Re: Sugar Sector
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EID PARRY
The horizon is for twelve months and on a shorter term, the next three months are expected to be extremely robust. The biggest positive for the company is its location - South India, including 2 in Karnataka, being the state enjoying the highest sugar recovery in India of about 12%. Other sugar mills are located in Tamil Nadu, Andhra Pradesh and Pondicherry. All the mills are seeing a recovery of more than 11%. That will be a big boost for the company this season. Across the country, a 30% rise in sugar production is expected but Karnataka probably will be having a higher production because of which the company should be able to post maybe about 50% higher production than what they had produced last year. The value of its 62.76% stake in Coromandel International has not been factored into the share price and given the growth expected in the sugar and fertilizer sector, EID Parry promises overall growth. With a face value of Re.1/share, it is a good buy at current levels and it has potential to move to Rs.330 in next couple of months.
Regards
Arun