【出版时间及名称】：2010年4月印度制糖行业研究报告
        【作者】：汇丰银行
        【文件格式】：pdf
        【页数】：48
        【目录或简介】：

Despite recent correction in sugar
stocks, we expect further weakness due
to likely sugar oversupply till 2012
 Falling prices to squeeze margins; cut
FY10e-FY11e EPS c25-70%; Our FY11e
EPS c30-60% below consensus
 Downgrade Bajaj Hindusthan, Balrampur
Chini and Triveni to UW(V) and Shree
Renuka to N(V) from OW(V)
Sugar price outlook is bleak. Indian sugar prices have fallen
c40% from the peak in February 2010 under the threat of
government measures to control demand and amid upward
revisions to CS 2009-10 Indian sugar production estimates by
ISMA. We believe the outlook for sugar prices in India has
turned bleak as the sharp rise in sugar production will lead to
oversupply until 2011-12. We expect a three-fold increase in
inventory to 5.2 months of consumption (close to the peak
inventory of 6.3 months in 2006-07). The revival of
production in India and Brazil (+19% y-o-y to 34mt in
centre-south region which produces 90% of production) is
likely to keep international sugar prices soft.
Cut earnings estimates. With falling sugar prices, we reduce
our forecast by c10-30% for FY10e (INR30-32/kg) and FY11e
(INR24-25/kg). We reduce our FY10e-FY11e earnings by c25-
70% for sugar companies under our coverage as cane cost
decline is unlikely to offset the fall in sugar price, which will
lower margin estimates (c50-1100bps). We expect earnings to
fall in the next two years till FY12e on margin pressure. HSBC
FY11e EPS is c30-60% lower than street estimates.
Downgrade sugar stocks to N(V) or UW(V). We
downgrade Bajaj, Chini and Triveni to UW(V) from OW(V)
and Renuka to N(V) from OW as we reduce target prices for
sugar stocks under our coverage. We are admittedly late as
sugar stock prices have fallen 33-41% with the exception of
Triveni (+29% y-t-d) after strong 2009 performance. The
sugar stocks currently trade at 1-yr forward PB of 1.3-2.3x
and EV/EBITDA of 5.5-9x. Given risk to earnings driven by
sugar oversupply and weaker margins, we expect multiples to
contract to PB of 1-1.5x and EV/EBITDA of 5-6x like in the
last down cycle. Key risks – bad weather and delay in sugar
imports or raw sugar refining