INSUBCONTINENT EXCLUSIVE:
Goel, who owned over three dozen smallcap stocks at the end of March, bought a 3.4 per cent stake in this sugar company during the quarter
the quarter, as the domestic market slumped in a post-Budget depression.
Mrs Geol owned stakes in at least seven listed companies as per
quarter-end shareholding data available on corporate database Capitaline
She bought 22,000 shares of Uttam Sugar Mills during the quarter and raised stake by 57 basis points in Dhampur Sugar to 3.45 per cent
And they did so at a time when international sugar price was at a two-and-a-half-year low of $360 a tonne in March, down nearly 30 per cent
During the quarter, the government abolished export duty on sugar, which used to face a levy of 20 per cent
Import duty went up to 100 per cent from 50 per cent.
The government also allowed 2 million tonnes of additional sugar export under the
minimum indicative export quota (MIEQ) scheme during SY2018
But exports have become unviable without export incentives as international prices are ruling 25-30 per cent below domestic prices.
To
export at the existing price, domestic millers would be incurring an upfront loss of around Rs 10 a kg, making it an unviable proposition,
India Ratings said in a note.
The rating agency has estimated a big hit on the mills in Uttar Pradesh, the leading sugar producing state, on
account of high freight costs for exports.
After recording bumper production, industry body Isma recently revised its production estimates
for sugar season 2018 (October 2017-September 2018) upward to 29.98 million tonnes as of April 15, 2018, from 26.1 million tonnes in January
A further revision in production estimates was widely expected, as 227 of the 524 mills in the country were all crushing sugarcane by
mid-April.
All of this turned the outlook for the sugar sector bleak.
Little surprise then that sugar stocks took a heavy beating through
With up to 55 per cent fall, most sugar stocks were hovering at their 52-week lows by the end of April.
The Goels surely took a big knock,
though it could not be ascertained at what prices they had accumulated these shares.
Shares of Avadh Sugar are down 52 per cent this
From a high of Rs 830 hit in February, the stock has fallen to Rs 383-odd level
The scrip hit a 52-week low of Rs 336.50 this past Friday
There was no history of the Goels holding more than 1 per cent of this stock before March quarter.
Data showed Anil Kumar Goel added 14.8
lakh shares of Dhampur Sugar to his portfolio to take his holding in the company to 10.05 per cent at the end of March quarter from 7.82 per
cent at the end of December quarter
This stock has lost 54.75 per cent this calendar and hit a 52-week low of Rs 84.45 on BSE on Friday.
Goel bought 41,000 additional shares in
Uttam Sugar Mills and owned a 4.73 per cent stake as of March 31, compared with 4.62 per cent as of December 31, 2017
This stock is down 37 per cent year-to-date and hit a 52-week low of Rs 82.65 on Thursday, April 26
In Triveni Engineering, Goel had 67.45 lakh shares at the end of March quarter, compared with 66.20 lakh at December-end
The stock hit its 52-week low on Thursday, and is down 48.42 per cent for the year
Dwarikesh Sugar hit its 52-week low the same day.
Some reports, meanwhile, suggested that the GST Council may soon propose imposition of a
cess on sugar in a bid to create a fund to help mills clear cane dues to farmers.
Reintroduction of the sugar cess and effective utilisation
of funds could make the sugar industry less cyclical in nature than it is currently, brokerage JM Financial said in a recent note
There is also news that the government may approve financial support of Rs 55 per tonne directly to the sugarcane farmers to reduce the
per cent of the sugarcane dues of Rs 90,000-95,000 crore for the season or Rs 0.5-0.6 per kg of sugar sold, or Rs 7-8 per kg of the 2
million tonnes sugar exports
brokerage said.
It, however, sounded cautious on the sugar sector
Goel is a long-term investor and on select counters, he has been holding his stakes for over 12 years now, Capitaline data suggests.
