Sugar stocks surged in the early hours of Tuesday after reports surfaced that the companies are likely to see a fall in production in the coming months. The marketing year for sugar companies is from October to September of the year.
The reports suggest that sugar production is likely to see a drop of as much as 7 percent in the current marketing year. This is due to a decline in cane production in Maharashtra, the largest sugar producer in the country, due to adverse weather conditions.
As India is the second latest producer of Sugar in the world, the drop in production is likely to affect the exports which will ultimately reflect in global prices. On the news here are some Sugar stocks that have shot up and reached their 52-week high:
Ponni Sugars (Erode) Limited
The shares of this sugar company opened at Rs 336 on Tuesday and gained as much as 13 percent to reach a new 52-week high of Rs 384.30 in the early hours. In the span of a month, the stock has risen by 31 percent and on a Year to Date (YTD) basis the stock has gained 71 percent.
Ponni Sugars (Erode) Limited is a sugar manufacturing company that is an associate of Seshasayee Paper and Boards Limited. It became the first sugar mill in the country to use alternative fuel in its boilers and release its bagasse in its entirety for paper making. It has a market capitalization of Rs 321 crore and a dividend yield of 1.47%.
Ugar Sugar Works Limited
The shares of the company jumped more than 6 percent in the early hours on Tuesday to reach its new 52-week high of Rs 99.10. In a month, the stock has jumped by 19 percent. On a year-to-date basis, it has delivered a multibagger return of 216 percent.
Ugar Sugar Works Ltd is the flagship organisation of the Shirgaokar Group of Companies. The sugar manufacturing company is engaged in producing White Crystal Sugar. It also manufactures Bagasse, Filter Cake, and Final Molasses. It has a market capitalization of Rs 1,080 crore and a dividend yield of 0.26%
Apart from these stocks, other sugar stocks have also risen on the news. The shares of Bajaj Hindusthan Sugar Ltd were trading 7 percent higher at Rs 17.25 levels while Shree Renuka Sugars Ltd also rose by 4 percent to trade at Rs 61 levels.
Written by Anoushka Roy
