Renuka Sugar Share Price Target 1st Dec 2015
Renuka Sugars Share Price did tank today by almost 10 percent and did send some short term investors or traders into a bit of a worry but as per our analysis of the share price / Charts we feel that such panics must be bought into as the next bullish cycle in sugar sector (both raw sugar prices and sugar stocks) will take sugar stocks and raw sugar prices to unbelievable prices. Sure there could be short term volatility before that cycle starts I am not denying that at all. IN fact it is better to see short term volatility so that the weaker hands get out of the stock and then the same traders and investors will come jumping back to buy the stock at significantly higher prices.
We reiterate Renuka Sugar Target is 68 in 24 months and we do not recommend this stock for trading. We have been bullish on Renuka Sugar since the price was between 7/8 Rs and even now we are saying buy this stock on dips and accumulate. Once the stock starts running we will not be able to accumulate at that time since it is human tendency to think that you might get the stock / share price a little cheaper from where it quoting but more often than not that does not happen and the stock price just zooms and most traders / investors do not get a chance to buy again.
Over the past few months I have clearly said in the coming time we will be seeing massive bullish triggers for Indian Sugar Sector and that includes decontrol of sugar, higher ethanol blending in petrol but most important will be extremely higher International raw sugar prices which will be going through the roof and that will suddenly change the viability of the sector. In addition to these there will also be a onetime part debt waiver for sugar companies and this will suddenly overnight change the balance sheets and the smart money knows that hence in terms of percentage moves we are seeing Renuka Sugar and Bajaj Hindustan move more faster than Eid Parry which incidentally is a debt free company.
India is about to implement a new policy in sugar in the next 60 days which will stop traditional way of growing sugar cane and in the next 2 seasons that will significantly affect fresh crop production. Brazil will also see significant shortfall than estimated production levels.
Reiterate Buy and Hold on dips for 24 months for target price of 68. ( and don’t bother about where the stock . share price goes in the short term if you get it cheaper just buy and think God is rewarding you for good karma)
Good Investing To You!