Sugar stocks surge after hike in MSP; operating margins may jump 3-4%

Domestic sugar stocks rallied on Tuesday in the anticipation of improved margins and easing arrears positions after the Union government announced a Rs 2 per kg, or seven per cent, increase in the minimum selling price (MSP) of sugar, last week.

According to Crisil, the MSP hike may add 3-4 percentage point to companies’ operating margins. 

Even sugar price in Mumbai wholesale market jumped to Rs. 3,229 per quintal and was quoted at 4 per cent premium to MSP. Such high price was seen for the first time since MSP was announced in last June.

Trade sources said that the