Shree Renuka Sugars, Dhampur, Balrampur Chini: What's behind the rally in sugar stocks today 

Shares of sugar-related firms rose in early deals on Monday after the Modi government allowed sugar mills and distilleries to manufacture Rectified Spirit (RS)/Extra Neutral Alcohol (ENA) from sugarcane juice and B-Heavy molasses (BHM).

Stocks of Avadh Sugar and Energy (4.89 percent), Shree Renuka Sugars (4.38%), Dhampur Sugar (5.32 percent), Balrampur Chini Mills (3 percent), EID Parry (3.06 percent), Ugar Sugar (3.65%) and Magadh Sugar and Energy (3 percent ) rose on BSE today.

The decision of Department of Food and Public Distribution (DFPD) is likely to raise the production flexibility of ethanol and other alcohol-based products, supporting the sugar industry’s diversification efforts.

Reacting to the announcement made on September 13, Avadh Sugar and Energy stock climbed 4.89 percent to Rs 773 on NSE today. Market cap of Avadh Sugar climbed to Rs 1521 crore. 

Magadh Sugar and Energy stock climbed 3 percent to Rs 872.45 on BSE. Market cap of Magadh Sugar and Energy climbed to Rs 1224.56 crore. 

Shares of Shree Renuka Sugars rose 4.38% to Rs 48.66 on BSE. Market cap of Shree Renuka Sugars climbed to Rs 10,357 crore. 

Dhampur Sugar stock gained 5.32% to Rs 216 against the previous close of Rs 213.40 on BSE. Market cap of the firm climbed to Rs 1469 crore. 

Balrampur Chini Mills shares gained 3% to Rs 575.85 on BSE. Market cap of Balrampur Chini rose to Rs 11,683 crore. 

On December 15 last year, an order by DFPD to sugar mills/distilleries said that no diversion of sugarcane juice and BHM was allowed for production of RS/ENA.

Recently, the Modi government also allowed sugar mills and distilleries to produce ethanol from sugarcane juice, B-Heavy Molasses, and C-Heavy Molasses during the Ethanol Supply Year (ESY) 2024-25. 

The government has also lifted a previous ban and allowed the sale of up to 23 lakh tonne of rice from Food Corporation of India (FCI) stocks to grain-based ethanol distilleries. The move is likely to raise ethanol production.