Budget 2022: Sugar stocks surge as FM announces extra excise duty on unblended fuel - Kesar Enterprise, KCP Sugar stocks in focus

As the finance minister Nirmala Sitharaman proposed to levy additional excise duty of Rs 2 per litre on unblended fuel, the sugar stocks in Tuesday’s session surged up to 7 per cent on the BSE intraday. 

The finance minister had announced this while presenting the Union Budget 2022-23 in the Parliament today. The tax shall be applicable from October 1, 2022. 

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The government has taken an initiative to reduce the overall oil import by blending ethanol in the fuel. In this regard, ICICI Direct analysts believe that this mover likely to encourage ethanol blending of fuel and may have direct positive impact on the sugar companies.  

Ethanol is a byproduct of sugar manufacturing, and the government has planned to blend as much as 20 per cent ethanol in fuel by 2025. 

The sugar stocks are already in focus since the announcement of this blending programme, on top of that this announcement has aided more to the sugar stocks to surge. Of all, DCM Shriram Industries gained most by 6.77 per cent, followed by SBEC Sugar up nearly 4 per cent. 

While Kesar Enterprise, KCP Sugar & Industries, Rajshree Sugars & Chemicals each gained over 1 per cent each, followed by Shree Renuka Sugars up nearly 1 per cent. Piccadily Agro Industries, Bannari Amman Sugars, Vishwaraj Sugar Industries and Ugar Sugar Works were among the top gainers. 

On the contrary, Dharani Sugars & Chemicals slipped almost 3 per cent, followed by Dhampure Specialty Sugars down almost 2.5 per cent, Riga Sugar Company, Triveni Engineering & Industries, Dalmia Bharat Sugar & Industries and Sakthi Sugars each down between 1-2 per cent on the exchanges.