Stock market today: Sugar stocks came under the radar of the Indian stock market bulls during early morning deals on Friday. Sugar majors Dhampur Sugar, Balrampur Chini, Dalmia Bharat, Shree Renuka Sugar, and Triveni Engineering witnessed strong upside movement during the early morning session. They logged up to an 8 per cent intraday rise on Friday.
Sugar major Dhampur Sugar share price opened with an upside gap at ₹220 apiece on the NSE and touched an intraday high of ₹229 within a few minutes of the opening Bell, logging an intraday rise of over 8 per cent. Balrampur Chini share climbed to an intraday high of ₹625 apiece on the NSE after a gap-up opening, logging an intraday rise of around 8 per cent. Likewise, shares of Shree Renuka Sugars, Dalmia Bharat, Andhra Sugar, etc., witnessed strong buying during the early morning deals on Friday.
According to stock market experts, sugar stocks are rising because the Government of India (GoI) has removed the cap on sugar diversion for ethanol production for the 2024-25 season. This policy change allows sugar mills to produce ethanol from sugarcane juice and B-Heavy molasses, enhancing their operational flexibility and potential profitability.
Triggers for sugar stocks
Speaking on the reasons that are fueling sugar stocks today on Dalal Street, Seema Srivastava, Senior Equity Research Analyst at SMC Global Securities, said, “Bulls are putting their weight behind sugar stocks in the intraday trade as the GoI has removed the cap on sugar diversion on ethanol production in FY25. The GoI aims to raise the ethanol blending percentage in petrol and diesel to the tune of 15 per cent by the end of CY25. They have decided to uplift this ethanol blending percentage to the tune of 25 per cent by the end of CY2030.”
“As sugar companies are cashing in from this GoI’s decision on ethanol blending, the decision has opened an avenue for revenue for sugar manufacturing companies. So, bulls are discounting the recent development benefiting the sugar companies in the near term,” said Srivastava.
Stocks to buy today
Asked about the sugar stocks that one can buy, Seema Srivastava of SMC Global Securities said, “One can look at the stocks that are bigger in size and have strong fundamentals while choosing a sugar stock. I think one can look at Dhampur Sugar and Balrampur Chini shares for medium to long-term.”
(This is a developing story. Keep refreshing for more updates)