Share of Shree Renuka Sugars Limited rose 5 per cent to hit a 52-week high of Rs 34.05 in early trade on BSE today.
The sugar stock has gained 113 per cent in the last one month. It opened 5 per cent higher at Rs 34.05 against the previous close of Rs 32.45 on BSE. Market cap of the firm rose to Rs 7,247.51 crore.
As per the share price history, Shree Renuka Sugars' share closed at Rs 16.03 on May 25, 2021. It hit an intraday high of Rs 34.05 in the morning session today. In a month, the stock has delivered 113 per cent returns.
The share stands higher than 5 day, 10 day, 20 day, 50 day, 100 day, and 200 day moving averages. The sugar stock has gained 251 per cent in the last 12 months and risen 180 per cent since the beginning of this year.
An investment of Rs 5 lakh in the stock a year ago would have grown to Rs 17.39 lakh today.
"The minimum equality target on the upside comes to Rs 38. The stock is trading well above its 50 DEMA and 200 DEMA. The volumes have also increased with this breakout hence it's a price volume breakout," Jay Thakkar, VP and Head of Equity Research, Marwadi Shares and Finance Limited, told Business Today.
"The momentum indicator MACD is well into the buy mode at all the time frames i.e. from daily to monthly charts. The Crucial support on the lower side is pegged at 13 hence till it holds this level on a closing basis the medium-term outlook is positive," he added.
Sugar stocks have been on a roll, outperforming the market this far in FY22. Recently, Prime Minister Narendra Modi said that the target date for achieving 20 per cent ethanol-blending with petrol has been advanced by five years to 2025 to cut pollution and reduce import dependence.
Ethanol extracted from sugarcane as well as damaged food grains such as wheat and broken rice and agriculture waste is less polluting and its use also provides farmers with an alternate source of income.
Speaking at the launch of the ethanol road map on the occasion of World Environment Day, Modi said that the target for mixing 20 per cent ethanol in petrol has been brought forward from 2030 to 2025.
Currently, about 8.5 per cent ethanol is mixed with petrol as against 1-1.5 per cent in 2014, he said adding ethanol procurement has risen from 38 crore litres to 320 crore litres.
The company's largest shareholder is Wilmar International Limited, with ownership of 62%. In September 2020, the board of the Shree Renuka Sugar Limited approved allotment of 21.17 crore equity shares at Rs 8.74 per share, aggregating to Rs 185 crore on a preferential basis to promoter Wilmar Sugar Holdings.
"With ethanol blending by oil marketing companies (OMCs) picking up pace and with the Government's stance on increasing the blending targets to 20% supported by the remunerative ethanol pricing and incentive schemes to build up capacities to achieve the same, the economics of sugar industry is getting better," CARE Ratings said in a report.
It believes that with sugar inventories getting rationalised, demand-supply balance evening out and a considerable increase in ethanol sales, the cash flows of integrated sugar mills are going to enhance in the next three to four years.
Shree Renuka Sugars operates eleven mills globally (four in Centre-South Brazil and seven in India) with integrated ethanol and power co-generation capacity. The company also has two large port-based sugar refineries in India.
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