| 5. sudhakar 2/6/2010 3:16:26 AM IST |
Price @BSE - Rs 180.55 when posted |
| Anyone received bonus shares of Renuka Sugar? |
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| 4. News 12/7/2009 6:14:17 AM IST |
Price @BSE - Rs 229.6 when posted |
In the first acquisition of any foreign sugar and ethanol unit by an Indian company, Shree Renuka Sugars Ltd (SRSL), one of the largest producers in the country, has acquired Brazil`s Vale Do Ivaí SA Açúcar e Álcool (VDI) at an enterprise value of $240 million (Rs 1,112 crore).
Sugar companies are looking for opportunities abroad, partly due to restrictions on undertaking farming directly.
SRSL will pay $82 million (Rs 380 crore) now and the balance over eight years. It plans to finance the acquisition by leveraging the $105 million (Rs 506 crore) it raised through a qualified institutional placement (QIP) of shares in July. Narendra Murkumbhi, MD of SRSL, had earlier said the proceeds would be used on refinery and cogeneration plans |
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| 3. Insight technical 11/24/2009 11:47:57 AM IST |
Price @BSE - Rs 229.20 when posted |
Shree Renuka Sugars
Hold
Price: Rs 230 Target Price (Sep`10): Rs210
Gains stacked up, again!
* 4Q09 profits lower than estimates, despite significant trading
profits surprise- Shree Renuka (SRSL) reported 4Q09 adjusted profit of
Rs1.01bn vs. our estimate of Rs1.65bn. Trading profits of Rs0.68bn (vs.
our est of Rs0.15bn) off-set substantially lower profits in sugar, cogeneration
and distillery segments. Sugar sales came in 25% lower than
our estimate on account of 9% lower volume (as SRSL holds 0.30mnt of
white sugar vs. our estimate of 0.18mnt) and 17% lower realisation.
Management acknowledged lower realisation (vs. market prices) was on
account of incorrect timing of sales. This coupled with (a) sugar inventory
valuation at Rs21/kg vs. Rs23/kg our est. (b) lower co-generation and
distillery sales due to lower volumes and (c) forex loss Rs57mn (vs. our est
of Rs148mn of income) led to disappointment in results.
* Cane price guidance surprises, cut our gross spread on cane sugar
by 16-17% in FY10/11E– In line with management guidance, we raise
our sugar realisation assumption by 6% for FY10E to Rs33-34/kg (non-levy
sugar) and cane price assumption by 13% to Rs270/quintal for FY10E. This
leads to gross spread (sugar realisation-cane price) of Rs5.4/kg vs.
Rs6.6/kg earlier. SRSL expects sugar production in India to increase by
~40%, leading to some softness in sugar prices. Therefore, we assume 7-
11% drop (YoY) in sugar and cane prices in FY11, curtailing our gross
spread assumption from Rs6.9/kg to Rs5.8/kg (still reflect higher than
FY10E). We believe inventory gains and higher refinery EBITDA could offset
the cut in cane sugar profitability.
* Raise estimates by 7% for FY10E to reflect inventory profits- We
increase inventory EBTIDA gains for FY10E by Rs2.15bn to Rs3.9bn on
account of higher inventory volume and realisation than our earlier
estimates. We increase our refinery EBITDA assumption by 8-15% for
FY10/11E to reflect higher sugar realisation. We note our current estimates
do not factor in SRSL`s Brazilian acquisition Vale Do Ivai (VDI) in current
estimates as operational and financial details are not yet disclosed.
* Raise target price marginally, maintain Hold– We continue to value
SRSL based on 1 year forward up- cycle multiple of 12x FY11EPS of Rs17.6
and arrive at our Sep`10 target price of Rs210 (from Rs208 earlier) and
hence maintain Hold at current price (potential downside of 10%). We note
that while stock price may track sugar prices in near term, we think
concerns over the longevity/severity of the cycle will eventually emerge,
thus impacting valuation multiple. Key risks to our recommendations are
higher sugar realisation and lower cane price than our assumptions. |
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| 2. insight 11/17/2009 12:47:21 PM IST |
Price @BSE - Rs 234.70 when posted |
Shree Renuka Sugars
Hold
Price: Rs 230 Target Price (Sep`10): Rs208
Acquisition not material, stock fairly valued
* Acquisition augurs well for refinery strategy, but does not reduce
volatility- Shree Renuka (SRSL) recently announced acquisition of Vale Do
Ivai (VDI), a midsize sugar and ethanol company in Brazil with intent to
backward integrate its refineries in India. VDI can fulfill only ~20% of
requirement. More importantly, we believe VDI`s standalone performance
is more crucial as it will be part of consolidated statements (whether it
exports raw sugar to SRSL or otherwise), going forward. Moreover, VDI
may accentuate up-cycle/down-cycle impact as large portion of costs (like
cost of cane cultivation and overheads) are fixed in nature. We have not
modeled VDI performance as its financial and operational details are not
yet available.
* Higher cane prices largely off-set incremental cane sugar
realisations – We raise our sugar realisation estimate for FY10/11E by 20-
36% to Rs 28.8-26/kg respectively, in line with our outlook on sugar
prices. We think global and domestic sugar prices are likely to remain firm
as India`s production will lag consumption by 7mnt in FY10E and Brazil`s
production is likely to start by Apr-May`10. However, post that, prices are
likely to soften as more clarity emerges on (a) sugarcane planting in India
and (b) Brazil`s ongoing production. We also raise our sugarcane price
assumption by 20-35% to Rs240-210/quintal for FY10/11E respectively as
SRSL continues to follow its policy of sharing higher realisation with
farmers, leading to capped benefit of higher sugar realisation.
* Raise estimates for FY10/11E mainly driven by refinery
EBITDA/volume- We raise our FY10/11E earnings by 148-92%
respectively to mainly reflect refinery performance. We increase our
refinery EBITDA assumption for FY10E by 187% to Rs9.4/kg (vs. Rs3.3/kg
earlier) led by higher sugar realisation, as SRSL has locked in raw sugar at
lower levels. We increase our volume and margin estimate for FY11E by
48-27% respectively to reflect Mundra refinery operations.
* Raise target price, maintain Hold– We continue to value SRSL based on
1 year forward up- cycle multiple of 12x FY11EPS of Rs17.3 and arrive at
our Sep`10 (rolled forward from Sep`09) target price of Rs208 (from Rs142
earlier) and hence maintain Hold at current price (potential downside of
10%). We note that while stock price may track sugar prices in near term,
we think concerns over the longevity/severity of the cycle will eventually
emerge, thus impacting valuation multiple. We believe key risks to our call
are sugar/power realisation higher than our estimates and lower cane
prices than our assumptions.
Note: More intra-day opportunities will be provided
live during the market hours
Contact : +91 982222686 |
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| 1. results 4/25/2008 7:26:57 AM IST |
Price @BSE - Rs 122.25 when posted |
Results March 2008 Querter:
Shree Renuka Sugars net profit rises 139.37% in the March 2008 quarter.Sales rise 92.34% to Rs 471.80 crore.Net profit of Shree Renuka Sugars rose 139.37% to Rs 30.40 crore in the quarter ended March 2008 as against Rs 12.70 crore during the previous quarter ended March 2007. Sales rose 92.34% to Rs 471.80 crore in the quarter ended March 2008 as against Rs 245.30 crore during the previous quarter ended March 2007. |
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