Portfolio managers to relook at the sugar space: Rajesh Jain

In a chat with ET Now, Rajesh Jain, Market Strategist, talks about sugar stocks. Excerpts:

A word on the sugar stocks?

The negative news flow impact on this sector should be over and done with now. Lot of things we look forward to ethanol mandatory blending in motor gas is one positive. So by-product realisation will improve, the global sugar outlook is once again skewed in favour of demand rather than supply, so prices internationally are expected to firm up. That is another positive. Locally, decontrol is on the government's drawing board and we expect a lot of positive news flows to emerge from there which will once again start portfolio managers to re-look at the sugar space and finally when you have a player like Renuka Sugars actually getting into global acquisitions what it does is it lands stability to what is otherwise is a very cyclical business. So if you look at some of the larger players in this sector, there is a move offered to consolidate, achieve volumes in terms of scale. So you are seeing change finally happening in this sector. It is not a clone of the cement sector. There are a few differences but decontrol and liberalisation could help things a lot and this could be good point to get into sugar for a 12 to 36-month horizon and there are very excellent plays in the large size stocks that we are looking at.