Sugar stocks remained in a structural upward trend, forming a higher peak and trough on the long-term chart. Balrampur Chini Mills shares after last month’s break appear to be forming a higher base around last year’s highs placed around ₹380 levels, said national brokerage ICICI Securities, which has a buy rating on the stock.
Sugar stock has managed to hold above the upward sloping support trendline joining lows since March 2020, highlighting elevated buying demand that signifies inherent strength. The brokerage expects multibagger stock to maintain a positive bias and head towards ₹445 levels with a time horizon of approximately three months.
Balrampur Chini (BCML) is the second largest sugar company with a sugar crushing capacity of 76,000 TCD, a distillery capacity of 560 KLD and a cogeneration capacity of 172 MW. It undertakes a distillery capex of 490 KLD and the modernization, decongestion of its sugar cane crushing capacity in several factories.
With the investments from the distillery, Balrampur Chini would be able to increase its ethanol volumes by 2.2x to 35 crore liter by FY24. Distillery Sales to Witness a CAGR of 33.6% at | 1954.8 crores in fiscal years 21-24E, which would be 33% of total revenue. He undertook the modernization and decongestion of certain factories.
“This would lead to higher sugarcane crushing and better recoveries by FY24. We are forecasting a 7% CAGR of revenue for FY21-24E. The company is introducing a new variety of sugarcane in its catchment areas, which would reduce reliance on Co-0238,” ICICI Securities remarks highlighted.
Balrampur Chini Mills Limited is one of the largest sugar manufacturing companies in India. Shares of the company have performed multibagger by rallying more than 120% over a one-year period as they are up around 6% in 2022 (year-to-date or year-to-date). year) so far.
The opinions and recommendations made above are those of individual analysts or brokerage firms, and not of Mint.
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