Sugar Stocks Continue Uptrend on Healthy Outlook. Can the Rally Sustain?

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  
  • Home
  • Views On News
  • May 4, 2021 - Sugar Stocks Continue Uptrend on Healthy Outlook. Can the Rally Sustain?

Sugar Stocks Continue Uptrend on Healthy Outlook. Can the Rally Sustain?

May 4, 2021

In an otherwise weak market, sugar stocks rallied up to 20% yesterday on strong earnings outlook and optimism over the government's policy on ethanol blending.

Most of the sugar stocks hit the upper circuit limit on Monday with shares of E.I.D. Parry and Balrampur Chini hitting their 52-week highs.


Company Name % Gain
Bajaj Hind. Sugar 19.9
KM Sugar 19.9
Dhampur Sugar 19.6
Dwarikesh Sugar 19.6
Avadh Sugar 18.9
Dalmia Bharat Sugar 17.3
E.I.D. Parry 16.7
Balrampur Chini 16.3
Vishwaraj Sugar Ind 11.3
Shree Renuka Sugars 9.9

Factors Contributing to the Rally

India's sugar industry is set to benefit from global and domestic factors.

Lower output from countries like Brazil, Thailand and the EU would keep supplies tight, enabling India to increase exports.

Harvest trends are pointing at lower sugarcane yield this year in Brazil and other key sugar-producing countries are not expected to produce higher output.

According to reports, sugar output for April in Brazil was down 35% year-on-year (YoY).

A Reuters report quoting industry group Unica said: "Brazil's center-south sugar output was only 624,000 tonnes in the first half of April versus 971,000 tonnes in a similar period last year. Cane crush was seen at 15.6 m tonnes, 30% less than in 2020."

This bodes well for India as lower output from these countries will keep supply tight and global prices firm.

On the domestic front, favorable policies, rising ethanol demand (blending target of 20% by CY25 from 8% currently), aggressive ethanol capacity addition would drive an earnings by going forward.

The government's steps to ensure sugarcane farmers are paid without significant arrears has also boosted investor sentiment.

So far this year, Indian sugar mills have exported 2.49 m tonnes of sugar. An additional 3.03 m tonnes of sugar is in transit, according to trade body AISTA (All India Sugar Trade Association).

Sugar Prices on the Rise

Domestic sugar prices have increased 7-8% in last one month mainly due to high summer demand & crushing season getting over reflecting no surprises on sugar production front.

Media reports state that many analysts believe domestic sugar prices would remain above Rs 34/kg given aggressive exports & diversion of sugarcane towards ethanol production.

Similarly, global sugar prices are also on rise and have risen as much as 15% in the past two months.

Equitymaster's Technical View on Sugar Stocks...

We reached out to Brijesh Bhatia, Research Analyst at Equitymaster, and Editor of the premium monthly recommendation service Fast Profits Report, for his technical view on sugar stocks.

As per Brijesh, sugar stocks are looking positive. As per his charts, they are breaking out and could potentially deliver huge returns.

Brijesh believes that sugar still has a huge upside when it comes to an investment for next 12-15 months. As per him, in the next 12-15 months, you might make a big wealth creation.

In fact, Brijesh has recorded a video explaining why sugar stocks are ready to soar higher.

Check out this video to find out more.

How Sugar Stocks are Performing Today

Sugar stocks are trading on a mixed note today as investors booked profit in some stocks after the recent run-up.

Shares of Triveni Engineering and Dalmia Bharat Sugar fell 5% while Uttam Sugar plunged 10%.

Bajaj Hind. Sugar rose over 6% while Sakhti Sugars surged over 9%.

Sugar stocks have been trending higher in the recent months, amid expectations of a rise in exports from India amid lower output in Brazil and a consequent surge in global prices.

So far this year, shares of Dalmia Bharat Sugar & Industries have surged 108%, while those of Triveni Engineering have climbed 98%.

Balrampur Chini has advanced over 85%. Other stocks including Dhampur Sugar Mills, DCM Shriram Industries, Bannari Amman Sugars, and Bajaj Hindustan Sugar have also seen their share prices increase significantly.

All sugar stocks are in the green in 2021.


We will keep you posted on the latest developments from this space.

Stay tuned!

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

Equitymaster requests your view! Post a comment on "Sugar Stocks Continue Uptrend on Healthy Outlook. Can the Rally Sustain?". Click here!

  

More Views on News

Are India's Top Ethanol Stocks Set for Sky High Returns? The Answer Will Surprise You... (Views On News)

Feb 24, 2022

Ethanol stocks have witnessed a massive upward rally for the last one year. Will the uptrend continue in 2022?

5 Indian Companies that are Buying Back Shares Big Time (Views On News)

Sep 8, 2021

In fiscal 2021, buybacks jumped to two-year high with 61 companies buying back shares worth Rs 392.9 bn.

Sugar Stocks on a Roll: Shree Renuka Sugars & Dalmia Bharat Sugar up 45% in a Week (Views On News)

Jun 10, 2021

We discuss the recent run-up in sugar stocks and reasons behind the rally.

Sugar Stocks are no Longer Sweet. Here's why Sugar Stocks are Falling... (Views On News)

May 12, 2022

Here's why sugar stocks saw a sharp decline in recent days.

Sugar Rush! Top 4 Sugar Stocks to Watch Out for in 2022 (Views On News)

Feb 9, 2022

Sugar firms are witnessing a sweet rally on ethanol optimism. The momentum is expected to continue throughout 2022.

More Views on News

Most Popular

2022's Best Performing Penny Stocks So Far... (Views On News)

Mar 2, 2022

We are just two months into 2022 and several penny stocks that we track have already surged 5x.

5 Debt Free Penny Stocks with Good Profitability to Watch Out for in 2022 (Views On News)

Mar 16, 2022

Debt free penny stocks are vital when it's a question of portfolio diversification in a volatile market. They can potentially offer good profitability in the long run.

Penny Stocks to Buy and Hold Beyond 2022 (Views On News)

Apr 6, 2022

A step-by-step method to pick the best penny stocks for the long term.

6 Penny Stocks that Could Be Hidden Bluechips. Take a Look... (Views On News)

Apr 13, 2022

These penny stocks can become future multibaggers. Watch out for them.

Adani Power vs Tata Power: Which Power Stock is Better? (Views On News)

Feb 28, 2022

Rising electricity consumption provides a lot of scope for growth. Which company has a better chance at capturing it?

More

Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2022
Get our special report Multibagger Stocks Guide (2022 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

BALRAMPUR CHINI SHARE PRICE


May 20, 2022 (Close)

TRACK BALRAMPUR CHINI

  • Track your investment in BALRAMPUR CHINI with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks

MORE ON BALRAMPUR CHINI

BALRAMPUR CHINI 8-QTR ANALYSIS

COMPARE BALRAMPUR CHINI WITH

MARKET STATS