Multibagger stock: Shree Renuka Sugars surges 60% in 1 month, more than 500% in 1 year—2 factors that changed fortune of sugar sector

Shares of Shree Renuka Sugars surged nearly 15% in intraday trade to hit a fresh 52-week high of Rs 63.20 per share on the BSE on Friday. This multibagger sugar stock has gained more than 60% in a month, over 80% in three months and nearly 115% in six months, showed technical data of the scrip. Besides, the share jumped more than 500% in just one year and gave over 1000% return in two years.  

Brokerage firms and analysts have been bullish on this sector lately, and believe the government's ambitious ethanol blending programme will continue to aid this sector.  

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Speaking of the unprecedented jump in Shree Renuka Sugars price, Santosh Meena, Head of Research, Swastika Investmart Ltd, said the monumental rise in this sugar counter this week may be speculative in nature. "There is no specific news in Shri Renuka Sugar Ltd. and the company hasn’t announced anything on the stock exchanges. There is a possibility that the monumental rise this week is speculative in nature," the expert said.  

Speaking of sugar sector in general, the analyst said sugar stocks are trending due to the ethanol blending policy of the government.  

"Rising crude oil prices and other commodity prices have compelled the government to raise ethanol blending target from the existing 7% to 8% to 20%. There is a supply dearth of ethanol in India currently. Thus, creating a great opportunity for sugar companies. These two factors have changed the fortunes of Sugar companies," Meena said.  

About which sugar stocks should be investors radar, he suggested that investors should stay put in sugar sector’s quality names like Balrampur Chini Mills Ltd, Triveni Engineering and Industries Ltd, Dhampur Sugar Mills Ltd.