Shares of this sugar stock gained up to 5 percent after the company acquired a 100 percent stake in another company in the same industry. In the past month, the company’s stock has soared more than 20 percent.
With a market capitalization of Rs 11,832.27 crores, the stocks of Shree Renuka Sugars Limited started their trading session on Monday at Rs 54.76 and currently trading at Rs 55.59. The company’s scrip witnessed an intra-day high of Rs 57.25 indicating a gain of around 5 percent as compared to the previous close of Rs 54.29.
Such bullish stock price movements were observed after the company, in a regulatory filing with the Bombay Stock Exchange (BSE) dated 23rd September 2023, announced that the company has entered into binding agreements with ‘Anamika Sugar Mills Private Limited’, a sugar manufacturing company.
The agreement pertains to the acquisition of a 100 percent stake in the Anamika Sugar Mills thus becoming a Wholly Owned Subsidiary of Shree Renuka Sugars Limited.
The consideration is decided to be a cash one, and, the cost of acquisition is Rs 235.5 crores. The indicated time of completion of the acquisition is on or before 15th October 2023. The basic intent of acquiring the company is basically to establish a presence in Uttar Pradesh and cater to the Northern and Eastern markets.
Having a glance at the annual financials of the company, the fundamental business indicators such as the operating revenues and net profits have shown opposing directions.
The operating revenues, on one hand, went up from Rs 6,432.63 crores during FY21-22 to Rs 9,020.75 crores during FY22-23, and, the bottom line numbers, on the other hand, increased their losses from Rs 136.72 crores to Rs 196.67 crores during the same time horizon.
The shareholding pattern data, as per the quarter ended June 2023, showcases the company’s Promoters holding a 62.48 percent stake, and the Foreign Institutional Investors (FIIs) holding a 2.93 percent stake in the company.
Shree Renuka Sugars Limited is an agribusiness and bio-energy company. The company’s operating segment includes sugar – milling; sugar – refinery; trading; co-generation; distillery; engineering and others. It generates maximum revenue from the ‘sugar refinery’ segment.
Written by Amit Madnani
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