Sugar stocks have been the flavor of the season amid the government’s ethanol blending push and bullish brokerage views in the recent past. There are many sugar stocks that have given multibagger returns over the past year.
Brokerage Sharekhan has launched a hedge with a buy rating in one of these sugar stocks.
Resetting the hedge of Dhampur Sugar Mills Limited (DSML) with a buy recommendation, the brokerage has assigned a target price of Rs 692 per share for this sugar stock due to reduced valuations and strong growth prospects.
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“We reset Dhampur Sugar Mills Limited (DSML) hedge with a buy recommendation, assigning a price target of Rs. growth prospects (focusing on ethanolization) make it another major strength in the sugar business,” he said.
Dhampur Sugar Mills Limited (DSML), one of the largest sugar companies in India with integrated facilities of 45,500 tons per day (cane milling capacity), distillery capacity of 500 kiloliters per day (KLPD) and a cogeneration capacity of 216.5 megawatts (MW), aims to increase investment in ethanol capacity with strong support from the government’s cautious blending policies, strengthen the company’s non-sugar portfolio and improve profitability overall in the medium and long term.
“The government’s support for increasing the ethanol blend to 20% by SS2025 provides an additional opportunity to improve medium to long-term growth prospects. The company has strengthened its balance sheet by reducing its debt by Rs .830 crore over the past two years due to improved cash flow (likely to further reduce debt by Rs. 320 crore by FY2024),” Sharekhan pointed out.
Any change in the government’s ethanol blending policy or dwindling sugar supply due to weather vagaries or other supply constraints would be a major risk.
As of 10:45 a.m., shares of Dhampur Sugar Mills were trading with a 2% gain at Rs 542 per share on BSE. This sugar stock has given multibagger returns to its shareholders as shares have gained nearly 200% in the past year and jumped 57% in the past month alone as of March 24, technical data from the market showed. stock.
Shares of have jumped over 650% in the past 2 years and have returned an impressive 1100% over the past 10 years.
The certificate traded at a 52-week high on March 13, while it touched the year’s low of 173.50 rupees on April 5 last year.
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