Sugar stocks extend rally; Balrampur, Triveni, EID Parry hit record highs

Triveni Engineering hit a record high of Rs 198 as the scrip rallied 18 per cent today, taking its gains to 31 per cent in the past two trading days

Shares of sugar companies rallied for the second day in a row, with Balrampur Chini Mills, EID Parry and Triveni Engineering & Industries hitting their respective all-time highs on the BSE in intra-day trade on Tuesday on a strong outlook.

Triveni Engineering hit a record high of Rs 198 as the scrip rallied 18 per cent today, up 31 per cent in the past two trading days. The stock surpassed its previous high of Rs 196 touched in December 2007. Balrampur Chini Mills soared 6 per cent to Rs 357, gaining 13 per cent in two days, while EID Parry (India) was up 5 per cent at Rs 463, adding 10 per cent in the last two sessions. Both these stocks surpassed their previous highs recorded in May 2021.

Shree Renuka Sugars, Magadh Sugar & Energy, Dwarikesh Sugar Industries, Dhampur Sugar Mills and Dalmia Bharat Sugar and Industries were up between 5 per cent and 10 per cent on the BSE.

On World Environment Day (June 5), Prime Minister Narendra Modi announced that the target of 20 per cent ethanol-blended petrol has been advanced by five years to 2025 to cut pollution and reduce import dependence. Ethanol extracted from sugarcane as well as damaged food grains such as wheat and broken rice and agriculture waste is less polluting and its use also provides farmers with an alternate source of income.

“Sugar industry is well poised to benefit both from global and domestic factors. A tight global demand-supply situation, favourable government policies and push for higher ethanol blending in India will keep the inventory under control. In light of the above, the short to the medium-term outlook of the industry remains promising,” Dalmia Bharat Sugar said on the outlook of the sugar industry.

“Balrampur Chini Mills is the most efficient sugar company with sustainable earnings and strong cash flow generation. We believe the company would increase shareholder’s payout (buybacks, dividend) to around 60 per cent from the current 40 per cent payout. We believe the market recognises the big opportunity in ethanol blending programme and the stock is poised to command better valuation multiples,” ICICI Securities said in a Q4FY21 result update.