Sugar stocks today: Shares of sugar companies like Balrampur Chini, Shree Renuka Sugars, Mawana Sugars witnessed a sharp rally up to 11% in Monday’s trading session.
Balrampur Chini Mills emerged as the top gainer among the stocks, climbing 10%, touching an intraday high of ₹738 per share. Meanwhile, Shree Renuka Sugars and Dalmia Bharat Sugar and Industries gained 5.44% and 2.29% respectively. Triveni Engineering & Industries and Mawana Sugars shares also advanced up to 4% on 31 August.
Why sugar stocks are rising today?
The rally in sugar stocks has been driven by a sharp rise in domestic and global sugar prices, boosting realisations for sugar mills. The outlook for the sector has also improved amid expectations of lower production, strong festive-season demand and tighter sugar supplies.
The government on Friday said retail sugar prices have begun to soften, with ex-mill prices falling by around 20% over the past few days. To ensure steady supplies and curb any possibility of artificial scarcity, the government also announced that sugar mills will be assigned sale quotas every fortnight starting September.
Currently, the Food Ministry sets monthly sugar sale quotas for mills. The ministry said it is closely tracking sugar availability and prices across the country and reiterated that there is no shortage of the sweetener in India.
According to Seema Srivastava, Senior Research Analyst at SMC Global Securities, the rally in sugar stocks despite tighter stockholding limits highlights a structural shift in the sector’s long-term investment case. Historically, Indian sugar companies were treated as cyclical commodity plays vulnerable to sharp price drops, delayed farmer payments, and inventory gluts. However, the ongoing structural pivot toward a bio-energy ecosystem driven by the National Biofuel Policy has significantly altered industry dynamics. By diverting surplus sugarcane toward ethanol production to meet rising blending mandates, sugar mills have unlocked a high-margin, non-cyclical revenue stream with assured offtake from Oil Marketing Companies.
Srivastava further explained that over the long term, top-tier integrated producers with strong distillery capacities (such as Balrampur Chini Mills, Triveni Engineering, and Shree Renuka Sugars) stand to benefit from multi-revenue streams spanning refined sugar, ethanol, and co-generation power.
“While weather-related yield fluctuations and periodic policy adjustments regarding export quotas or minimum selling prices present short-term volatility, the transition from pure-play sugar manufacturing to renewable green energy positions the sector for structural re-rating, higher return on equity, and sustained long-term earnings growth,” she added.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
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