Axis Securities's research report on EID ParryAfter a couple of tough years, we see light at the end of the tunnel for EID Parry (EID) and the sugar industry as a whole. For EID, in particular, the following will provide a positive swingFY17 onwards: (1) Rise in sugar prices on inventory correction given severe drought conditions in Maharashtra and Karnataka for two consecutive years and higher exports driven by government subsidy of Rs 45/ ton; (2) Higher distillery profits on mandatory 5%ethanol blending in petrol; (3)Turnaround in Silk Road Refinery and; (4) Strong growth prospect for Nutraceuticals business. The government’s intent is to move to a revenue sharing model between the farmer and miller, in line with the recommendations of Rangarajan committee; however, successful implementation is key to sustainable profits for the industry.
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