 "Shree Renuka hits 2-year low, blames Brazilian unit for losses")
Shares of Shree Renuka Sugars fell sharply by up to 30.36 percent to atwo-year low on the bourses today after the company reported a net loss of Rs 618.5 crore for the quarter ended 30 September 2011.
Hit by disappointing numbers, the scrip nosedived 30.36 percent to a 52-week low of Rs 36 on the BSE. It received similar drubbing on the NSE, plummeting by 29.87 percent to a one-year low of Rs 36.15.
Later, the stock trimmed some of its losses and was being quoted at Rs 41.25, down 20.21 percent from its previous close.
Moreover, brokerage houses have downgraded the stock due to delayed turnaround of Brazilian operations. CLSA downgraded the stock upon negative outlook and the stock has since lost 20 percent. According to an Economic Times report , Bank of America has downgraded the company to ‘Underperform’ from ‘Buy’ and cut its target price to Rs 38 from Rs 88, citing earning miss in September quarter.
Morgan Stanley has also downgraded the stock to equal weight from underweight, citing lower sugar prices in the international market and slower deleverage of the company’s balance sheet.
The company announced the results after trading hours on Friday. Due to higher interest and huge foreign exchange losses, Shree Renuka Sugars reported a net loss of Rs 618.5 crore for the quarter ended 30 September. The company had posted a net profit of Rs 127.8 crore for the same period last year.
Its performance was also affected because of higher interest costs, which rose to Rs 192.5 crore during the quarter ended 30 September 2011 against Rs 117.7 crore in the corresponding quarter last year.
In an exclusive interview to CNBC-TV 18, Narendra Murkumbi, managing director of Shree Renuka Sugars said under performance was primarily due to losses churned out by the Brazilian unit.
He added that since the company’s debt level is quite high, Shree Renuka may sell stake in the Brazilian subsidy or spinoff the co-gen assets.The company is however not revising sales target for the full year on account of new cane plantations in Brazil.
**Watch video:**Blame it on Rio: Shree Renuka debt soars, Brazil unit fails
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