Today, we recommend two stocks, one from the sugar sector and another from the chemicals sector, as recommended by the Trade Brains Portal, to buy for an upside potential of more than 33%. India is the world’s 6th largest chemical producer and 3rd largest in Asia, contributing 7% to the nation’s GDP. The chemical sector, valued at approximately US$250 billion in 2024, is expected to grow to US$300 billion by 2025 and reach US$1 trillion by 2040.
At the same time, India’s sugar industry stands as the second-largest producer globally and the largest consumer of sugar, with key production hubs in Maharashtra, Karnataka, and Uttar Pradesh. We also analysed the market’s performance on Wednesday to understand what may lie ahead for the stock indices in the coming days.
1. Dalmia Bharat Sugar & Industries Ltd
- Current price: ₹ 389
- Target price: ₹ 520
- Upside: 33.7%
- Time frame: 12 Months
To view the report for the stock mentioned above or explore other stock recommendations, click here
Why it’s recommended
Dalmia Bharat Sugar & Industries Ltd ventured into the sugar sector in the mid-1990s, setting up its first plant in Ramgarh, Uttar Pradesh, in 1994. Despite being a relatively new entrant, it has emerged as one of India’s largest sugar manufacturers. The company is involved in producing sugar, industrial alcohol, and refractory materials, and also operates in the power generation space. With a total sugarcane crushing capacity of 43,200 TCD, Dalmia ranks among the country’s top sugar producers. It operates as a fully integrated business with 138 MW of cogeneration capacity and 950 KLPD of distillery capacity, supported by incineration boilers.
In FY25, Dalmia reported operating revenue of Rs 3,746 cror e, reflecting a robust 29% year-on-year growth. EBITDA stood at Rs 544 crore, while profit after tax (PAT) was Rs 387 crore. The company achieved record-high domestic sugar sales of 5.9 lakh metric tons (LMT), which helped lower its closing inventory to 3.8 LMT from 4.3 LMT in FY24.
It also recorded its highest-ever average sugar realisation at Rs 38 per kg. The grain-based distillery produced 6.2 crore litres during FY25, marking a 72% increase from the previous year due to expanded capacity. Domestic sugar sales rose by 22%, from 1.1 LMT in Q4 FY24 to 1.4 LMT in Q4 FY25, while exports doubled to 0.1 LMT over the same period.
In Q1 FY26, the company reported revenue from operations of Rs 943 crore, PAT at Rs 38.37 crore, and sugar sales stood at 1.5 LMT. The distillery volume increased by 21% YoY, at 5.2 crore litres. The company delivered an average sugar NSR of Rs 39.8/kg, an increase of 5% YoY. This was mainly driven by higher volumes in grain distilleries and higher sugar NSR.
Going forward, the management expects a promising outlook on the sugarcane industry based on above-normal rainfall with optimal distribution and expects an increase in the minimum selling price (MSP) of sugar will support the industry, and an increase in ethanol prices for the ethanol supply year 2025-26, coupled with a reduction in grain prices, would strengthen the profitability of the distillery segment.
As per ICRA, an above-average monsoon is expected to boost sugarcane cultivation in Maharashtra and Karnataka, leading to improved yields in key sugar-producing states. As a result, sugar production is projected to rise by 15% in the upcoming season. Gross sugar output is estimated to increase to 34 million metric tonnes in the Sugar Year (SY) 2026, up from 29.6 million MT in SY2025.
After accounting for the estimated diversion of 4 million MT for ethanol production, net sugar production is likely to grow to 30 million MT in SY2026 from 26.2 million MT in SY2025. Meanwhile, domestic sugar prices, currently ranging between Rs. 39 and Rs. 41 per kg, are expected to remain steady until the next season begins, supporting the profitability of sugar mills.
India leads global sugar production, with Uttar Pradesh as the top sugarcane-producing state, followed by Maharashtra and Karnataka. The country is also the third-largest sugar exporter globally. According to the USDA, India’s sugar output is expected to reach 35 million metric tons raw value (MMT-RV) in the 2025-26 marketing year, up 26% from the revised current estimate of 28 million tons.
Risk Factors
The sugar industry is cyclical and heavily reliant on favourable weather conditions, agricultural productivity, and cane availability. Erratic monsoons or reduced yields can negatively impact Dalmia’s operations. Furthermore, the industry is subject to stringent regulations under the Sugar (Control) Order, which governs stock limits, transport protocols, and sales restrictions and mandates the government-fixed Fair and Remunerative Price (FRP) for sugarcane. Failure to comply with these regulations could pose operational challenges for the company.
2. Pidilite Industries Ltd
- Current price: ₹ 3,112
- Target price: ₹ 3,650
- Upside: 17.3%
- Time frame: 16-24 Months
To view the report for the stock mentioned above or explore other stock recommendations, click here
Why it’s recommended
Pidilite is one of the leading players in the consumer and speciality chemicals space in India, with a dominant position in the adhesives and sealants market. Its diverse product portfolio spans adhesives, sealants, waterproofing solutions, automotive and construction chemicals, arts and crafts materials, industrial resins, organic pigments, and polymers. As of Q1 FY26, the company operates five R&D centres in India and one in Singapore, managing over 6,100 SKUs and supported by a robust distribution network of more than 5,050 distributors across India. Its well-known brands include Fevicol, M-Seal, Fevi Kwik, Dr. Fixit, and Roff.
Over the past decade, the company has delivered a strong consolidated net sales growth at a CAGR of 11%. Its EBITDA margin has seen a consistent improvement, rising from 16% in FY15 to 23% in FY25. In FY25, net sales stood at Rs 13,094 crore, up 6% from Rs 12,337 crore in FY24. EBITDA grew by 11% year-on-year to Rs 3,013 crore, compared to Rs 2,707 crore in FY24. Profit after tax for FY25 reached Rs 2,096.17 crore, reflecting a 20% increase from Rs 1,747.42 crore in the previous fiscal.
The company maintains a well-diversified portfolio, catering to a broad spectrum of industries, including infrastructure, real estate, packaging, paper, leather, and paints. It is actively exploring high-growth sectors such as electronics, EVs, and semiconductors, having entered into an exclusive partnership with CollTech Group, a specialist in electronics adhesive solutions.
This collaboration is expected to significantly strengthen both companies’ positions in the fast-evolving electronics market. Furthermore, the Roff brand presents strong growth opportunities, backed by the expanding tile market, which was valued at Rs 43,000 crore in FY24 and is projected to grow to Rs 62,000 crore by 2027.
Key growth drivers for the company include increasing penetration in rural and semi-urban areas, along with a strategic focus on international expansion through various business models. From a broader industry perspective, India’s speciality chemicals sector is expected to see robust growth, with its global market share anticipated to rise from 3-4% in 2021 to 6% by 2026. According to a CRISIL report, this growth trajectory could enable India to outpace China in the segment, positioning it as a major player in the global speciality chemicals market.
In Q1 FY26, the company reported a 10.5% year-on-year increase in revenue from operations, rising from Rs 3,395.35 crore in Q1 FY25 to Rs 3,753.1 crore. EBITDA grew by 15.8% YoY, reaching Rs 941 crore for the quarter. Profit before tax rose by 19.1% to Rs 916.47 crore, compared to Rs 769.63 crore in the same period last year. Meanwhile, Profit After Tax saw an 18.7% increase, climbing to Rs 678.13 crore in Q1 FY26 from Rs 571.27 crore in Q1 FY25.
Risk Factor
A significant portion of the company’s raw materials is linked to crude oil, making it vulnerable to price volatility. Essential inputs such as vinyl acetate monomer (VAM), synthetic resins, and other crude oil derivatives are critical to Pidilite’s operations. Additionally, the company faces exposure to geopolitical and economic uncertainties due to its international presence in markets like Bangladesh, Sri Lanka, and several African nations. As a result, heightened geopolitical tensions or fluctuations in input costs could potentially disrupt its supply chain and impact overall operations.
Market Recap September 3rd, 2025
On Wednesday, the Nifty 50 opened at 24,616.50, up 36.90 points from the previous close of 24,579.60. It touched an intraday high of 24,737.05 and ended the session at 24,715.05, registering a gain of 135.45 points or 0.55%. While the index closed below its 20-day and 50-day EMAs, it remained above the 100-day and 200-day EMAs on the daily chart.
The BSE Sensex mirrored this positive momentum, rising 409.83 points or 0.51%. It opened at 80,295.99 and settled at 80,567.71. In terms of technical indicators, the Nifty 50’s Relative Strength Index (RSI) stood at 48.51, and the Sensex RSI was at 46.01, both comfortably below the overbought threshold of 70. The Bank Nifty also posted gains, climbing 406.55 points or 0.76% to close at 54,067.55.
Most sectoral indices ended in the green, with the Nifty Metal Index leading the pack. It surged 292.05 points or 3.11% to close at 9,676.40, driven by strong performances from Tata Steel, Jindal Steel, SAIL, and Hindustan Copper, which rallied up to 5.97%. The Nifty Pharma Index also posted notable gains, closing at 21,959.60, up 239.65 points or 1.10%. Glenmark Pharma led the gains with a 4.46% rise, followed by Lupin (+3.25%) and Ajanta Pharma (+3.1%).
The Nifty Healthcare Index was another top performer, ending at 14,496.65, up 154.35 points or 1.08%. On the flip side, the Nifty IT Index was the biggest drag, falling 262.95 points or 0.74% to 35,474.95, with Infosys down 1.31% and other IT stocks like Coforge, LTIMindtree, and Oracle Financial Services losing up to 1.30%. The Nifty Media Index also slipped marginally by 0.04%, closing at 1,621.95, with losses in Nazara Technologies, Tips Music, Sun TV, and Dish TV of up to 1.98%.
In the broader Asian markets, sentiment was largely negative. Hong Kong’s Hang Seng Index declined 169.55 points or 0.67% to 25,327.00, while the Shanghai Composite fell 44.57 points or 1.17% to close at 3,813.56. Japan’s Nikkei 225 also ended in the red, dropping 380.49 points or 0.91% to 42,930. However, South Korea’s KOSPI bucked the trend, gaining 12.07 points or 0.38% to close at 3,184.42. Meanwhile, U.S. Dow Jones Futures were trading slightly higher at 45,308.56, up 12.75 points or 0.03%, as of 4:50 p.m. IST.
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