Sugar stocks gain on rise in export demand; Mawana sugars, Ugar sugars and Dwarikesh sugar gain over 200% in one year

Sugar stocks were trading higher on Friday after India's sugar exports rose on global price rally and weak rupee. Indian sugar mills signed contracts to export 550,000 tonnes of the sweetener in recent days, as surging global prices and a weak rupee made overseas sales lucrative, as per Reuters. 

Ugar Sugar works jumped nearly 7% to trade on its 52-week high value that it hit on Thursday.  

Similarly, Dhampur Sugar mills jumped nearly 2% to hit day's high of Rs 431.30, while Dwarikesh sugar gained 3% to trade on Rs 125, Balrampur Chini rose 1.5% to trade on Rs 459, Mawana Sugar traded marginally higher at Rs 143.85 and Dalmia Bharat gained more than 1% to Rs 448 per share on the BSE.  

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Multibagger sugar stocks 

Of all the sugar stocks, Mawana sugars and Ugar sugars and Dwarikesh sugar have gained significantly in the past one month. Shares of Mawana sugars gained 28% in a week and 45% in a month as on March 11. The stock has given over 200% return in the last one year.  

Similarly, Ugar sugar surged 26% in a week and over 200% in one year, showed technical data of the stock. Dwarikesh sugar rose nearly 250% in one year, while gained more than 25% in one week.  

BJP win in UP to help sugar stocks 

Earlier, Parth Nyati, Founder, Tradingo has said that sugar stocks would do well if BJP retains power in Uttar Pradesh. "Although there should not be much impact on individual stocks, we can see the sentimental impact on Infra and Sugar stocks. If BJP comes back in the power, then Infra and Sugar stocks may do well due to stability in policies and vice-versa,” he had said on exit polls trend.  

Brokerage houses have also predicted transformational change in sugar sector owing to government's plans of ethanol blending with fuel.  

Expected export demand 

Earlier, Higher exports from the world`s second-biggest sugar producer could check the rally in global prices, which have been buoyed by a spike in crude oil prices and lower output in top exporter Brazil, a Reuters report said.  

The shipments will also help India reduce its stockpile and support the local prices of the sweetener, crucial in ensuring millions of cane farmers get government-mandated prices. 

India had exported a record 7.2 million tonnes of sugar in the previous season, taking advantage of government subsidy for overseas sales. 

But this year, mills could export 7.5 million to 8 million tonnes without government incentives, said a New Delhi-based dealer with a global trading firm, said the report 

"Rupee and global prices are supportive. If the government does not impose any restrictions on exports fearing inflation, then exports could rise to 8 million tonnes," it added.