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Most sugar shares rose on Tuesday (January 16) after the Centre introduced the imposition of a 50 per cent export obligation on molasses, with impact from January 18. Whereas shares comparable to Shree Renuka Sugars, Balrampur Chini, EID Parry, Magadh Sugar, Mawana Sugards, Avadh Sugar, Rajshree Sugars traded as much as two per cent larger in morning offers, counters comparable to DCM Shriram and Bannari Aman declined as much as 1.5 per cent.
The measure has been taken to make sure the market forces of demand and provide within the commodity.
Analysts say the motion by the federal government is probably going to make sure higher availability of molasses for home firms.
Zee Enterprise had reported, citing sources, on December 29 that the federal government was mulling the imposition of an export obligation to the tune of 40-60 per cent on molasses.
What analysts say about sugar shares?
Home brokerage JM Monetary stays bullish on Balrampur Chini Mill with a goal worth of Rs 500 per share.
Whereas the federal government stays dedicated to its goal of 20 per cent ethanol blended petrol (EBP) by 2025, it believes that is more likely to be deferred by 1-2 years given doubtless low sugar manufacturing as a result of weak monsoon, wrote analysts on the brokerage in a report dated January 15.
“We consider rise in a) C-Heavy ethanol costs and b) sugar realisation and volumes will partially offset decrease ethanol volumes. Sugar manufacturing in India until thirty first Dec’23 confirmed an 8 per cent decline to 11.2mn tonnes (mnt) led by Maharashtra and Karnataka, partially offset by Uttar Pradesh. We estimate sugar manufacturing of 30.5-31.5mnt within the present season,” they added.
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