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Sugar Sector

- - - - - Sugar Sector Sugar

168 replies to this topic

#1
Ahsan Amin

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    Sugar Sector – What is hidden in the sector?

    The purpose of the report is to understand the sector and some of the points we should know in the sector.


    Main Points Highlighted for Sugar Sector – As on June 30 2006

    The following reports studied and data has been taken from these companies only: -

    - Al Noor Sugar
    - Tandlianwala Sugar Mills
    - JDW Sugar mills
    - Dewaan Sugar
    - And Shakerganj Sugar mills

    Negative Points

    Following are the negative points of the sector.

    1) Issuance of extraordinary circular by SBP for Margin restrictions for financing against security of Sugar stock is going to affect the liquidity of the sugar mills.

    2) As SBP intends to discourage hoarding of sugar, sugar mills forced to sell sugar against the norms of market.

    3) PAT affected due to higher Interest rate scenario.

    4) Most of the company's production hit due to the shortage of cane in the season.

    Production Figure

    Name of the Company Sugar Production in 2006 (M.Tons) Sugar Production in 2005
    ( M. Tons)
    Al Noor Sugar 62,722 49,004
    Shakerganj Mills 89,201 114,358
    Tandliawala Sugar 130,015 76,901
    Dewaan Sugar 178,366 No Data


    Cash Position for Considering the Point 1 of the above:

    Name of the Company Cash Balance as on June 30 2006 (Rs in Million)
    Al Noor Sugar 29.972
    Shakerganj Mills 92.558
    Tandliawala Sugar 161.795
    Dewaan Sugar 121.37
    JDW Sugar 151.711

    Short Term Borrowing Vs Long Term Borrowing



    Name of the Company Short Term Borrowing
    As on June 30, 2006 (Rs in Million) Long Term Borrowing
    As on June 30, 2006 ( Rs in Million)

    Al Noor Sugar 751.197 104.978
    Shakerganj Mills 6,564.845 1,548.849
    Tandliawala Sugar 2,232.152 1,039.587
    Dewaan Sugar 2,359.450 654.678
    JDW Sugar 2,001.597 2,559.886


    The above table clearly indicates that Sugar sector rely more on short-term finance than the Long-term finance. Now two things will be negatively affect the bottom line of the companies in the coming months.

    1) SBP circular regarding the margins
    2) Rising interest rate Scenario


    Now below is the Nine Months EPS of these Sugar Companies

    Name of the Company EPS June 06 EPS June 05
    Al Noor Sugar 2.87 0.87
    Shakerganj Mills 2.27 3.04
    Tandliawala Sugar 2.0 2.34
    Dewaan Sugar 1.25 0.52
    JDW Sugar 9.71 7.41


    Positive Points

    1) The water position has improved in Sindh. Thus, it is expected that a much better sugarcane crop would emerge for crushing season 2006-07. (Good news for Al Noor Sugar because it is located in Nawabshah.)

    2) It is mentioned in one of the report that the availability of sugar stocks in the country is now in excess of the country's requirements for the remaining year.

    According to the Latest Statistics of trade, until July 06 Sugar import figure stands at 62.2 m ton where as in July 05 it was 16 M tons, growth of 289%.

    Now below is the Stock in trade figure; just to see who is holding how much Sugar?

    Name of the Company Stock in trade As on June 30, 2006 (Rs in Million) Stock in trade As on September 30, 2005(Rs in million)
    Al Noor Sugar 605.436 207.485
    Shakerganj Mills 2,930.923 941.516
    Tandliawala Sugar 2,226.610 489.356
    Dewaan Sugar 2,205.885 1,797.218
    JDW Sugar 879.387 0


    onclusion

    The outlook of the sugar sector will depend on the selling prices of sugar in the last quarter of the year. Coming month is Ramzan and we know that sugar consumption in the month of ramzan is on peak but Rising interest rate and SBP circular regarding the margin will be the key hurdle in the earnings of the sector.

    (If you find any error, do tell me and your comments are always welcome)
    Now do discuss which company is better for investment.
    Regards


    #2
    AbDuLmAtEeNkHaN

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    Dear Ahsan bhai ,,,, JazaakAllah for posting n taking time n arranging it in superb way .. bro .. you are right ramzan is here and next coming quarter results of sugar are always good as of the demand of sugar ins Ramzan .. well bro for the best scrip u can check which is near overbought rang or just started the journey as you know most of the sugar scrip’s have lo vol big players try tu accumulate at low levels n then suddenly rally starts and we awam get stuck at high levels ….. so playing in sugar sector homework + full concentration on the moment of the share needed …. Rest all the best .. Please do share your top picks in sugar sector …. Mara tu pata hay app ko … CHAS hay what about you and others.. Do share … :goodl:

    Posted Image




    Click Here For: "Daily Reports From Different Brokerage Houses"
    Note: Please make your own due diligence before making any decision

    Regards,
    Abdul Mateen Khan

    #3
    tezimandi

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    Tandalianwala Sugar Mills

    #4
    AbDuLmAtEeNkHaN

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    View Posttezimandi, on Sep 11 2006, 09:44 PM, said:

    Tandalianwala Sugar Mills

    arry baro .. thora aur bata dain es kay baray mian high , lows and kahan accumulation ke liye acha hay aur kahan profit taking ke liye etc ...

    JazakAllah

    for CHAS you can check ..

    http://www.tezimande...?showtopic=4151

    Posted Image




    Click Here For: "Daily Reports From Different Brokerage Houses"
    Note: Please make your own due diligence before making any decision

    Regards,
    Abdul Mateen Khan

    #5
    tezimandi

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    at this price it is very very attractive current rate 15.30

    October 2005 to Septemeber 2006
    low 14.30 high 24.70

    #6
    Ahsan Amin

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    Mateen Bhai truley speaking, Sugar sector Ki nobody can forecast. Sirf Bluff Martee hain yeh huga woh huga...U can take the example of JDW. 2 qtr tak earning 2 rs thi aur 3 qtr mei 9 rs. kaisee pata nahi bus price achi thi sugar ki yeh reason bata dya. Most save investment is tandliawala sugar. The reason is they are in expansion phase but high interest rate ka problem hai. baaqi tu sugar sector see door hi rehna chaheye.
    Regards






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