SUGAR STOCKS ON A HIGH, BUT EXPERTS SEE LIMITED UPSIDE

Shares of sugar producers soared on Friday, outperforming the broader market, after domestic prices hit a threeyear high on Thursday.

Analysts said a decline in production and steady demand may keep sugar prices stable. But, gains in shares could be limited as valuations appear stretched and prices may not rise in a big way going ahead.

Balrampur Chini Mills BSE 4.54 % rose 4.5% to Rs 107.05, Triveni Engineering BSE 6.63 % gained 6.6% to Rs 55.50, Bajaj HindusthanBSE -0.21 % advanced 2.1% to Rs 17.20, Dhampur SugarBSE 3.15 % gained 3.2% to Rs 118.05 and Sakthi Sugars rose 3.6% to a Rs 40.05 on Friday “Prices have shot up on the domestic front. The kharif sowing season is over but it seems that cane sowing is lower by 6-8%.Next year starting October (sugar season), its availability will be lower. All these factors have given fillip to sugar stocks,” said G Chokkalingam, founder, Equinomics Research & Advisory.

Sugar prices have moved from Rs 20 per kg last year to Rs 50 now mainly on account of the reduced acreage, said the local festive season, thus keeping prices at elevated levels.

Get real time advice from Our Best Advisory -  Capitalstars