Sugar Stocks Surge Up to 10%, with Balrampur, Dhamapur, Bajaj Hindustan Among Gainers. Production Decline Fuels Price Hike Expectations, Ethanol Business Boosts Profitability.
Sugar Stocks: A significant surge was observed in the shares of sugar companies during the initial trading hours on Wednesday, March 19, 2025. Many stocks climbed by up to 10%, yielding substantial profits for investors. This positive trend followed a similar upward movement on Tuesday.
Which Sugar Stocks Showed the Biggest Gains?
Balrampur Chini Mills' shares increased by 9%, reaching an intra-day high of ₹549. Dhamapur Sugar Mills, Bajaj Hindustan, and Shri Renuka Sugars also witnessed gains of up to 5%. Furthermore, shares of companies like Magadh Sugar, Avadh Sugar, Rajshri Sugars, Dalmia Bharat Sugar, Uttam Sugar, and Andhra Sugars rose by 2% to 7%.
Reasons Behind the Sugar Stock Surge?
Market activity is driven by the anticipated decline in sugar production. A significant reduction in output is expected in Maharashtra, Karnataka, and Uttar Pradesh. Reports indicate that India's sugar production for this season has fallen by 16.13% to 23.7 million tonnes. The National Federation of Cooperative Sugar Factories (NFCSF) estimates a total production decrease from 31.9 million tonnes to 25.9 million tonnes in 2024-25. The Indian Sugar Mills Association (ISMA)'s initial estimates also point towards a decline.
Will Sugar Prices Rise Further?
The decrease in sugar production is likely to cause a price surge. Sugar prices in major states have already increased by 7-9% in the March quarter. Industry experts believe prices may rise further in the coming days, boosting the profits of sugar mills.
Is Investing in Sugar Stocks Beneficial?
According to market analysts, sugar mills are focusing on ethanol production, which will strengthen their profitability. These stocks could prove attractive for long-term investors; however, a well-defined investment strategy considering market fluctuations is crucial.
