(Fortmilitiy price diangel
Last traded price (Nov 6): Rs 147.35
Market Cap: Rs 3,783 a
Balrampur Chini closed up 7 per cent in the past fortnight despite shedding some of its gains after news that the deal with Bajaj Hindusthan had failed to fructify. The latter was in talks to buy-out the company, but the deal had to be put down because of certain regulatoiy issues. The counter saw heightened activity with
delivery volumes more than doubling during the fortnight. Although some unwinding has happened, experts suggect that the stock could remain strong as the failed deal has clearly borne out the intention of promoters to sell-out, This could keep the stock huning and lilt up u.s valuations to a level a strategic buyer would like to pay. The stock trades at a forward PIE of 13.2 times September 2010 earnings, which Is a marginal premium to Its peers like Bajaj Hindusthan and Shree Renuka Sugars and this could continue to be the case. On the business front, the sector received a leg-up from the government decision to increase the levy price. Given the favourable demand-supply scenario, sugar prices hould stay firm, keeping shares buoyant in the days to come.
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