Sugar stocks soar as govt clears unrestricted ethanol output for 2025-26

Shares of sugar companies surge up to 20% after the government permitted ethanol production from sugarcane juice, syrup, and all types of molasses without any volume restrictions for the 2025-26 season.

The move is expected to boost revenues for sugar firms with higher ethanol blending capacities, lifting investor sentiment across the sector.

Rajshree Sugars & Chemicals hit the upper circuit with a 20% jump, while Dhampur Sugar Mills climbed 11.55%, Shree Renuka Sugars rose 12.47%, Uttam Sugar Mills gained 10.88%, and Dwarikesh Sugar Industries advanced 10.12%. Avadh Sugar & Energy was up 9.30%, Bajaj Hindusthan Sugar gained 6.79%, Balrampur Chini Mills rose 6.77%, Praj Industries advanced 6.06%, and Triveni Engineering & Industries added 4.57%.

The policy change, announced on 1 September 2025, reverses restrictions imposed during the 2023-24 ethanol supply year, when the government had limited diversion of sugarcane towards ethanol due to lower crop availability. With sufficient monsoon rainfall this year improving prospects for sugarcane output, the fresh decision is expected to significantly benefit sugar companies by allowing higher ethanol production.

The move also aligns with Indias biofuel roadmap. The country is targeting 20% ethanol blending in petrol by 2025.

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