Buy sugar stocks on declines, says Dipan Mehta, Member of BSE & NSE.
Mehta told CNBC-TV18, "Despite what is happening in the north Uttar Pradesh as well as the kind of problems, which the government is facing - there is no denying the fact that the fundamentals of the sugar industry has improved, prices are on the high side, margins are looking up and in the lean period most of the sugar companies have diversified their revenues, setup power plant, so there is some amount of stability in the earnings as well."
He further added, "At the same time valuations are not out of whack and maybe over the next 12-24 months you could have surprise performance coming in from these companies. So I would be a buyer at decline within the sector and my sense is that if oil prices remain at the levels, which they are and the ethanol blending programme picks up in true earnest then these could be quite positive for the industry and you could see investor interest again increasing even from these levels. So my general view is positive on sugar industry. We have investments and recommendations in several stocks in the sugar industry."
