The company said its board has approved expanding ethanol production capacity by 430-kilo litre per day to 1,400-kilo litre. In February, the board had approved capacity expansion from 720-kilo litre per day to 970-kilo litre
MUMBAI: Shree Renuka Sugars has pipped Eid Parry and Balrampur Chini to become the country most-valued sugar firm, with the stock having surged nearly 300% over the last two months.
Currently, Shree Renuka's market capitalisation stands at Rs8,375.61 crore while that of EID Parry India Ltd and Balrampur Chini is at Rs7,627 crore and Rs7,444 crore respectively.
On Wednesday, shares hit a 52-week high of Rs39.35 apiece. The scrip has surged over 295% since 27 April, and hit an upper circuit in 18 of 20 sessions.
In a recent regulatory filing, the company said its board has approved expanding ethanol production capacity by 430-kilo litre per day to 1,400-kilo litre. In February, the board had approved a capacity expansion from 720-kilo litre per day to 970-kilo litre per day.
"Considering the huge untapped demand for ethanol due to the policies of Government of India on ethanol blending, the Board of Directors of the company approved further capacity expansion for ethanol production from 970-kilo litre per day to 1,400-kilo litre per day," the filing said.
"With considerable increase in ethanol sales and demand supply balance evening out, integrated sugar mills are expected to witness sustained increase in their cash flows going ahead," Care Ratings said in a 8 June report.
Many sugar stocks have risen since the beginning of the year after the government brought forward the target date for achieving 20% ethanol blending with petrol by two years to 2023, to help reduce India's dependence on oil imports.
India net imported of 185 million tonne of worth $551 billion in 2020-21. A successful 20% ethanol blending programme can save the country $4 billion per annum.
"Besides, ethanol is a less polluting fuel, and offers equivalent efficiency at lower cost than petrol. Availability of large arable land, rising production of foodgrains and sugarcane leading to surpluses, availability of technology to produce ethanol from plant-based sources, and feasibility of making vehicles compliant to ethanol blended petrol make E20 not only a national imperative, but also an important strategic requirement," as per a government statement.
Dharani Sugars, Simbhaoli Sugar, Rana Sugars, Dalmia Bharat, Uttam Sugar Mills, KM Sugar Mills, Triveni Engineering, SBEC Sugar, Magadh Sugar, Dwarikesh Sugar, Avadh Sugar, DCM Shriram Industries, Riga Sugar have also advanced 120-378% so far this year.
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