Technical analyst, Ashwani Gujral advised investors to purchase Balrampur Chini stock on declines in order to achieve a target of Rs 128.

The investors can achieve the target within a period of 3-4 weeks, and the strict stop loss for the suggested stock should be Rs 94.

The stock has great potential. It can still exhibit superb surge. The long term traders are recommended to hold the stock.

On Monday (April 21), the company’s shares closed at Rs 104.80 on the Bombay Stock Exchange (BSE). The total volume of shares traded at the BSE was 1827403. The share price has seen a 52-week high of Rs 127.9 and a low of Rs 49.9 on BSE.

Rating agency ICRA, on March 29, assigned an `LA+` rating to the Rs 8.41 billion long-term debt program and Rs 6.2 billion fund based bank limits of Balrampur Chini Mills (BCML), indicating high credit quality rating.   

ICRA also assigned `A1` rating to the Rs 685 million non-fund based limits of the company. The rating indicates highest credit quality in the short-term. Within this category, certain instruments are assigned the rating of A1+ to reflect their relatively stronger credit quality.

ICRA reaffirmed the `LA+` rating assigned to the Rs 300 million NCD program of the company and the A1 rating assigned to the Rs 5 billion commercial paper/short-term debt of the company.

The rating action takes into account the company`s significant size of sugar operations, its high level of operating efficiency and forward integration into the alcohol and power business, which provides a degree of cushion against cyclical trends in the sugar business.

The rating is however constrained by the significant supply overhang arising out of a bumper crop in SY 2006-07and SY 2007-08 which resulted in a significant pressure on prices, profitability and liquidity of Indian sugar manufacturers including BCML. ICRA has also taken note of the fact that the company has challenged the state advised price (SAP) fixed by the Government of Uttar Pradesh (GoUP) for the SY 2007-08.

Other stocks from the same sector that looks good for short term trading includes Bajaj Hindustan, Shree Renuka and Triveni Engg.