Why Sugar Stocks Like Dhampur, Balrampur Chini, and Shree Renuka Are Surging Today?

Today, sugar stocks are drawing significant attention from investors in the Indian stock market. Major sugar companies like Dhampur Sugar, Balrampur Chini, Shree Renuka Sugars, Dalmia Bharat, and Triveni Engineering experienced a notable surge, with some shares rising by up to 8% in intraday trading.

Dhampur Sugar shares opened with an upside gap at ₹220 on the NSE, quickly reaching an intraday high of ₹229, reflecting an 8% increase. Similarly, Balrampur Chini's share price climbed to ₹625 per share after a gap-up opening, marking an approximate 8% rise. Other stocks, including Shree Renuka Sugars and Dalmia Bharat, also saw significant buying activity in early morning trades.

What’s Driving the Surge in Sugar Stocks?

The surge in sugar stocks is linked to a recent policy change by the Government of India (GoI), which has removed the cap on sugar diversion for ethanol production for the 2024-25 season. This change enables sugar mills to produce ethanol from sugarcane juice and B-Heavy molasses, offering them enhanced operational flexibility and increased potential for profitability.

According to Seema Srivastava, Senior Equity Research Analyst at SMC Global Securities, "Investors are bullish on sugar stocks due to the GoI's decision to lift the cap on ethanol production from sugar for FY25. The government aims to increase the ethanol blending rate in petrol and diesel to 15% by the end of 2025, and further to 25% by 2030. This decision has opened new revenue streams for sugar manufacturing companies."

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Opportunities for Investors: Which Sugar Stocks to Buy?

Given the new opportunities arising from this policy shift, analysts are recommending certain sugar stocks to investors. Seema Srivastava suggests focusing on stocks with strong fundamentals and larger market presence, such as Dhampur Sugar and Balrampur Chini, for medium to long-term investment.

Adding to this, Shiju Vasu Koothupalakkal, Senior Manager of Technical Research at Prabhudas Lilladher, emphasized that Dhampur Sugar shares are currently better positioned for an upward move on the technical charts. "Dhampur Sugar is on the verge of a breakout at ₹230 per share, with potential targets of ₹250 and ₹280 in the near future," he explained.

Conclusion:

The recent developments in the Indian sugar sector, particularly the government's decision on ethanol production, have created a positive environment for sugar stocks. Investors are advised to keep an eye on Dhampur Sugar and Balrampur Chini as potential picks to benefit from this trend.

[Disclaimer: The information provided in this article is for informational purposes only and should not be considered financial or investment advice. Please conduct your own research or consult a financial advisor before making any investment decisions. The content reflects news and market trends at the time of writing and may be subject to change.]