market year, the Department of Food and Public Distribution, Government of India (GoI), claimed that India has emerged world's largest sugar producer and consumer and the 2nd largest exporter of sugar in the world.
"During SS 2021-22, sugar mills procured sugarcane worth more than 1.18 lakh crore and released payment of more than 1.12 lakh crore with no financial assistance (subsidy) from Government of India. Thus, cane dues at the end of sugar season are less than ₹6,000 crore indicating that 95 per cent of cane dues have already been cleared. It is also noteworthy that for SS 2020-21, more than 99.9 per cent cane dues are cleared," the ministry claimed.
Renuka Sugar shares are one of the multibagger stocks in 2022 as the stock has surged from around ₹30 to ₹65 apiece levels, delivering around 115 per cent in year-to-date (YTD) time.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
