INVC NEWS
Mumbai : The recent surge in sugar company shares can be attributed to the Indian government’s significant decision to lift restrictions on the diversion of sugar to produce ethanol. This policy change is part of the government’s broader strategy to reduce dependence on crude oil imports by boosting domestic ethanol production. As a result, sugar mills now have enhanced opportunities to produce ethanol, which is more profitable compared to traditional sugar production.
Key beneficiaries of this policy shift include companies like Balrampur, Dhampur, Dalmia, Avadh, and Shree Renuka Sugars. These companies saw their stock prices jump by 7 to 9 percent on Friday. For instance, Dhampur Sugar Mills‘ shares rose by 8 percent, Balrampur Sugar Mills hit a new 52-week high with a 7 percent increase, and Shree Renuka Sugars’ shares went up by over 6 percent.
Additionally, the government’s approval to use sugarcane syrup for ethanol production starting from the new season, which runs from November to October, is expected to further boost the profitability of these companies. The industry is also advocating for an increase in ethanol prices, which, if approved, could significantly enhance the earnings of sugar producers.
