Shree Renuka, Balrampur Chini And Sugar Stocks Rally In Trade — Here's Why

While SEBI's consultation paper on mutual funds has put pressure on capital market stocks, sugar stocks are having a much better day, with the likes of Balrampur Chini Mills, Dwarikesh Sugar Industries and Shree Renuka Sugars trading with gains on Wednesday's trade.

EID Parry, the biggest sugar stock by market capitalisation, is trading with gains of more than 2%, mirroring gains made by other sugar stocks such as Balrampur Chini, Triveni Engineering and Shree Renuka Sugars.

The rally is sugar companies is primarily led by news reports of the government considering allowing sugar exports in the 2025-26 marketing year, as surplus stocks accumulate due to lower-than-expected diversion of the sweetener for ethanol production.

The country's sugar mills diverted only 3.4 million tonnes of sugar for ethanol manufacturing in 2024-25, well below the projected 4.5 million tonnes, Union Food Secretary Sanjeev Chopra told PTI in an interview.

This has resulted in high opening stocks for the current 2025-26 marketing year that runs from October to September, he said.

India exported about 8,00,000 tonnes of sugar against an allocation of 1 million tonnes during the 2024-25 marketing year.

Regarding diversion of sugar for ethanol, Chopra questioned the industry's demand for higher quantities when mills failed to utilise the allocated 4.5 million tonnes in the previous season, despite the removal of all restrictions.

Nevertheless, the Secretary said the matter pertains to the Ministry of Petroleum and Natural Gas, which could be considering their demand.

This is a major positive for sugar companies, as it frees up their warehouses, reducing storage costs and the risk of spoilage. It also unlocks a revenue stream, thereby boosting cash flows.

Therefore, all major sugar stocks have gained in trade on Wednesday, including the big players like Shree Renuka and EID Parry.