Shree Renuka Sugars Ltd Stock Quotes and Charts
Results March 2008 Querter:<br>Shree Renuka Sugars net profit rises 139.37% in the March 2008 quarter.Sales rise 92.34% to Rs 471.80 crore.Net profit of Shree Renuka Sugars rose 139.37% to Rs 30.40 crore in the quarter ended March 2008 as against Rs 12.70 crore during the previous quarter ended March 2007. Sales rose 92.34% to Rs 471.80 crore in the quarter ended March 2008 as against Rs 245.30 crore during the previous quarter ended March 2007.
Shree Renuka Sugars<br>Hold<br>Price: Rs 230 Target Price (Sep`10): Rs208<br><br>Acquisition not material, stock fairly valued<br><br>* Acquisition augurs well for refinery strategy, but does not reduce<br>volatility- Shree Renuka (SRSL) recently announced acquisition of Vale Do<br>Ivai (VDI), a midsize sugar and ethanol company in Brazil with intent to<br>backward integrate its refineries in India. VDI can fulfill only ~20% of<br>requirement. More importantly, we believe VDI`s standalone performance<br>is more crucial as it will be part of consolidated statements (whether it<br>exports raw sugar to SRSL or otherwise), going forward. Moreover, VDI<br>may accentuate up-cycle/down-cycle impact as large portion of costs (like<br>cost of cane cultivation and overheads) are fixed in nature. We have not<br>modeled VDI performance as its financial and operational details are not<br>yet available.<br><br>* Higher cane prices largely off-set incremental cane sugar<br>realisations – We raise our sugar realisation estimate for FY10/11E by 20-<br>36% to Rs 28.8-26/kg respectively, in line with our outlook on sugar<br>prices. We think global and domestic sugar prices are likely to remain firm<br>as India`s production will lag consumption by 7mnt in FY10E and Brazil`s<br>production is likely to start by Apr-May`10. However, post that, prices are<br>likely to soften as more clarity emerges on (a) sugarcane planting in India<br>and (b) Brazil`s ongoing production. We also raise our sugarcane price<br>assumption by 20-35% to Rs240-210/quintal for FY10/11E respectively as<br>SRSL continues to follow its policy of sharing higher realisation with<br>farmers, leading to capped benefit of higher sugar realisation.<br><br>* Raise estimates for FY10/11E mainly driven by refinery<br>EBITDA/volume- We raise our FY10/11E earnings by 148-92%<br>respectively to mainly reflect refinery performance. We increase our<br>refinery EBITDA assumption for FY10E by 187% to Rs9.4/kg (vs. Rs3.3/kg<br>earlier) led by higher sugar realisation, as SRSL has locked in raw sugar at<br>lower levels. We increase our volume and margin estimate for FY11E by<br>48-27% respectively to reflect Mundra refinery operations.<br><br>* Raise target price, maintain Hold– We continue to value SRSL based on<br>1 year forward up- cycle multiple of 12x FY11EPS of Rs17.3 and arrive at<br>our Sep`10 (rolled forward from Sep`09) target price of Rs208 (from Rs142<br>earlier) and hence maintain Hold at current price (potential downside of<br>10%). We note that while stock price may track sugar prices in near term,<br>we think concerns over the longevity/severity of the cycle will eventually<br>emerge, thus impacting valuation multiple. We believe key risks to our call<br>are sugar/power realisation higher than our estimates and lower cane<br>prices than our assumptions.<br><br>Note: More intra-day opportunities will be provided<br>live during the market hours<br><br>Contact : +91 982222686
Shree Renuka Sugars<br>Hold<br>Price: Rs 230 Target Price (Sep`10): Rs210<br><br>Gains stacked up, again!<br><br>* 4Q09 profits lower than estimates, despite significant trading<br>profits surprise- Shree Renuka (SRSL) reported 4Q09 adjusted profit of<br>Rs1.01bn vs. our estimate of Rs1.65bn. Trading profits of Rs0.68bn (vs.<br>our est of Rs0.15bn) off-set substantially lower profits in sugar, cogeneration<br>and distillery segments. Sugar sales came in 25% lower than<br>our estimate on account of 9% lower volume (as SRSL holds 0.30mnt of<br>white sugar vs. our estimate of 0.18mnt) and 17% lower realisation.<br>Management acknowledged lower realisation (vs. market prices) was on<br>account of incorrect timing of sales. This coupled with (a) sugar inventory<br>valuation at Rs21/kg vs. Rs23/kg our est. (b) lower co-generation and<br>distillery sales due to lower volumes and (c) forex loss Rs57mn (vs. our est<br>of Rs148mn of income) led to disappointment in results.<br><br>* Cane price guidance surprises, cut our gross spread on cane sugar<br>by 16-17% in FY10/11E– In line with management guidance, we raise<br>our sugar realisation assumption by 6% for FY10E to Rs33-34/kg (non-levy<br>sugar) and cane price assumption by 13% to Rs270/quintal for FY10E. This<br>leads to gross spread (sugar realisation-cane price) of Rs5.4/kg vs.<br>Rs6.6/kg earlier. SRSL expects sugar production in India to increase by<br>~40%, leading to some softness in sugar prices. Therefore, we assume 7-<br>11% drop (YoY) in sugar and cane prices in FY11, curtailing our gross<br>spread assumption from Rs6.9/kg to Rs5.8/kg (still reflect higher than<br>FY10E). We believe inventory gains and higher refinery EBITDA could offset<br>the cut in cane sugar profitability.<br><br>* Raise estimates by 7% for FY10E to reflect inventory profits- We<br>increase inventory EBTIDA gains for FY10E by Rs2.15bn to Rs3.9bn on<br>account of higher inventory volume and realisation than our earlier<br>estimates. We increase our refinery EBITDA assumption by 8-15% for<br>FY10/11E to reflect higher sugar realisation. We note our current estimates<br>do not factor in SRSL`s Brazilian acquisition Vale Do Ivai (VDI) in current<br>estimates as operational and financial details are not yet disclosed.<br><br>* Raise target price marginally, maintain Hold– We continue to value<br>SRSL based on 1 year forward up- cycle multiple of 12x FY11EPS of Rs17.6<br>and arrive at our Sep`10 target price of Rs210 (from Rs208 earlier) and<br>hence maintain Hold at current price (potential downside of 10%). We note<br>that while stock price may track sugar prices in near term, we think<br>concerns over the longevity/severity of the cycle will eventually emerge,<br>thus impacting valuation multiple. Key risks to our recommendations are<br>higher sugar realisation and lower cane price than our assumptions.
In the first acquisition of any foreign sugar and ethanol unit by an Indian company, Shree Renuka Sugars Ltd (SRSL), one of the largest producers in the country, has acquired Brazil`s Vale Do Ivaí SA Açúcar e Álcool (VDI) at an enterprise value of $240 million (Rs 1,112 crore).<br><br>Sugar companies are looking for opportunities abroad, partly due to restrictions on undertaking farming directly.<br><br>SRSL will pay $82 million (Rs 380 crore) now and the balance over eight years. It plans to finance the acquisition by leveraging the $105 million (Rs 506 crore) it raised through a qualified institutional placement (QIP) of shares in July. Narendra Murkumbhi, MD of SRSL, had earlier said the proceeds would be used on refinery and cogeneration plans
please let me know whether the srs share price of srs share price will go up? when? i have 400 shares at 73/-<br>thanks<br>rangan
kindly any one inform me what will be the target for renuka in near term
WHY SOOOO MUCH DEMAND FOR THIS SHARE NOW????<br>Shree Renuka Sugars Ltd
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