Monday, August 17, 2009

Dhampur Sugar

Sold out Dhampur today when it siked up. Last week I thought I will keep it. But it has already done so well compared to its peers as well as the broader market (it was up today when its peers were down 5% !!) that it makes sense to take money out. Shanghai is down 6% right now - that makes it down 15% in last 2 weeks.

Sugar stocks are favourites of the speculative crowd. So even if earnings are quadrupling next year, it wouldn't matter if people decide to rush to the exits en masse. But still, I think Dhampur hits 150 next year. So hopefully it falls some and a bit more.

Dhampur: Mkt Cap = 450 crore. Debt = 900 crore. EV= 1350 crore. Sep 09 EBITDA = 200 crore. EV/EBITDA = 7x. Debt/Mkt Cap = 2x

Shree Renuka Sugars: Mkt Cap = 4700 crore. Debt = 800 crore. EV= 5500 crore. Sep 09 EBITDA = 500 crore. EV/EBITDA = 11x. Debt/Mkt Cap < 0.2x

Balrampur Chini: Mkt Cap = 2900 crore. Debt = 800 crore. EV= 3700 crore. Sep 09 EBITDA = 375 crore. EV/EBITDA = 10x. Debt/Mkt Cap < 0.3x.

The EBITDA numbers are all approx. Still, the broad argument is - sugar is in a bull market. Dhampur is the most levered. So if these stocks go up - Dhampur will benefit the most. If one makes the argument that Dhampur is cheaper on EV/EBITDA and the gap should narrow, then we get a multi-bagger.

Disclosure: No position, positions might change at any time


Penny Stock Info said...

FoodCommodities like surgar are very much in favor.

Anonymous said...

Dhampur Sugar mill is very famous.