As soon as the news reports emerged that the Indian government is considering raising the Minimum Sale Price (MSP) for the 2024-25 sugar season, sugar stocks started trading higher on Thursday.
Over the past month, sugar stocks have experienced a significant rise by 10-20 percent, whereas on 13th July, sugar stocks rallied up to 13 percent, driven by expectations of a hike in the MSP.
Presently, the MSP remains unchanged at Rs. 31 per kg since 2019, while the industry advocating for an increase to Rs. 41 per kg.
While the government announced fair cane prices in February, officials clarified that any increase in the Minimum Sale Price (MSP) will only be implemented starting the upcoming sugar season on October 1.
The sugar industry remains hopeful that the government will align the sugar MSP with the rise in cane Fair and Remunerative Price (FRP). This adjustment is expected to improve the sugar industry’s liquidity and enable timely payments to cane farmers.
On Thursday, shares of the following sugar stocks experienced significant gains, with some stocks surging up to 15 percent.
Shree Renuka Sugars Limited
Share price of one of India’s largest sugar and green energy (ethanol and renewable power) producer and a subsidiary of Wilmar Sugar and Energy Pte Ltd, Singapore, surged 13.2 percent on BSE to hit an intraday high at Rs. 49.95 on Thursday, compared to its previous closing price of Rs. 44.14.
With a market cap of Rs. 10,491.3 crore, the stock closed in the green at Rs. 49.29, up by nearly 11.7 percent.
On a year-on-year basis, the company’s revenue from operations stood at Rs. 3,466.3 crore in Q4 FY23-24, increasing by 48.8 percent from Rs. 2,328.5 crore in Q4 FY22-23.
The after-tax profit fell from a profit of Rs. 44.6 crore in Q4 FY22-23 to a loss of Rs. 111 crore in Q4 FY23-24.
Mawana Sugars Limited
With a market cap of Rs. 472.3 crore, the stock closed in the green at Rs. 120.75, up by 11.65 percent. Share price of Mawana Sugars surged 15.07 percent on BSE to hit a new 52-week high at Rs. 124.45 on Thursday, compared to its previous closing price of Rs. 108.15.
On a year-on-year basis, the company’s revenue from operations stood at Rs. 322.2 crore in Q4 FY23-24, declining by 8.02 percent from Rs. 350.33 crore in Q4 FY22-23.
The after-tax profit fell from Rs. 52.14 crore in Q4 FY22-23 to Rs. 47.08 crore in Q4 FY23-24, indicating a fall of 9.7 percent YoY.
KM Sugar Mills Limited
With a market cap of Rs. 413.4 crore, the stock closed in the green at Rs. 44.93, up by 8.3 percent. Share price of KM Sugar Mills surged 12.7 percent on BSE to hit a new 52-week high at Rs. 46.79 on Thursday, compared to its previous closing price of Rs. 41.5.
On a year-on-year basis, the company’s revenue from operations stood at Rs. 122.93 crore in Q4 FY23-24, increasing by 35.7 percent from Rs. 90.6 crore in Q4 FY22-23.
The after-tax profit grew from Rs. 0.64 crore in Q4 FY22-23 to Rs. 7.66 crore in Q4 FY23-24, indicating a growth of 1,096.8 percent YoY.
Bannari Amman Sugars Limited
With a market cap of Rs. 3,473.5 crore, the stock closed in the green at Rs. 2,770, up by nearly 7.5 percent. Share price of Bannari Amman Sugars surged 8.5 percent on BSE to hit an intraday high at Rs. 2,795.85 on Thursday, compared to its previous closing price of Rs. 2,577.5.
On a year-on-year basis, the company’s revenue from operations stood at Rs. 421.2 crore in Q4 FY23-24, declining by 35.8 percent from Rs. 656.44 crore in Q4 FY22-23.
The after-tax profit fell from Rs. 49.92 crore in Q4 FY22-23 to Rs. 21.83 crore in Q4 FY23-24, indicating a growth of 56.3 percent YoY.
Apart from the aforementioned stocks, there are a few other sugar stocks that have witnessed a rally in their share prices including Avadh Sugar & Energy by 9.4%, Balrampur Chini Mills by 5.1%, Simbhaoli Sugars by 12.8%, Magadh Sugar & Energy by 9%, Triveni Engineering and Industries by 7%, Dalmia Bharat Sugar and Industries by 9%, and Andhra Sugars Limited by 13%.
Written by Shivani Singh
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
