I beleive we need to look at sugar and steel a bit differently, at least we need to look at TISCO and Balrampur/Bajaj Hindustan separately. I will illustrate here.
1.TISCO is a fully integrated player whereas the sugar giants are dependent upon cane prodicers for the supply of raw materials.
2.Politicians have a bigger incentive to disincentivise sugar mills. The popular involvement is very high in case of sugar, not so much in steel, so the government is very likely to react on sugar bouncing up too much.
3.Most of the acquisition made by Sugar plants have been inside the country, they did little to diversify the country risk. TISCO on the other hand, has made expansion overseas. Be it NatSteel, Millenium Steel, Bluescope Joint venture or Corus.
4.The balance Sheets of sugar stocks and TISCO are vastly different. This is a quantitative subject on which I will come later.
5.Management quality is very very different. TISCO never came on the revered CNBC and talked about carbon credits. The focus of TISCO is missing in most of the sugar companies.I still remember, how these sugar guys used to talk during their hay days. They used to talk so loud and clear about their grand plans.... where have they gone. They had so much to say on ethanol, where are they now? They had to say so much on demerger, remember, triveni Engineering.... now what? TISCO never indulged in all this stuff.
6.Most of the sigar companies have diluted their shareholdings and TISCO hasnt. This is perhaps one of the most important distinctions. I am sure, if the market beats down TISCO a lot, they will pick up their stake from the market, like they have done with some of their companies like Tata Chemicals, but as far as sugar stocks, they simply dont have the guns to buy-back the stocks which they have issued at such a premium. they know only how to dilute , and consolidation is something which appears to be least on their agenda.
Now i will come to benefit for retail shareholders aspect.I belive retailers are here to lose money, in case they dont apply foresight, which is the case with most of them. The opportunity cost which tempts them to sell indiscrimately makes them repent. They want Hot stuff, but they forget that they dont have the stomach for Hot Stuff. So, i beleive its needless for a company to think of them. They show faith in wrong things most of the time, and show utter sceptism most of the time, so there is little to help them. So, if you only think ticker gives you the return then watch the tape and make money if you can....So, although I belong to the community of retail shareholders but am proud to hate them. I admit I talk harshly but I simply dont beleive that thiose who change their faith at the drop of hat deserve to be called investors....
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