See 20% returns in Shree Renuka, Balrampur Chini, Bannariamman Sugars and EID Parry, says SP Tulsian, sptulsian.com.
Tulsian told CNBC-TV18, "I am bit worried because the kind of run up which we have seen in the sugar prices ex-mill it is getting sold at Rs 36 and probably that may see some government action getting initiated like export ban and kind of things. But even if you take a fundamental call, I think the situation is going to remain quite strong because in the interim period upto September, companies will all be making huge money on their inventory, which they are carrying in their books when the season has ended in the month of March and since then the realizations have risen by about Rs 10-12 per kg. So in the six months, you will be having the profits on the inventory and going ahead when the season will start again it is probably estimated that production will not be more than 24 million tonne and that will keep the prices firm."
He further added, "So if you take this into consideration, I think across the board because Karnataka is going to see the lower production of maybe the drop in the production while UP may see an increase in the production. So one has to go for the bigger mills in which one can improve – infact I will be comfortable with two-three names, first is the Shree Renuka, second is Balrampur Chini and third is one small sugar mill from south that could be Bannariamman Sugars and the EID Parry from Tamil Nadu. So overall the situation is quite good and from hereon also I am expecting that share can give 20% return inspite of good run up, which we have seen in the share price of Renuka, Balrampur Chini, Bajaj Hindusthan and all."