About The Company
Sri Renuka Sugar has been engaged in sugar industries from several years and has significant ratio in the market. The stock has been the captain and most preferred stock in sugar industry in the capital market. Among the investor the stock has been much fancied in the domestic market.
About The Results
Renuka Sugar has posted net profit of Rs.33.20 crores on total income of Rs.443 crore for second quarter ending 31st March 09, on consolidated basis. These results either look bad or flat when we compare it with the results of corresponding quarter, in the previous year, as PAT was at Rs.32 crores on total income of Rs.561 crores. So, a drop in the topline of 21% and rise in PAT by just 3.75%.
However, we call these results as very good. This is because, there is an increase in stock and inventory of Rs.336 crores during the quarter, while for 6 months ending it has risen by Rs.578 crores, which were risen by Rs.174 crores and Rs.274 crores, respectively for the respective period in the previous year. Inspite of lower crushing of sugarcane in this season, we have seen such a steep rise in the inventory, on which, there is unrealized gain of about Rs.140 crores, which will get booked and realized in the next two quarters.
The company has also made huge import of raw sugar, estimated to be close to 40 lakh bags, on which, it is likely to make a PBT of Rs.150 crores. In sugar segment, the company had an EBIT of Rs.20.60 crores for March 09 quarter on income of Rs.294 crores while same were at Rs.10.30 crores on Rs.159 crores in the corresponding quarter of previous year. Cogeneration contributed an EBIT of Rs.38 crores and distillery of Rs.12.90 crores for the quarter, which have risen by about 22%. These divisions had almost flat bottomlines, from other sugar companies, whereas it has risen here.
About The Stock
Sugar is itself on the lime light due to already hike in price and further expectation of rising price graph. The company as a individual is progressive and good. The stock has the potential enough to be part one investor’s portfolio.It could be titled as investor’s stock.
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