Dwarikesh Sugar Why Shares Are Up Today

On Monday, September 16, 2024, sugar stocks surged in the market, with some companies witnessing gains of up to 4 percent during intraday trading. Leading players in the sector, including Shree Renuka Sugars, Dhampur Sugars, and Balrampur Chini Mills, were among the top performers. The rise in sugar stocks followed the government’s decision to allow sugar mills and distilleries to produce rectified and extra-neutral alcohol from sugarcane juice and B-heavy molasses. This motion is anticipated to provide greater flexibility in the production of ethanol and other alcohol-based products, supporting the industry’s diversification strategies. Bajaj Hindusthan Sugars stock rose by 3.59%, while Dwarikesh Sugar Industries saw a 3.83% increase. Shree Renuka Sugars climbed by 3.38%, and Balrampur Chini Mills gained 2.87%. Other principal gainers included Triveni Engineering and Industries, which increased by 2.97%, and EID Parry, which rose by 1.99%. Besides that, last month the condition /approval to use club juice or syrup for ethanol production starting from November 1, 2024. This policy modification comes after the composition of restrictions in December 2023, which aimed to increase sugar production due to the impact of a poor monsoon season on cane cultivation.   to the new regulations, the use of B- heavy molasses for ethanol production has also been approved. Currently, approximately 750,000 metric tons of B-heavy molasses are in commodities, which was previously restricted for ethanol production. DAM Capital analysts, in their August 29 report, noted that the normalisation of ethanol volumes for sugar companies had already been factored into their forecasts. However, they anticipate increased clarity in ethanol blending and FY 25, onwards, leading to a sector re-rating. As a result, they have revised the earnings multiples for companies under their coverage.