Poll outcome to sweeten sugar stocks?

Sugar barons in Uttar Pradesh could be praying hard for results of exit polls that indicate the ouster of the Bahujan Samaj Party may turn true. Since the BSP stormed back to power for the fourth time in May 2007, it has been a bitter time for the sugar industry in Uttar Pradesh. Since then, the State Advised Price (SAP) for sugarcane has doubled to Rs 250 a quintal this year. For the current season that began in October, the Mayawati Government raised the SAP by Rs 40 a quintal with the early maturing variety fetching the maximum of Rs 250 a quintal. This is far higher than the Rs 145 fixed by the Centre as fair and remunerative Price. In 2010-11 alone, sugar mills in the northern spent Rs 13,000 crore in buying canes. It is unlikely that whoever succeeds Ms Mayawati will cut the SAP but the sugar industry can hope for a more peaceful time. In case the results prove the exit polls right, scrips of companies such as Bajaj Hindusthan, Triveni Engineering, Oudh Sugar, DCM Shriram could all be seen gaining.