Renuka Sugars Equipav acquisition may spell good opportunities: BNP Paribas

Shree Renuka Sugars has gone down. Do you think that the company’s acquisition of Equipav is a positive from a medium-term point of view?

Not medium term, long-term is what you need to see. As far as Equipav is concerned, the negative, which was hanging last evening was the debt on the balance sheet of Equipav but this morning we heard some clarification coming in from the management that it is going to be taken care by the Equipav management.

Having said that, the focus is by and large with this acquisition. Renuka Sugars is planning to import raw sugar and given the fact that Equipav is one of the largest manufacturer of sugar in Brazil, there needs to be synergies that will possibly spell good opportunities. But purely from a long-term base and long-term I mean is about a year, year-and-a-half, 2+, I do not think anything magical is going to happen. In a short to medium term and let’s give it to the government over here also, let’s hope that you do not have a scenario wherein your raw material to manufacture sugar, that the sugarcane, is at a high price and the sugar, which is the finished product you sell in the market is at lower because that does not give profitable proposition at all.