The federal government’s notification removes the restrict that exists on the diversion of sugar for ethanol manufacturing. “Since ethanol is a high-yielding product, this removing of cap would assist the sugar mills and distilleries to fabricate extra ethanol and enhance their income combine straight, which can enhance money flows and stabilize the sugar business,” stated T Manish, analysis analyst, Samco Securities.
In an try to realize the goal of E20 (20% ethanol mixing into petrol) by 2025, the federal government has eliminated the cap on ethanol manufacturing. Manish stated that as of 2022-23, the share of ethanol blended in petrol stood at 12.01%.
“Earlier the sector was not underneath limelight however now issues are beginning to get higher and we’re seeing a gradual restoration in sugar shares,” stated Dharmesh Shah, head of technical analysis at ICICI Direct.
Shah’s prime picks on this sector are Balrampur Chini Mills and Dalmia Bharat Sugar.Many sugar shares like EID Parry, Balrampur Chini Mills, Triveni Engineering and DCM Shriram have surged between 31% and 49% in 2024 to date, outperforming the benchmark BSE SmallCap and BSE 500 which have gained 31.3% and 21.9% this yr respectively.”Sugar costs have been hovering at 12-month excessive ranges main the businesses to maintain their ranges earlier than this cover was eliminated,” stated Sandip Sabharwal, founder, asksandipsabharwal.com, an funding advisory. “Because the announcement has come a month prematurely to the beginning of the sugar season, corporations can plan properly prematurely to use for tenders and plan ethanol provides, which can result in improved money flows.”