Buying In Sugar Stocks Continues; Uttam Sugar Hits 20% Upper Circuit

Sugar stocks listed on the Indian bourses continue to be in a sweet spot with aggressive buying in the pack. The government's aggressive policy push such as the Ethanol Blended Petrol (EBP programme) for a more combustible auto fuel is also fostering in some action in the sugar sector companies in India.

This is as ethanol i.e. to be blended with petrol is a by product of sugar. Individually, the sector as a whole in today's trade is seeing buying with some of the counters such as Uttam Sugar hitting 20% upper circuit with a price of Rs. 260.55 per share.

Other companies such as Ponni Sugars is also locked in the upper circuit of 20 percent. Other scrips from the space were seen rallying between 3-15%, with Andhar Sugars up 10%, Avadh Sugars up over 15%, Dwarikesh Sugar up 7.89% at the time of writing this report.

Prospect of sugar stocks

Buying in the sugar scrips on dip is recommended. This is even as the domestic prices have not moved higher. There are expectations that production of sugar in the country shall see an increase. Also, international moves are supporting sugar companies back home. Another reason that is factored in by experts is that the ethanol play will reduce the cyclicality in the sector.

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