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Shares of sugar companies were in focus with most of the frontline companies trading higher by up to 11 per cent on the BSE in Wednesday’s intra-day trade on positive outlook.
Triveni Engineering & Industries, Dhampur Sugar Mills, Balrampur Chini Mills, Dwarikesh Sugar Industries, Uttam Sugar Mills, EID Parry and Avadh Sugar & Energy were up between 3 per cent and 11 per cent on the BSE. In comparison, the S&P BSE Sensex was up 0.32 per cent at 58,850 at 10:44 am.
Among the individual stocks, Triveni Engineering & Industries surged 11 per cent to Rs 224, hitting a new high on the BSE. In past two trading days, the stock has rallied 19 per cent after the company signed a 10-year business agreement with GEAE Technology USA to locally manufacture the LM2500 gas turbine base and enclosure.
Under the agreement, GEAE Technology USA has licensed Triveni to locally manufacture the LM2500 gas turbine's base frame, acoustic enclosure, and lubricating oil skid and supply other source-controlled accessories that go into the LM 2500 gas turbine enclosure assembly, the company said in a release.
Meanwhile, sugar industry is well poised to benefit from domestic and global factors. Tight global demand-supply situation, favourable government policies and continuous push for higher blending will keep the inventory levels under control and sugar prices firm.
Propelled by tailwinds like favourable policy push with government further raising the ethanol prices post revision of fair and remunerative price (FRP) from Rs 285 to Rs 290 / quintal of sugarcane for the sugar season (SS) 2021-22, Indian sugar companies are poised to see healthy growth in distillery businesses.
Government’s move to increase the ethanol prices year on year supports the framework of enhanced blending. In the SS 2021-22, diversion of 3.5 million tonnes (MT) of sugar for production of ethanol using B heavy molasses / juice / syrup is expected.
The surplus sugar situation bodes well for the ethanol industry and with the government’s support in the form of various policy reforms, it is likely that 10 per cent ethanol blending will be achieved by 2022 as envisaged in the ethanol blending program (EBP), CARE Ratings said in sugar sector update.
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