Sugar Company Stock To Buy For 14% Upside In 1-3 Months: HDFC Securities

Indices after extending gains for 3 consecutive days in trade on December 10, 2021 towards the later part of the trade pared most intraday losses, with Nifty trailing back above 17,500 points. Nifty PSU Bank among the sectoral indices emerged as the outlier, gaining over 2.5 percent with Banking Amendment Laws awaiting Cabinet Nod. As per government sources, there are plans to place them in the ongoing Winter session of the Parliament. Hence probably a run up in the pack.

Besides, broader markets also outperformed the headline indices with gains on both the Nifty Mid Cap and Small Cap indices. Meanwhile, brokerage firm HDFC securities based on technical analysis has yet again today come up with its Positional call for considering investment for a short term of between 7 days -3 months.

Ugar Sugar: Buy Ugar Sugar For Rs. 37 Target To Be Realised In 1-3 Months

The brokerage has suggested a 'Buy' on the scrip of Ugar Sugar Works for a price target of Rs. 37. Buying range suggested by the brokerage has been between Rs. 28.5-29.7 per share. Stop loss to be maintained for the trade is Rs. 27, while the buy call is given for a time horizon of 1-3 months.

Considering the last traded price of Rs. 32.45, the target level implies an upside of 14 percent.

HDFC Securities’ Technical Observations of Ugar Sugar Works

Ugar Sugar is in an intermediate uptrend as it has been making higher tops and higher bottoms for the last several months.

After recently correcting from a high of 40 and finding support around the 25 levels which also roughly coincides with the 50 week SMA, Ugar Sugar has bounced back smartly over the last few sessions and resumed its intermediate uptrend.

Further amid higher than average volumes, the stock has also broken out of the 25-28 levels this week. Technical indicators provide for positive signals as the stock is trading above the 20 day SMA. Weekly momentum indicators like the 14-week RSI have bounced back and are in rising mode now. This augurs well for the uptrend to continue.

Current price trajectory of Ugar Sugar Works:

The stock of Ugar Sugar Works in trade on December 10, 2021 was locked in 10% upper circuit limit at a price of Rs.32.45 per share.

About Ugar Sugar: 

This is a small cap company with m-cap at Rs. 365 crore. The company is into the production of white crystalline sugar. Also, the company has its own distillery and offers premium brands such as Whisky, US Rum, Doctors Brandy, Gagarin among others. Apart from it the company's products also include byproducts-bagasse, final molasses and filter cake. The company is also into the power business.

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