India's Sugar Industry & How to Make Multibagger Returns timing the Sugar Cycle

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Many sugar stocks gave 200% returns in FY22. Infact it's a pattern that gets repeated every few years. In this video, I shall detail the key variables that affect the Indian sugar industry, how to differentiate one sugar company from another and most importantly, the identification of the sugar cycle which holds the potential to deliver multibagger returns to investors
India's sugar industry is a vibrant and complex sector that plays a crucial role in the nation's economy. From the cultivation of sugarcane to the production of crystalline sugar, this industry involves numerous stages and processes. From climate and weather patterns to government policies and international market dynamics, each element influences the sugar cycle and its impact on potential profits. Understanding these factors is vital for anyone considering investment opportunities within the sugar sector.
Infact, one of the most intriguing aspects of India's sugar industry is its potential to deliver multibagger returns. The sugar cycle, characterized by alternating periods of surplus and deficit, presents a unique opportunity for investors to capitalize on market fluctuations. In this video, I provide valuable insights and strategies for investors looking to navigate this cycle and maximize their returns. In the process, we'll be examining 5 sugar stocks namely Balrampur Chini Mills, Shree Renuka Sugars, Dwarikesh Sugar Industries, Bharat Dalmia Sugar and Dhampur Sugar Mills
👉 Video Chapters:
00:00 Sugar Industry in India
00:46 1. Sugar Industry Regulations & Controls
04:15 2. Cyclicality of Supply & the Sugar Cycle
05:39 3. Working Capital Requirements of Sugar Mills
06:51 4. Cost of Sugar Production
09:00 5. Integrated Sugar Mills
10:38 6. Operating Profit per Ton
11:25 7. Capacity Utilization Ratio
12:14 8. Return on Capital Employed
13:13 9. EV / EBITDA
14:03 10. Contingent Liabilities
14:47 Shankar's Viewpoint
👉 Useful Resources/Reading material
‣ Dr. Vijay Malik’s excellent post on the Sugar Industry in India (a must read) : www.drvijaymalik.com/sugar/
‣ Indian Sugar Sector by Systematix : images.assettype.com/bloomber...
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#sugarindustry #balrampurchini #shreerenukasugars #dhampur #dwarikeshsugar #sugarcane #sugarcrash #ethanol
Disclaimer: I am not a SEBI registered investment advisor or research analyst. The content posted on this platform is purely for educational purposes and none of it constitutes investing or trading advice. Viewers should do their own research and diligence before investing or acting on the information presented

[@shankarnath]

I had this perception for a long time that one should not invest in a cyclical sector due to the "risks" involved. I might have said it in a video or two aswell. But in doing these industry videos & after talking to many sector experts, I'm getting the impression that the risk I was framing in my head is more informational in nature. Essentially, if we understand the key variables, patterns and invest accordingly, then it not only reduces the downside probability but accelerates the upside. In simpler words, lowers the risk & improves the return The sugar industry is an example of this cyclical pattern. Between Jul 2014 to Jun 2015, sugar stocks dropped by 50% ... Jul 2015 & Jun 2017, the sugar stocks were up by 350% .. Jul 2017 to Jun 2018, the stocks were down 60% .. Jul 2018 to Jan 2020, stocks were up by 200% .. Feb 2021 to Apr 2022, stocks were up by 200% etc. I wonder if other commodities like the oil sector, steel, natural gas, fertilizers, coffee, cotton, paper etc. all follow similar cycles and if there are pockets of opportunities there. In case you have done detailed research on any such sector esp. around cycle identification, then appreciate if you can share the same with me over email. Thanks! Here's my playlist of sector analysis videos: kzbin.info/www/bejne/o5W2ZaFmh5imZrc

[@dr.joeldias5184]

Been wanting to study this sector for quite some time. Thanks a ton sir. Impeccable job as always

[@shankarnath]

Most welcome, hope you find it useful.

[@meganathankns6375]

It's helpful for college projects

[@nabeelyahiya]

Excellent video as always. Such videos are full of knowledge sugars❤

[@shankarnath]

Thank you Nabeel ji. Glad you found it informative

[@mr.talkstock7282]

Thanks for this amazing & comprehensive overview of the Sugar Industry. Very helpful & insightful

[@shankarnath]

Thank you very much, Ali. Glad you found it informative, I love making these sector videos inspite of it being quite time consuming. I learn a lot in the process

[@pranaykanugo7297]

Thanks a lot sir for the informative video 😊

[@shankarnath]

Most welcome Pranay

[@ramd9581]

Beautiful Shankar, thanks so much

[@shankarnath]

Most welcome! 🙌

[@sreejaysreedharan4085]

Shankar ji intense and top quality information as usual... congratulations and best regards.

[@shankarnath]

Thank you very much Sreejay ji, glad you found it informative.

[@satyaprakashchoudhary6957]

Very informative and analytical video. Thanks Shankar 🎉

[@shankarnath]

Most welcome, glad you liked it

[@manishbakliwal6920]

Eye opener video. Good explanation

[@shankarnath]

Thank you very much

[@vaidya29]

Neat and crisp, as always, fan of you from ET money times.

[@shankarnath]

Thank you very much!

[@chandrasekhar-jf8fc]

4:44 wt a anolysis sir

[@shankarnath]

Glad you liked it, Chandra Sekhar. It's the most important part of the process and from where multibagger returns (100-200% returns) can be made

[@chandrasekhar-jf8fc]

@@shankarnath if we fallow that cycle then we know entry exit in this sector. Thank you sir for this valuable content.

[@subh2173]

One more deep analysis on ethenol and distillery unit

[@lavansagar797]

Very good in depth analysis sir.. 👍

[@shankarnath]

Thank you very much, Lavan

[@sangramkesharidas6767]

Super analysis as always!!! Thank you Sir😊

[@shankarnath]

Glad you liked it, Sangram. Personally, I enjoy these sector analysis videos; I've done 7 of them and the phrase "PE Ratio" hasn't appeared in any of them accentuating the fact that measuring the strength of a business & industry is as important (probably more) as measuring the relative price per rupee of profit. I don't want to be stubborn about this but to put it in a quote: "Investing in a strong but expensive business is a lot better than committing capital to a weak but cheaper business"

[@sangramkesharidas6767]

@@shankarnath absolutely agree with you sir ❤️

[@rreddy4640]

Sir, good info. 👍.how is Renuka Sugars stocks

[@ajiduraipandi5195]

Great sir.... More data and information before this videos... Thanq for your valuable time

[@shankarnath]

Most welcome

[@upgrad3605]

Excellent. You deserve 1 million followers.

[@shankarnath]

Thank you so much 😀

[@arbazahmed5470]

Sector analysis series are very good

[@shankarnath]

Thank you very much!

[@uttammali3987]

Very good

[@shankarnath]

Thanks

[@subh2173]

Thank you sir

[@shankarnath]

Most welcome

[@nishanthgaleti2707]

Nice analysis sir

[@shankarnath]

Thanks for liking

[@chetan_l]

Request to KZbin... Can you please introduce a 'pranam' button instead of the thumbs up button for Shankar Nath's videos please? Thank you so much for your comprehensive videos, sir - as usual! 🙏

[@shankarnath]

Most welcome, glad you found it useful.

[@rajagopalram7783]

Thanks Shankar for highlighting the point on contingent liabilities. Honestly, I never thought of this but given the type of industry where you have little to no control, you shouldn't complicate your problems by ignoring a risk which is there for us to see. I liked this video a lot. All the best. The only thing you seemed to have missed is the sugarcane recovery comparison. Also, from my dated knowledge it is the UP mills that has the highest recovery %. Can you check on this aspect and let us know the actual picture.

[@shankarnath]

Thank you for your appreciation and suggestion. I'll circle back once I have more information on sugarcane recovery, generally it's around 9-10%. Even UP mills has just 9.60% last season

[@Manikandan-fc7oc]

Thank you sir, definitely a great video to understand the sector, well articulated...also it will be great if you could share how FY24 is for sugar sector were Elnino is affecting the production but not expecting any revision in price in favour of mills until election gets over.

[@shankarnath]

Most welcome and thanks for the suggestion!

[@HimanshuSharma-ec6hy]

Hi Shankar- thanks for making our investment life easier and simpler by sharing such insightful and intriguing videos! Can you also create similar videos for late mid 30s (like me) middle-class salaried folks to increase our the top-line (money inflow) considering the latest employment landscape here in India, dysgenic macro factors, evolving geopolitical factors and uncontrollable technological interventions from uncharted Generative AI applications? This’ll be too helpful. Regards, Himanshu

[@shankarnath]

Thanks for the suggestion, I'll try

[@shaikakber4717]

❤

[@nuruljannah1373]

How price white sugar in India

[@monthlysipportfolio7453]

Why are REIT down right now even the market is at the top plz reply🙏

[@ravindradaundkar9905]

Thanks a lot Sir. What if someone does that much thorough analysis from the farmers perspective.

[@shankarnath]

Most welcome

[@pritipandya3870]

Namskar Sir, humble request to make a video on how to evaluate or track the mutual fund in which we are invested? So that we can decide whether we should continue to invest in the same fund or change. Thank you

[@shankarnath]

Thanks for the suggestion

[@kishorereddy9089]

Do a video related on fertilizer industry

[@shankarnath]

Thanks for the suggestion

[@naveenkumar-ts6oj]

Hi Sir, I like the way you educate. I have a confusion regarding midcap funds. I want to invest in mid cap funds please guide us where to invest either in actively managed funds or index funds.

[@shankarnath]

Hello Naveen, I haven't done any research lately on midcaps so I can't give you an answer right away. I'll add this to my content queue

[@naveenkumar-ts6oj]

@@shankarnath Thanks for the swift reply. I will definitely wait for the video.

[@walkerx27]

ponni erode sugar??

[@arulmuruganK94]

pls do analyses on consumption & manufacturing sector

[@shankarnath]

Thanks for the suggestion

[@hsdrdeath055]

How do conduct these research? Should make a course or a video on that

[@shankarnath]

I read a lot. I read reports from brokerages, read white papers released by the government, articles published by popular business publications etc.

[@hsdrdeath055]

@@shankarnath you are doing a great job sir. Really learning a lot. Video quality is amazing

[@arijitkarmakar5050]

GREAT WORK SIR AS ALAWAYS .. PLEASE MAKE A VIDEO ON HOSPITAL SECTOR

[@shankarnath]

Thanks for the suggestion

[@KamleshMohanty369]

I was thinking if you could talk about Bajaj Hindusthan Sugar. I’ve bought it at 17 and I’m thinking of putting more in the stock. Sugar is not my profit pool but their capacity to produce ethanol is.

[@nabeelnm7183]

What about buying bajaj hindustan sugar

[@shankarnath]

Please do apply the 10 points discussed in this video against Bajaj Hindusthan Sugar. I should mention this company has been flirting with insolvency for a few years now & is not out of the woods. I would also suggest one applies what we have learnt in earlier videos when making the investment thesis. For instance, Bajaj Hindusthan has been on the lower side of capital expenditure. Like data shows, Balrampur Chini spent over 1,000 crores in capex in the last 5 years while Bajaj Hindusthan spent less than 100 crores. These things matter so please factor that in your analysis.

[@sunil6301]

You could have recomented some stocks.

[@mkpoonia]

Sir ,we really need your hindi youtube channel

[@derekdsouza8631]

Eid parry has left the chat

[@arvindkumar-eu6vb]

Don't change the clothes in between. It breaks the focus.

[@shankarnath]

Thanks for your feedback

[@9092295555]

Sugar industry is cyclical & price controls are rigid . Better avoid this sector.