Home Sugar News Sugar stocks on a roll on improved outlook; Shree Renuka zooms 127% in June

Sugar stocks on a roll on improved outlook; Shree Renuka zooms 127% in June

by upsugartimes

Shares of sugar companies were on a roll on Monday, with most of the stock trading at their multi-year highs on the back of up to 20 per cent rally on the bourses, on improved outlook. Shares of the companies have been on an uptrend ever since the government mandated 20 per cent ethanol blending in fuel by 2025 against the current blending of 7.79 per cent.

Considering this, sugar companies are seeing a huge, untapped demand for ethanol for the blending program of the, which can be of benefit to the sector in the future.

Promotion

Ponni Sugars (Erode) (Rs 317.50) and Uttam Sugar Mills (Rs 260.85) were locked in the 20 per cent upper circuit band on the BSE. Kesar Enterprises, Avadh Sugar & Energy, Andhra Sugars, Dalmia Bharat Sugar and Industries, Dwarikesh Sugar Industries and DCM Shriram Industries, on the other hand, rallied between 14 per cent and 18 per cent on the BSE. In comparison, the S&P BSE Sensex was down 0.20 per cent at 52,819 points at 02:30 pm.

Total eight stocks, including Balrampur Chini Mills, DCM Shriram Industries, Triveni Engineering & Industries, EID Parry, Dwarikesh Sugar Mills and Dhampur Sugar Mills were trading at their respective all-time high levels.

Individually, shares of Shree Renuka Sugars were locked in the upper circuit of 5 per cent for the sixth straight trading day, at Rs 35.75, hitting an over eight-year high, after the company said its board has approved capacity expansion of ethanol production.

Promotion

The stock was trading at its highest level since January 2013 and has zoomed 127 per cent so far in June, as compared to a 1.6 per cent gain in the S&P BSE Sensex.

“The board of directors in their meeting held on February 9, 2021, had approved capacity expansion of ethanol production from 720 Kilo Litre Per Day (KLPD) to 970 KLPD. Considering the huge untapped demand for ethanol due to the policies of Government of India on ethanol blending, the Board of Directors of the Company, at its meeting held today i.e. June 25, 2021, inter‐alia, approved further capacity expansion for ethanol production from 970 KLPD to 1400 KLPD,” Shree Renuka Sugars said in exchange filing.

Those of Dwarikesh Sugar Mills, meanwhile, said in their 2020-21 annual report that as more sugar mills sacrifice the production of sugar and graduate to the manufacture of ethanol, there is a possibility of the country’s sugar production declining with consumption and production being evenly matched in three years, hardening sugar realizations.

Promotion

“The outlook for the distillery business appears positive. There is a greater government focus in increasing the blending of ethanol with automotive fuel, increasing to in excess 7.23 per cent today and likely to increase further following Brazil’s example of 48 per cent. Going ahead, the company will focus on capital efficiency, enhancing the production of ethanol that could strengthen margins, moderate working capital outlay, increase liquidity and enhance value in the hands of all those who own a stake in our company’s progress,” the company said.Source link

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