Why sugar stocks have turned sweeter today — explained | Mint
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Business News/ Markets / Stock Markets/  Why sugar stocks have turned sweeter today — explained
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Why sugar stocks have turned sweeter today — explained

Stock market today: Shares of Dalmia Bharat Sugar are top gainers as the stock hit 20 per cent upper circuit in early morning deals on Monday session

Stock market today: Shares of Dalmia Bharat Sugar and Bajaj Hindusthan Sugar are among those sugar stocks that have hit upper circuit today. (REUTERS)Premium
Stock market today: Shares of Dalmia Bharat Sugar and Bajaj Hindusthan Sugar are among those sugar stocks that have hit upper circuit today. (REUTERS)

Stock market today: Following reduction in goods and services tax (GST) on sugar from 18 per cent to 5 per cent in 48th GST Council meeting and central government's target to double ethanol blending from existing 10 per cent to around 18 to 20 per cent by end of 2023 have suddenly made sugar stocks sweeter among the Dalal Street bulls. Sugar stocks namely Dalmia Bharat Sugar, Dhampur Sugar, Bajaj Hindusthan Sugar, Shree Renuka Sugars, Dwarkesh Sugar, etc. have been attracting huge buying interest since stock market's opening bell today.

Dalmia Bharat Sugar share price today opened upside and went on to hit intraday high of 440.90 apiece on NSE, logging near 20 per cent intraday gain. In fact, the sugar stock hign upper circuit as well in early morning deals on Monday. Dhampur Sugar share price too opened upside and hit today's high of 275 apiece, ascending to the tune of 17 per cent within few minutes of opening bell today. Shares of Bajaj Hindusthan Sugar Ltd are another sugar stock that touched upper circuit today. Bajaj Hindusthan Sugar share price today opened with an upside gap and went on to lock-in 10 per cent upper circuit today. Shree Renuka Sugars share price too opened upside and went on to hit intraday high of 65.60 apiece on NSE, near 3 away from its 52-week high of 68.75 apiece.

Speaking on the reason for sugar stocks turning sweeter today, Avinash Gorakshkar, Head of Research at Profitmart Securities said, "In the 48th GST council meeting held recently, the central government has declared reduction in GST on sugar from 18 per cent to 5 per cent. Market is buzz that it would lead to rise in business volume of sugar that will improve margins of the sugar companies. However, this is a short term trigger that is going to fade shortly."

Avinash Gorakshkar of Profitmart Securities said that there is a long term trigger working in favour of sugar stocks and that trigger is central government's target to double its ethanol blending from existing 10 per cent to around 18 to 20 per cent by end of 2023. So, demand for ethanol from sugar companies are expected to remain for long term and hence any dip in quality sugar stocks should be seen as buying opportunity by positional long term investors.

Sugar stocks to buy today

On sugar stocks to buy today, Ravi Singhal, CEO at GCL Securities said, "Crude oil prices are cooling down these days and it may lead to profit booking in sugar stocks as demand for ethanol blending may go down due to dip in oil prices. However, this dip can be a good opportunity for positional long term investors who want to add sugar stock in their portfolio. Such stock investors can think of adding Balrampur Chini Mills and EID Parry shares in their portfolio."

Ravi Singhal of GCL Securities said that EID Parry shares may go up to 1000 apiece levels in next one year whereas Balrampur Chini Mills shares may go up to 665 apiece by the end of 2023.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.

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ABOUT THE AUTHOR
Asit Manohar
Chief Content Producer at Live Mint Digital Team
Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Check all the latest action on Budget 2024 here. Download The Mint News App to get Daily Market Updates.
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Published: 19 Dec 2022, 02:00 PM IST
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