Sugar stocks jumped up to 9% as demand for ethanol-based fuel rises amid higher oil prices

Share prices of sugar companies shot up to 9 per cent on the BSE intraday during Monday’s trading session have, with a few stocks even hitting their new 52-week highs.

Toyota, Hyundai, and Suzuki have assured to launch flex engines in 6 months: PTI

Share prices of sugar companies shot up to 9 per cent on the BSE intraday during Monday’s trading session have, with a few stocks even hitting their new 52-week highs. The surge in the sugar stocks is mainly on the back of demand potential in ethanol-based fuel in the future on the back rising crude oil prices.

Union Road Transport and Highways Minister, Nitin Gadkari in his address at the Sugar and Ethanol India Conference (SEIC) 2022 in Mumbai said the decline in sugar production and rise in ethanol production is better for the industry.

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Toyota, Hyundai, and Suzuki have assured to launch flex engines in 6 months. Minister added Biofuel outlets will be opened for ethanol and recounted those two years back during the Republic Day Parade in Delhi, the fighter jets which did the flypast had 100 per cent bio-ethanol.

Individually, Balrampur Chini hit a new 52-week and jumped around 9 per cent to Rs 521.6 per share; Damia Bharat Sugar and Mawana Sugar each gained around 7 per cent to Rs 523 and 157 per share respectively; Dwarikesh Sugar soared around 6 per cent to Rs 132.95 per share on the BSE.

Similarly, Andhra Sugars jumped around 5 per cent to Rs 157.2 per share; Dhampur Sugar and Uttam Sugar each gained around 5.5 per cent to Rs 552.2 and Rs 252 per share respectively on the BSE. Even Triveni Engineering gained almost 6.5 per cent to Rs 344 per share on the BSE.

As per ICRA report, “Tailwinds from global sugar demand supply balance driving exports and higher sucrose diversion towards ethanol would allow the industry to curtail its closing inventory levels, which in turn would result in lower total debt, despite ongoing debt-funded distillery expansions,”.

A domestic brokerage house Niraml Bang noted that the sugar production and prices are expected to remain firm, supported by global prices and demand for ethanol blending.

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