RENUKA SUGAR One of Bullish Sugar Sector Stock

Keep a bullish view on the Big Sugar Companies and sugar sector. One more big sugar company posted results. Renuka Sugar has posted net profit of Rs.33.20 crores on total income of Rs.443 crore for second quarter ending 31st March 09, on consolidated basis. These results either look bad or flat when we compare it with the results of corresponding quarter, in the previous year, as PAT was at Rs.32 crores on total income of Rs.561 crores. So, a drop in the topline of 21% and rise in PAT by just 3.75% . Does this mean that the company has not been able to take advantage of bullish cycle of sugar sector?
Wall These results are very good. This is because, there is an increase in stock and inventory of Rs.336 crores during the quarter, while for 6 months ending it has risen by Rs.578 crores, which were risen by Rs.174 crores and Rs.274 crores, respectively for the respective period in the previous year.
The company has also made huge import of raw sugar, estimated to be close to 40 lakh bags, on which, it is likely to make a PBT of Rs.150 crores. In sugar segment, the company had an EBIT of Rs.20.60 crores for March 09 quarter on income of Rs.294 crores while same were at Rs.10.30 crores on Rs.159 crores in the corresponding quarter of previous year.
In summary, results are very good if we consider the gain to be made by the company on its inventory in the coming quarters and not to forget for keeping a bullish view on the Big Sugar Companies and sugar sector thanks