Wait and watch for sugar stocks: TS Anantakrishnan

In a chat with ET Now, TS Anantakrishnan, Head-Prime Wealth Management, shares his views on sugar stocks.

These stocks have been beaten down but couple of sugar experts did suggest if indeed there is a change of guard at UP some of the north based sugar mills could actually see a brief respite, may be a trading respite if not then immediate activity respite, what is your sense?

We would tend to agree because from macro standpoint the sugar pricing internationally is around 24 cents. From that standpoint it is not as if that there is huge demand per se, there is supply which is matching more than enough the demand and we are talking about exports from India.

So from that standpoint we do not really see the macro environment having improved as far as the supply demand equation is concerned, but as far as sentiment goes if the BSP goes out that will be a positive for the Balrampur’s and the Bajaj Hindustan, because BSP is no more from favouring the farmer standpoint.

So from that standpoint there would be a leg up and we see value in many of these sugar plays. They are obviously trading much below their replacement value.