Sugar Stocks on a Roll: Shree Renuka Sugars & Dalmia Bharat Sugar up 45% in a Week

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

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  
  • Home
  • Views On News
  • Jun 10, 2021 - Sugar Stocks on a Roll: Shree Renuka Sugars & Dalmia Bharat Sugar up 45% in a Week

Sugar Stocks on a Roll: Shree Renuka Sugars & Dalmia Bharat Sugar up 45% in a Week podcast

Jun 10, 2021

Continuing their rally for the third straight day, sugar stocks extended gains and ended higher.

Shares of Balrampur Chini, EID Parry, and Triveni Engineering, among others neared their all-time highs.

Why are sugar stocks on an uptrend?

Last week on World Environment Day, Prime Minister Narendra Modi announced that the target of 20% ethanol-blended petrol has been advanced by five years to 2025.

This was done to cut pollution and reduce import dependence.

The government's policies combined with the push for higher ethanol blending in India will keep the inventory under control.

A gazette notification by the oil ministry directed oil companies to sell ethanol-blended petrol with a 20% ethanol with effect from April 2023.

Apart from the above, production shortage by large sugar-producing countries has pushed sugar stocks higher.

The domestic sugar industry is supported by low yields from Brazil and Thailand. This, in turn, has kept 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.

Global white sugar prices, which are currently higher than domestic sugar prices, increased by 14.3% over last six months to Rs 33.6 per kg.

Reports suggest that sugar prices are likely to remain steady at higher levels till January 2022.

Sugar sector outlook

On the sector outlook, Dalmia Bharat Sugar said the industry is well poised to benefit both from global and domestic factors.

The short to medium-term outlook of the industry remains promising, it added.

Meanwhile, rating agency CRISIL in a report said the profitability of integrated sugar mills is likely to go up by 75-100 basis points (bps) this financial year due to high exports for the second consecutive season and increased supplies of ethanol for blending with petrol.

India's sugar production rose by 13% to 305.68 lakh tonnes in the first eight months of the current marketing year ending September, mainly due to higher output in Maharashtra, according to the Indian Sugar Mills Association (ISMA).

Sugar marketing year runs from October to September.

The report added that sugar closing stocks are expected to decline to their lowest levels in the past four sugar seasons (SS) to 9-9.5 m tonnes in SS2020-21.

This will result in lower working capital borrowings.

The improvement in profitability and controlled debt levels will, in turn, bolster the credit profiles of integrated mills this fiscal.

Weekly performance

Sugar stocks ended higher today. Shares of Dwarikesh Sugar and Bajaj Hind. Sugar surged 5% while Uttam Sugar gained 5.8%.

So far this year, shares of most sugar stocks are up by a significant margin, given the rise in exports from India amid lower output in Brazil and a consequent surge in global prices.

Have a look at the chart below which shows the weekly top performing sugar stocks.

Ace chartist at Equitymaster, Brijesh Bhatia is bullish on sugar stocks. Brijesh believes that sugar still has huge upside when it comes to an investment for next 12-15 months.

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

Check out this video to find out more.

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 on a Roll: Shree Renuka Sugars & Dalmia Bharat Sugar up 45% in a Week". Click here!


More Views on News

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.

BALRAMPUR CHINI Announces Quarterly Results (1QFY22); Net Profit Down 46.0% (Quarterly Result Update)

Aug 11, 2021 | Updated on Aug 11, 2021

For the quarter ended June 2021, BALRAMPUR CHINI has posted a net profit of Rs 719 m (down 46.0% YoY). Sales on the other hand came in at Rs 11 bn (down 20.3% YoY). Read on for a complete analysis of BALRAMPUR CHINI's quarterly results.

BALRAMPUR CHINI Announces Quarterly Results (4QFY21); Net Profit Down 2.6% (Quarterly Result Update)

Jul 8, 2021 | Updated on Jul 8, 2021

For the quarter ended March 2021, BALRAMPUR CHINI has posted a net profit of Rs 2 bn (down 2.6% YoY). Sales on the other hand came in at Rs 10 bn (down 41.4% YoY). Read on for a complete analysis of BALRAMPUR CHINI's quarterly results.

Why Did Sugar Stocks Surge Today? (Views On News)

Jun 3, 2021

A look into the factors contributing to the rally in sugar stocks.

Sugar Stocks Continue Uptrend on Healthy Outlook. Can the Rally Sustain? (Views On News)

May 4, 2021

Sugar stocks have registered double digit gains this year on strong earnings outlook and optimism over the government's policy on ethanol blending.

More Views on News

Most Popular

5 Specialty Chemical Stocks that Turned Multibaggers in One Year (Views On News)

Sep 17, 2021

These specialty chemical stocks have surged 200% or more in the last year. Do you own any?

A Rare Buying Opportunity in an Exciting Stock (Profit Hunter)

Sep 16, 2021

Whether agriculture sector goes through a structural transformation or not, this agrochemical stock has a good chance of winning.

5 Indian Companies with Over 7% in Dividend Yield (Views On News)

Sep 17, 2021

These stocks will give you better yields than bank deposits.

How to Create a Second Income from Trading (Profit Hunter)

Sep 10, 2021

My trading system that works in all kinds of markets.

India's Most Trusted Corporate Group is... (Views On News)

Sep 11, 2021

We conducted a poll of 17 of the most popular corporate groups in India. With an overwhelming response from 5,274 participants, here is what we found.


Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2021
Get our special report Multibagger Stocks Guide (2021 Edition) Now!
We will never sell or rent your email id.
Please read our Terms


Sep 23, 2021 (Close)


  • 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