Stock of this sugar company has zoomed 100% in less than 3 months
Shares of Ponni Sugars (Erode) rallied 11 per cent to hit an all-time high of Rs 479.15 in Thursday’s intra-day trade, in an otherwise weak market. In less than three months, the stock of sweetener has appreciated 100 per cent from Rs 240.10, which it had touched on September 28. Ealier, it surpassed its previous high of Rs 455 apiece, which it had touched on December 19, 2022.
At 11:47 AM; Ponni Sugars (Erode) traded 7.5 per cent higher at Rs 462.65, as against 0.45 per cent decline in the S&P BSE Sensex. The average trading volumes on the counter jumped 1.5 times as around 640,000 shares changed hands on the NSE and BSE.
In the past one month, the stock surged 51 per cent, as against 3.4 per cent decline in the S&P BSE Sensex. On significant price movement, Ponni Sugars (Erode) on December 21, clarified that it has no company specific information to report pursuant to Regulation 30 of LODR, other than what we have been furnishing from time to time.
“We understand that as per press reports, prices of sugar securities have surged due to the government’s decision to reduce Goods and Service Tax (GST) rate on Ethanol and positive outlook for sugar sector amid optimism that the Government may allow additional sugar exports,” the company said.
While announcing the September quarter (Q2FY23) results on October 28, Ponni Sugars (Erode) said that the company is reasonably confident to carry forward and sustain its good show in H2FY23 (October-March). Barring imponderables, FY22/23 the management remains confident of yet another year of comforting performance.
The Indian sugar production estimated for 2022-23 season would again be a new record, sustaining the current phase of unending surplus. The country is in dire need to shore up exports in the next 5-6 months before the new Brazilian crop from its expanded production arrives. Hence, the export window is narrow, which has turned narrower by the inexplicable delay in export policy announcement.
However, the ethanol blend program is going well and would subsume about 45 lakh tonnes of sugar this season. This, in turn, should fine-tune demand-supply parity, given that the sugar prices stay stable.
“The worst worrisome years of successive drought have thankfully is behind us and our operational area, like the rest of Tamil Nadu, benefitted by copious monsoon showers in the last two years. Moreover, the full storage in the Mettur reservoir that feeds our sugarcane area and our proactive promotional efforts through planting subsidy, there has been a strident surge in sugarcane cultivation. As a result, sugarcane crushing for the quarter touched an all time high ever since the start of our sugar mill,” the company added.
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