Only buyers seen in Bajaj Hindusthan; heres why!

The stock is trading at 0.71 times its book value

Bajaj Hindusthan Sugar is engaged in the manufacture of sugar, alcohol, ethanol, and the generation of power. The company continues to be the leading sugar and ethanol manufacturing Company in India with its fourteen sugar plants having an aggregate sugarcane crushing capacity of 1,36,000 TCD, six distilleries having an aggregate capacity to produce Industrial Alcohol of 800 kilolitres per day and fourteen co-generation plants having a total power generation capacity of 449 MW. 

The stock price of Bajaj Hindusthan sugar is on cloud 9 on Friday and skyrocketed nearly 20 per cent. As a result, the stock is locked on the upper circuit limit of the day. Interestingly, this up-move in the stock price is seen on the back of robust volume as the total traded volume for the day is the highest single-day volume since August 18.

So, what’s the key catalyst of this up-move in the stock price?

Well, the company has informed that they have paid the entire overdue towards term loan instalments (till September 2022), term loan interests (till November 2022) and Optionally Convertible Debentures (OCD) coupon (payable for FY 2022) to all the lenders. Accordingly, there are no overdue in their account and the account is fully regular with all the lenders as of date.

The stock has witnessed a dismal performance in the last six months, plunging nearly 20 per cent, and in the last one year, the stock is down by 12 per cent. With the overhang of debt being sorted out, seems this stock could sweeten its shareholder portfolio going forward.

The stock is trading at 0.71 times its book value.