Sugar stocks surge up to 17% in weak market; Mawana sugars, Dhampur, Dwarikesh sugar hit fresh highs amid spurt in volume

Sugar stocks rallied as much as 17% on Tuesday even as the markets extended losses for the fifth session amid geopolitical tension and surging oil price. The surge in sugar stock prices comes amid burgeoning oil prices and focus on ethanol blending with the fuel.  

Brokerages have also been bullish on sugar sectors and see good upside in them.  

"The sugar stocks have remained in a structural uptrend forming higher peak and higher trough in the long-term chart," ICICI Securities has said in its report while recommending Balrampur chini mills.  

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Leading sugar pack stocks, Mawana sugars on Monday surged 17% to hit 52-week high value of Rs 140.55 amid spurt in volume. This sugar stock has given multibagger returns to its shareholders as the shares have jumped more than 200% in the last one year, while it gained over 60% in just six months.  

Shares of Mawana Sugars have traded on 52-week low of Rs34 on March 19.  

At 10.15 am, shares of Mawana Sugars were trading with Rs 16.35 (13.72%) gain at Rs 135.55 apiece on the BSE on Tuesday. 

Meanwhile, other sugar stocks too gained as shares of Dhampur sugar appreciated by more than 5% to hit new 52-week high of Rs 434.35 a share on the BSE. 

Avadh sugars gained over 3% to Rs 639, Shree Renuka sugars was up more than 5% to Rs 36.50, Dwarikesh sugar jumped more than 7% to trade on new high of Rs 106.80 a share. Balrampur Chini Mills too witnessed spurt in volume as the share gained nearly 2% to Rs day's high of Rs 455.80, while Dalmia Bharat gained nearly 3% to trade on day's high of Rs 440.  

Brokerages are of the view that sugar industry is on the cusp of a mega transformation and emerged as a potent driver of clean energy, driving India's shift to renewable energy faster. The government has not only advanced the ethanol blending program but also has raised it to 20 per cent.   

Sugar production and prices are expected to remain firm, supported by global prices and demand for ethanol blending, Niraml Bang has noted.