Sugar stocks hit upper circuit as govt focuses on ethanol blending

New Delhi: Shares of sugar companies continued the strong momentum with many stocks hitting the upper circuit limits in Monday’s trade. Prime Minister Narendra Modi, on Saturday, advanced the country’s target of 20 per cent ethanol blending in petrol by five years to 2025 from 2030.The move will help India cut oil import bills and reduce carbon emission in cities. A gazette notification by the Oil Ministry directed oil companies to sell ethanol-blended petrol with a 20 per cent ethanol as per the Bureau of Indian Standards specifications with effect from April 2023.

Shares of KM Sugar rallied 20 per cent to Rs 23.40 on Monday morning, while

Sugars soared 16 per cent to Rs 384.8. Dharani Sugars, , Dharani Sugars & Chemicals and Rana Sugars gained 10 per cent each, the circuit limit for these counters.

Uttam Sugar Mills, Avadh Sugar, Magadh Sugar, Dwarikesh Sugars, KCP Sugar & Industries and Indian Sucrose gained between 6 and 9 per cent. Triveni Engineering, Ugar Sugar Works, Bajaj Hindusthan and Simbhaoli Sugar were up by 5 per cent each.

Elara Capital is bullish on

after all three segments contributed to higher profitability in March quarter. The brokerage firm has reiterated ‘buy’ rating on the stock with a target price of Rs 396.

Domestic sugar industry is also supported by the low yields from Brazil and Thailand has kept the supply tight. Brazil faces the worst sugar production in 91 years. Brazil is the largest producer and exporter of sugar. India is more focused on producing ethanol from sugar and excess food grains.

In an interview with ET Now, Abinash Verma, Director General, ISMA, expects prices of sugar to remain steady at higher levels till January 2022.

“I would say till then the picture is very clear, even from the point of view of Brazilian sugar production. The season gets over in a couple of months from now, so there is no surprise coming,” he added.