If one was to look at the history of the sugar industry. Two things would stand out, their balance sheet was ridden with debt. Why it was ridden with debt because it is an industry where the policy and political interference was maximum. Second, the companies used to dread the time when elections were coming closer. The reason was simple, in order to please the vote bank, there would be announcements which would put pressure on the industry. The top most being the hike in the minimum support price (MSP) or fair remunerative price as it is called by this name also. It is essentially the minimum price at which sugar mills are supposed to buy sugar cane from farmers. But things have changed for the better in the last ten years and debt numbers and also stock prices are clearly showing that. There is no arbitrary change in policy around election time. The question is whether a better debt situation would lead to stronger re-rating this time?
