Notwithstanding the current optimism in the sugar sector, Shree Renuka Sugar is amongst the top five losers on the bourses, currently at an intra day low level of Rs.14.65, down almost 3%.

The reason for the stock slumping down today is an downgrade report from rating agency, ICRA. It has downgraded some of its loans to “D” citing delays in debt servicing as one of the main reasons It has downgraded the long term rating of BB with negative outlook and short term loans from A4 to D. The company has an outstanding on bank facilities to the tune of Rs.6513 crore.

ICRA has stated, “delays in debt servicing by the company in the recent past owing to stretched liquidity position arising from adequate accruals from core operations and high debt repayment obligations,” is the reason.

If one may recollect, the company’s Brazilian subsidiaries recently filed for bankruptcy protection and the management in trying to restructure its loans in Brazil.

ICRA has noted that though the current indications are of a recovery in sugar prices, it would take a prolonged period of healthy prices to make any positive impact on the company’s numbers.