Sugar stocks: Balrampur Chini, Dhampur, Shree Renuka, Dwarikesh shares among 32 sugar shares rallying up to 11%. Here's why

A total of 32 sugar sector stocks gained up to 11 per cent in Monday's trade after the government reversed an order on ban on the use of sugarcane juice for making ethanol. The government also allowed utilisation of the juice as well as B-heavy molasses to produce the green fuel in the 2023-24 supply year. The ban imposed on December 7 for the 2023-24 supply year (November-October) was feared to hurt earnings of sugar makers in FY25. The earlier decision was made to check sugar prices and ensure adequate supply in the domestic market.

Shares of Dhampur Sugar Mills were up 8.22 per cent at Rs 268.45. Bajaj Hindusthan Sugar Ltd advanced 9.22 per cent to Rs 30.55. Balrampur Chini Mills climbed 7.15 per cent to Rs 412.05. Dwarikesh Sugar Industries shares gained 6.39 per cent to Rs 91.38. Indian Surcose Ltd soared 10.65 per cent to Rs 90.

Shree Renuka Sugars jumped 6.86 per cent to Rs 49.99. Ugar Sugar Works Ltd advanced 7.98 per cent to Rs 86.84. Triveni Engineering & Industries Ltd added 4.96 per cent to Rs 355.30. Magadh Sugar & Energy Ltd rose 6.56 per cent to Rs 724.30.

Sugar production for 2023-24, net of diversion, is expected at 30.0-30.5 million tonne while the domestic consumption is expected at 28-29 million tonne. Excluding diversion to ethanol, sugar production is likely to be 31.5-32 million tonnes, Sharekhan said in a recent note.

Analysts tracking the sugar sector were of view that non-reversal of decision would have hurt earnings of sugar companies in FY2025. They though expected a recover in FY2026. They called the ban a "temporary blip", while suggesting long-term growth prospects for sugar sector as intact.

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