Market Performance
The sugar sector lit up the stock market today with sharp gains across leading players. On September 2, shares of top sugar manufacturers rallied as much as 12% after the government lifted restrictions on ethanol production for the 2025–26 supply year.
Investors tracked strong momentum across the pack:
- Balrampur Chini Mills surged 7%, trading near ₹580.
- Shree Renuka Sugars jumped 12% to ₹32.28.
- Bajaj Hindusthan Sugar and Godavari Biorefineries rose up to 8%.
- Uttam Sugar Mills spiked 12%.
- Dhampur Sugar Mills and Magadh Sugar & Energy advanced close to 10%.
- Triveni Engineering gained 4.5%.
- Dwarikesh Sugar and peers climbed nearly 4%.
The rally reflected renewed optimism in sugar-linked counters after weeks of muted trade.
Main News: Govt Removes Cap on Ethanol Output
From November 1, the Ministry of Consumer Affairs, Food & Public Distribution has allowed sugar mills and distilleries to produce ethanol freely, with no cap on output from sugarcane juice, syrup, or molasses:
- Sugarcane juice
- Sugar syrup
- All types of molasses
This marks a reversal of the earlier cap imposed for the ongoing supply year when limited sugarcane availability forced the government to restrict ethanol output.
The Department of Food and Public Distribution (DFPD) will continue to review sugar diversion to ethanol to ensure steady domestic sugar supply throughout the year.
The policy shift comes on the back of strong monsoon rains over the past two years, which have boosted sugarcane cultivation and ensured robust supply for the new season.
Company-Wise Impact
The announcement immediately reflected in stock movements across the sector:
- Balrampur Chini Mills: Rose over 7%, hitting ₹580, among the top gainers in the segment.
- Shree Renuka Sugars: Jumped more than 12%, scaling to ₹32.28 on heavy volumes.
- Bajaj Hindusthan Sugar & Godavari Biorefineries: Posted gains of up to 8% each.
- Uttam Sugar Mills: Led the rally with a 12% surge.
- Dhampur Sugar Mills & Magadh Sugar & Energy: Both traded nearly 10% higher.
- Triveni Engineering: Added 4.5%.
- Dwarikesh Sugar: Advanced close to 4%, keeping pace with the broader sector rally.
The surge was sector-wide, showing investor confidence in ethanol-linked policy support.
Legal Update: Supreme Court on Ethanol Blending
Adding another dimension to the story, the Supreme Court yesterday dismissed a petition challenging the nationwide rollout of 20% Ethanol Blended Petrol (EBP-20).
The petitioner argued that many vehicles, even those as recent as two years old, are not compatible with 20% ethanol-blended fuel despite being BS-VI compliant.
The bench led by Chief Justice BR Gavai, alongside Justice K Vinod Chandran, dismissed the plea. Attorney General R Venkataramani countered that the matter had already been reviewed thoroughly before the policy rollout. He also emphasized that the ethanol policy:
- Supports sugarcane farmers
- Helps reduce foreign exchange outflow
- Strengthens India’s energy independence
Summary
Sugar stocks had their moment in the spotlight today as the government’s ethanol policy change boosted investor sentiment across the sector. With restrictions lifted from November 1, sugar companies gain more flexibility to produce ethanol from cane juice, syrup, and molasses.
Stocks like Balrampur Chini Mills, Shree Renuka Sugars, Bajaj Hindusthan Sugar, Godavari Biorefineries, Dhampur Sugar Mills, Magadh Sugar & Energy, Triveni Engineering, and Dwarikesh Sugar saw strong buying interest, marking a sharp turnaround for the industry.
The combination of policy support, strong monsoon-driven cane supply, and Supreme Court backing for ethanol blending has set the stage for the sector to remain in focus in the coming sessions.
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