AUM Capital sees a 21.7 per cent upside in EID Parry (INDIA) on the back of a significant transition from being a pure-play sugar manufacturer to an Fast Moving Consumer Good (FMCG) player. The brokerage has given the target price of Rs 774 apiece with a 'buy' call. 

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"As a tool for effective diversification, EID Parry is now looking to grow revenues from FMCG and biofuel segments as climate vagaries and change in government policies and regulations plague the sugar sector from time to time," the report read. 

Furthermore, as per the brokerage, the company is in the process of heading towards a sustainable multi-year growth phase, transforming from a single vertical (sugar) to multiple verticals (sugar, bioenergy, food & nutrition).

EID Parry has laid the foundation stone for its FMCG business comprising value-added products like jaggery, brown sugar, low-glycaemic index sugars, and other sweeteners. 

This transition is done primarily to mitigate the risks associated with the sugar sector in general as Government policies and climatic uncertainties. It is also expected to cash on the GOI’s ambitious Ethanol Blending Programme for which it has undertaken substantial investments in its’ distillery business. 

Moreover, the strategic decision to channel its sugar sales from the direct retail segment to large institutions has enabled it to generate a premium over the open market.

Additionally, leveraging new-age technologies like Artificial Intelligence (AI) will give a competitive advantage. EID Parry also has a multilingual app for use by their network of more than 5,000 farmers for crop health monitoring, yield forecasting, and other purposes.

Also, EID Parry’s stake in Coromondel International is valued at around Rs 20,344 crore and Coromandel International is the largest phosphatic fertiliser and agrochemicals maker in the private sector. 

EID Parry share price: Past performance 

In a year, shares of EID Parry have gained over 28 per cent against Nifty50's rise of over 22 per cent.  

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