Renuka Sugar share surges 30% in two days. What’s driving stock in weak market

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Renuka Sugar shares have been skyrocketing for last two days. Renuka Sugar share price today opened with an upside gap of around 2.50 per share and went on to hit its intraday high of 49.15 apiece levels, close to its upper circuit level of 49.50 apiece. Due to such sharp upside move in last two days, sugar stock has been able to deliver around 35 per cent return to its shareholders in last one week.

According to stock market experts, Renuka Sugar share price is appreciating due to the news buzz of Adani group taking over the sugar company in near future. As sugar sector is already buzzing on ethanol blending policy announced by the central government, this news break has worked as an additional catalyst for the sugar stock. However, market experts maintained that rise in Shree Renuka Sugar share price is completely speculative as neither of the companies have issued any official statement in this regard.

Speaking on Renuka Sugar share price rally; Avinash Gorakshkar, Head of Research at Profitmart Securities said, “This rise in Renuka Sugar shares are completely speculative as neither of the company has issued any official statement in this regard. If we look at the valuations of the company even after they are taken over by the Adani group, this much of rise in two days is much above the existing valuations of the company. So, my advice to positional retail investors is to refrain from taking any position in this sugar counter and look at other sugar counters.”

Echoing with Avinash Gorakshkar’s views; Saurabh Jain, Vice President — Research at SMC Global Securities said, “Sugar sector is abuzz on ethanol blending policy announced by the Government of India (GoI) and this is going to have a long-term impact on sugar companies. So, one should buy quality and big sugar companies like Balrampur Chini, Triveni Engineering and Dhampur Sugar.”

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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