Calendar year 2016 brought happy moments for investors of sugar stocks, which surged up to 360 per cent. Rising prices of the sweetener in the domestic as well as international markets supported the sector throughout the year. Market experts see value in selected sugar companies and believe they can surge up to 50 per cent in 2017.
On an average, sugar majors have surged over 75 per cent this year compared with 38 per cent and 32 per cent returns that they generated in 2015 and 2014, respectively.
Among the listed sugar players, shares of KM Sugar Mills rallied the most at 359 per cent to Rs 22.95 till December 15 from Rs 5 on December 31 last year. Among others, Indian Sucrose, Upper Ganges and Gayatri Sugars also climbed 326 per cent, 312 per cent and 283 per cent, respectively, during this period.
Other companies like Dwarikesh Sugar, Oudh Sugar Mills, Mawana Sugars, DCM Shriram Industries, Piccadily Sugar, Dalmia Bharat, Dhampur Sugar, Rajshree Sugars and Bannari Amman advanced between 75 per cent and 190 per cent in this period.
On a year-to-date basis, Andhra Sugar and KCP Sugar advanced 48 per cent and 5 per cent, respectively.
On a year-to date basis, shares of DCM Shriram, EID Parry and Balrampur Chini have advanced 141 per cent, 30 per cent and 70 per cent, respectively.
Overall, it was a turnaround year for most of the sugar companies in terms of profit growth.
For the half year ended September 30, 2016, companies like Shree Renuka Sugar, EID Parry, Dhampur Sugar, Balrampur Chini, Oudh Sugar Mills and Bannari Amman reported net profit of Rs 5.70 crore, Rs 141.28 crore, Rs 72.95 crore, Rs 216.70 crore, Rs 37.83 crore and Rs 67.40 crore, respectively, against net losses of Rs 301.40 crore, Rs 172.40 crore, Rs 95.14 crore, Rs 83.95 crore, Rs 81 crore and Rs 59.97 crore in the year-ago period.
Some others narrowed net losses during the first half of the financial year.
Prices of sugar as a commodity surged nearly 13 per cent on a year-to-date basis till December 15, according to the data available with NCDEX.