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Showing posts with label Shree Renuka Sugar. Show all posts
Showing posts with label Shree Renuka Sugar. Show all posts
Sunday, July 01, 2012
Sunday, February 19, 2012
Thursday, December 29, 2011
Sunday, November 20, 2011
Wednesday, November 16, 2011
Thursday, March 17, 2011
Sunday, January 09, 2011
Shree Renuka Sugars
Recent flip-flops in sugar policy have battered the prices of sugar stocks, making this a good opportunity for investors to buy the stock of Shree Renuka Sugars, one of the most attractive long-term investments in the sector. At its current market price of Rs 90, the stock trades at a price earnings multiple of just 8.7 times its trailing 12-month earnings and 7 times its estimated earnings for 2010-11. That is at a steep discount to players such as Balrampur Chini and Bajaj Hindusthan (over 10 times). Yet, with its locational advantages, integrated model and bright prospects for its Brazil operations, Renuka Sugars appears best placed among Indian companies to capitalise on the improving outlook for global sugar prices. Having rebounded 40 per cent in three months, global sugar prices look set to hold firm over the next year aided by factors such as tight global supplies, recent flooding in Australia and rising crude oil prices (which prompts cane diversion to ethanol). Renuka Sugars is the leading sugar/ethanol producer in India with a cane crushing capacity of 35,000 tcd across locations in Karnataka and Maharashtra and refining capacity for 6000 tpd, with a 930 kilolitre/day distillery. Its advantages arise from presence in the southern and western regions, where cane prices tend to be more flexible than in the northern States with limited State Government intervention. Renuka's differentiated model of operating integrated sugar plants with refining capacity enables it to extend production and gain immunity from the ups and downs of the sugar cycle. The company has scaled up its revenues nearly eightfold (from Rs 950 crore to Rs 7,669 crore) with profits keeping pace (Rs 83 crore to Rs 692 crore) over just the past three years; testimony to the success of this model, as also its ability to execute on expansion and inorganic growth. Renuka's acquisition in 2009-10 of two large Brazilian sugar mills – Vale Do Ivai and Equipav – have added a larger Brazilian leg (45,000 tcd) to its Indian operations. While policy curbs on cane cultivation and pricing as well as sugar exports/imports limit profitable opportunities for Indian sugar mills, Brazilian producers have access to vast tracts of cultivated cane area, flexible mills that switch between sugar and ethanol and the freedom to capitalise on global sugar shortfalls through exports. This is why Renuka's acquired Brazilian operations enjoy a 30 per cent operating profit margin, well over twice the level managed by its Indian mills. The high level of debt on the Brazilian subsidiaries' balance sheets were a concern during the acquisition. However, the sharp improvement in the global sugar and ethanol outlook suggest that their cash flows could expand enough to enable a quick pay-down of that debt. In India, the frequent policy changes on sugar, with the export curbs and recent Customs duty impost, do pose a threat to the profitability of the company's operations this year. Given inflation concerns, export curbs may remain a worry even as the import duty on sugar could well be reviewed. However, lower cane prices and better realisations would at least partly offset these risks from an earnings perspective.
Wednesday, December 22, 2010
Tuesday, November 16, 2010
Wednesday, September 29, 2010
Saturday, August 14, 2010
Thursday, June 24, 2010
Friday, April 30, 2010
Thursday, August 27, 2009
Monday, March 23, 2009
Thursday, March 05, 2009
Shree Renuka Sugars
We recommend a buy on Shree Renuka Sugars stock from a short-term trading perspective. It is clearly visible from the charts of Shree Renuka Sugars that it has been on an intermediate-term uptrend from its 52-week low of Rs 41, recorded in late October. From this low, the stock has been forming higher peaks and higher toughs. In December, the stock conclusively breached its 21- and 50-day moving averages. Recently, the stock found support at Rs 77. On March 4, the stock resumed its intermediate-term uptrend by gaining 6 per cent with high volume. Daily and weekly relative strength indexes are rising in the neutral region towards the bullish zone. Considering that the intermediate-term up trendline is still in place; we are bullish on the stock from a short-term perspective. We anticipate the stock’s up move to continue until it hits our price target of Rs 92 in the upcoming trading sessions. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 78.
Sunday, February 08, 2009
Monday, December 15, 2008
Shree Renuka Sugars
We recommend a buy in Shree Renuka Sugars from a short-term perspective. It is apparent from the charts of Shree Renuka Sugars that after encountering resistance at around Rs 140 in early August, it experienced selling pressure and declined sharply to record a 52-week low of Rs 41 during late October. The stock, however, reversed direction triggered by positive divergence in the daily relative strength index (RSI). Since its 52-week low, the stock has been on a medium-term up trend. Recently Shree Renuka breached its 21-day moving average. Moreover, the stock’s 8 per cent gain on December 12 reinforced its bullish momentum. We note that there is an increase in volume over the past three trading sessions. The daily RSI is on the brink of entering the bullish zone from the neutral region and the weekly RSI is likely to enter the neutral region. We are bullish on the stock from a short-term horizon. We expect the stock to move up until it hits our price target of Rs 69 in the approaching trading sessions. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 58.50.
Wednesday, November 19, 2008
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