Balrampur Chini Mills creates fresh 52-week high amid market downturn

Sugar stocks rise on the backs of the robust outlook for Q3

Amid the markets dipping down today, this sugar stock is trading at a sweet spot. Balrampur Chini Mills Ltd is trading near its 52-week high of Rs 437.55 on the backs of strong results expectations in the upcoming quarter. In fact, this upward trend can be seen across the sugar stocks. Balrampur Chini Mills is one of the leading sugar companies in India.

Many brokerage houses have expressed a positive outlook for the industry. A strong December quarter is expected by the markets which is why the stocks are trading high. According to the CRISIL report, sugar prices are likely to witness a growth of 16% to 17% in the current season. This would lead to better sales and increased profitability. A surge in industrial demand and a boost in exports is expected to drive the growth in the sector. For well-integrated sugar mills like Balrampur Chinni itself, it is likely to benefit from increased revenue from the distillery segment as a growth of 4% to 6% is expected with the rise in offtake by oil marketing companies. A relatively lower rise in prices of cane is likely to favour the margins and hence the profitability.

The company had witnessed a strong September quarter as the consolidated net sales grew by 6.4% on a sequential basis to reach Rs 1,214 crore. The profitability too jumped by 12.87% to Rs 81 crore on a QoQ basis.

Balrampur Chini Mills has been a mutlibagger stock of the year. Its price has gone up from Rs 174 to Rs 427 in just a year, delivering a high return of 145%. In the last five trading sessions, the stock has moved up by 17.85% creating fresh 52-week highs.

As of January 6, 2022, the stock is up by 2.3% to Rs 427.20 as of noon on the BSE.