Limited upside in sugar stocks: Baliga

Excerpts from Bazaar on CNBC-TV18 Watch the full show » Nifty BSE | NSE 10/02/12 Are Mutual Funds betting on Nifty?

Limited upside in sugar stocks, says Ambareesh Baliga of Karvy Stock Broking.

Baliga told CNBC-TV18, "Sugar we have been cautious for a while and even at this point of time we feel that the upside seems limited. Clearly although you have the sugar barons expecting sugar prices to shoot up much more from here, we had a contrary feeling that possibly the upside from here for sugar as such may not be too high. In the recent past we have seen that when sugar has moved up 15-20% in prices, the sugar stocks have not reacted accordingly. So at this point of time the risk reward ratio is not really favourable and being cyclical over the next possibly 4-6 months once the sugar prices start softening, it will have a effect on sugar stocks as such. So I think the downside at this point of time is more than upside, so it doesn't make sense buying into them at this point of time."