Dec 11, 2008, 01.49 PM | Source: CNBC-TV18
Gaurang Shah of Geojit Financial Services is of the view that one should use this rally to exit sugar stocks. The pricing pressure is going to be there, margins are going to get squeezed out going forward.
Shah told CNBC-TV18, "Sugar is a sector where one can use these kinds of rallies to possibly exit. You heard a lot of noise about the SAP (State Advised Price) and petitions going from left to right and right to left. I guess the pricing pressure is going to be there, margins are going to get squeezed out going forward, so my advice would be to sell off any sugar stock as of now. The only stock in the sugar pack that I like is possibly maybe Shree Renuka Sugar or EID Parry but not at these levels. One should wait for correction at lower levels. But I would ignore the smaller pack as far as the sugar industry is concerned."
Disclosure: It is safe to assume that analyst and his clients may have an investment interest in the above stock/sector.