These days the shares of sugar companies are giving great returns to their investors. Shares of Dwarikesh Sugar are up more than 6 per cent today (Wednesday) and the company’s shares have given returns of close to 45 per cent in the last one month. At the same time, the shares of Ugar Sugar Works have gained about 4 per cent on Wednesday and in the last one month, the shares of the sugar company have gained about 70 per cent. Shares of Dhampur Sugar Mills have gained about 39 per cent in the last one month. On the other hand, shares of Triveni Engineering and Dalmia Bharat Sugar & Industries have gained 23 per cent and 27 per cent respectively in the last one month.
Sugar stocks are rising due to these 2 reasons
According to stock market experts, due to rising commodity prices and the government’s ethanol blending policy, there is a sharp jump in sugar stocks. He says that due to rising prices of crude oil and other commodities, the government is focusing on increasing ethanol blending in diesel and petrol. The current ethanol blending in diesel and petrol is 7-8 per cent, which is expected to be increased to around 20 per cent. However, the domestic supply of ethanol will not be able to meet this demand. In such a situation, the ethanol blending business of sugar mills is increasing these days.
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Very Bullish on Dalal Street Sugar Stocks
Apart from this, rising commodity prices have also led to a jump in sugar prices. In such a situation, sugar companies are getting double benefit of the existing market structure. Saurabh Jain, Vice President (Research), SMC Global Securities, says, “To deal with the rising crude oil prices, the central government has announced an ethanol blending policy. This has created an additional source of revenue for the sugar companies. Sugar prices are also on the rise amid rising commodity prices and are expected to remain bullish in the near future. Hence Dalal Street is quite bullish on Sugar Stocks. These two factors are leading to the rise in sugar stocks.
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Big profit for companies producing more ethanol
Avinash Gorakshakar, Head of Research at Profitmart Securities, says that to deal with dollar outflow from India, the central government has announced an ethanol blending policy to increase the use of ethanol in petrol and diesel from the current 7-8 per cent to 20 per cent. Has a plan. However, there is a shortage of supply of ethanol. In such a situation, sugar companies capable of producing ethanol in large quantities will benefit greatly from this recent move of the government.