Balrampur Chini, Bajaj Hindusthan turn bitter: SP Tulsian

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Balrampur Chini, Bajaj Hindusthan turn bitter: SP Tulsian

SP Tulsian, sptulsian.com feels that more weaknesses seen in Balrampur Chini and Bajaj Hindusthan.

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Excerpts from Closing Bell on CNBC-TV18 Watch the full show » ALSO READ See previous views by SP Tulsian See what other Experts & Brokerages are saying about Balrampur Chini See messages about Balrampur Chini

SP Tulsian, sptulsian.com feels that more weaknesses seen in Balrampur Chini and Bajaj Hindusthan .

Tulsian told CNBC-TV18, "Balrampur Chini and Bajaj Hindusthan, deserves very much because if you see the judgment of the Supreme Court definitely that's a dampener that is like to see the cane arrears piling up for this season because when you heard the management for this current season already they have been crying on the higher SAP price announced by the UP government and if you see the subsequent SAP announced by the Tamil Nadu or maybe the price prevailing in Karnataka are much lower, so the impact on the profitability or on the cash flow of all the UP based sugar mills are going to be negative for this season."

He further added, "Last week we have seen a rise of close to about 15-20% happening and the kind of decontrol or the reliefs which we are talking for the sector are expected to happen on two fronts; dismantling of 10% levy and dismantling of the monthly release mechanism but I don't think that both can come before the end of all the elections in the state which are due by 5th March, so by that time I don't think that fresh trigger is seen in these stocks and in fact market was requiring or wanting some trigger to correct and if you see these two majors which are more or less taken as granted that they are likely to come in the moment the model code of conduct comes to an end that will be enjoyed by the mills across India. So there is nothing specific or special relief expected to come to the UP sugar mills which are already reeling under the lower profitability and the strain cash flow system."

"The kind of corrections which we are seeing is deserved, justified and in fact they can correct further the kind of trading positions we have seen built-up in Bajaj Hindusthan, Balrampur Chini and Triveni are going to get liquidated maybe at the end or closer to the expiry and in fact I am seeing more weakness happening in the UP based sugar mill stocks."