Synopsis: Sugar stocks such as Balrampur Chini Mills Ltd, Triveni Engineering and Industries Ltd, and Dhampur Sugar Mills Ltd gained up to 5% as sentiment turned positive on rising ethanol blending ambitions.
Sugar stocks gained up to 5% after the government signalled plans to move toward 100% ethanol blending. Higher ethanol demand is expected to boost revenues, improve margins, and strengthen long-term growth prospects for the sector.
The push toward 100% ethanol blending is expected to significantly boost demand for ethanol, a key byproduct of sugar production. This creates a strong additional revenue stream beyond traditional sugar sales, improving profitability and reducing reliance on cyclical sugar prices.
Moreover, increased policy support for ethanol and alternative fuels strengthens long-term growth visibility for the sector. As India moves toward energy self-reliance, these companies are likely to benefit from higher production volumes, better capacity utilisation, and improved margins driven by rising ethanol demand.
Stock movements
With a market capitalisation of Rs. 10,501 cr, the shares of Balrampur Chini Mills Ltd were trading at Rs. 520, jumping 2.5% in today’s market session, making a high of Rs. 522, up from its previous close of Rs. 509.45 per share.
With a market capitalisation of Rs. 8,934 cr, the shares of Triveni Engineering and Industries Ltd were trading at Rs. 408.15, jumping 4% in today’s market session, making a high of Rs. 412, up from its previous close of Rs. 395.05 per share.
With a market capitalisation of Rs. 947 cr, the shares of Dhampur Sugar Mills Ltd were trading at Rs. 147.35, surging 5% in today’s market session, making a high of Rs. 149.70, up from its previous close of Rs. 142.55 per share.
With a market capitalisation of Rs. 4,508 cr, the shares of Bajaj Hindusthan Sugar Ltd were trading at Rs. 18.86, jumping 2.5% in today’s market session, making a high of Rs. 19.08, up from its previous close of Rs. 18.61 per share.
What’s the News
Union Minister Nitin Gadkari has stated that India should aspire to reach 100% ethanol blending to secure its energy future. The call for total ethanol blending is driven by the need for India to become self-reliant. Currently, the country imports 87% of its oil requirements, costing approximately Rs. 22 lakh crore. Gadkari noted that the energy crisis fueled by the ongoing war in West Asia has made it essential for India to pivot toward domestic alternatives to ensure national security and reduce pollution.
India has already made progress with the 2023 launch of E20 petrol (20% ethanol blend). While most Indian vehicles can run on E20 with minor engine modifications to prevent corrosion, Gadkari pointed to Brazil as the global standard, where 100% ethanol blending is already operational. He also dismissed social media concerns about E20, attributing them to lobbying from the petroleum sector.
Beyond Ethanol: Green Hydrogen and Circular Economy
The Minister identified green hydrogen as the “fuel of the future,” emphasising the need to produce it from waste. To make India a global energy exporter, he stated that the production cost must be reduced to $1 per kilogram. He further argued that focusing on a circular economy would not only help the environment but also create significant employment opportunities.
Regulatory and Industry Shifts
Gadkari highlighted that the Corporate Average Fuel Efficiency (CAFE) III standards, set to take effect on April 1, 2025, will have a minimal impact on electric and flex-fuel vehicles. He encouraged the automobile industry to move away from petrol and diesel by focusing on quality over cost, which he believes will help Indian manufacturers penetrate international markets.
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