Shares of sugar companies were on the swing as front-line shares traded up as much as 10 per cent on the Bahrain Stock Exchange in trading on Wednesday in an otherwise weak market. Frontline stocks such as Dwarikesh Sugar, Dalmia Bharat Sugar and Industries and Triveni Engineering are up 5 percent to 10 percent. Among other things in the pack, Magadh Sugar & Energy, Rana Sugar, Uttam Sugar Mills, KM Sugar, Andhra Sugar, Mawana Sugar and Shree Renuka Sugar are up 10 percent to 15 percent over BSE. By comparison, the S&P BSE Sensex was down 0.88 percent at 59,644 points at 11:35 a.m.
According to a report by ISMA, India’s sugar exports are likely to reach 8.5 million tons in the current marketing year 2021-22 ending in September. “Sugar production reached 30.98 million tons until March of the current marketing year 2021-22, an increase of 27.87 million tons over the same period last year,” the report added. Click here for the full report
Meanwhile, the government extended the loan disbursement schedule for ethanol projects under various schemes until September 30 this year, to boost domestic production and achieve 20 percent ethanol blending by 2025. The move aims to facilitate entities to complete their projects and benefit from subsidy benefits Benefit. click here
On the other hand, Triveni Engineering has announced that the company’s new 160 KLPD distillery at its sugar unit at Milak Narayanpur in Uttar Pradesh (which has the flexibility to work with various feedstocks such as molasses/sugarcane juice and syrup/grain) has started operations. trading as of Monday, April 4, 2022. The stock rose 6 per cent to Rs 342.70 on the Bahrain Stock Exchange in trading during the day. Earlier, it had set a record high of Rs 358.90 on March 15, 2022.
“With an adequate blend of ethanol toward heavy A/B (feedstock) coupled with a higher sugar intake, operating margins for the sugar companies are expected to improve,” equity and equity brokerage Systematix said in a February report. The report also indicated that ethanol demand is likely to grow 15 percent during the 22-30E fiscal year, driven by the government’s mandate of 20 percent blending ethanol into gasoline.
“Increasing conversion of sugarcane towards ethanol will solve the problem of excess sugar stocks and reduce business volatility. Improved profitability and lower working capital will ensure superior cash flows, which together with improvement in RoE/RoCE will lead to reclassification of the sector,” the report added.