Best Sugar Stocks in India 2022

Everyone with a sweet tooth who live in India are fortunate enough to have multitude of festivals that revolves around sweets, while the good news today is that one can also have a sweet tooth for stocks, especially in India, whereas the Indian government in July last year set a target of 20% ethanol blending with petrol by 2025, and the government has also set the goal to have 100% ethanol-run vehicles gradually, while ethanol is alcohol of more than 99% purity, and it’s a by-product of sugar mills although it can also be produced from grains or cane juice, when blended with petrol ethanol helps the engine combust fuel more effectively, and this results in lower emissions and pollution, whereas since the announcement of India’s ambitious policy to produce ethanol-blended petrol, sugar stocks have been in the spotlight, while in a very recent development, Finance Minister Nirmala Sitharaman in her budget speech, proposed to levy additional excise duty of Rs 2 per liter on unblended fuel, and the tax will be applicable from 1 October 2022, therefore this step is expected to be able to boost the ethanol blending of fuel or flex-fuel, which will then benefit sugar companies directly.

Best Sugar Stocks in India for 2022

  • Shree Renuka Sugars Ltd

It is an India-based agri-business and bio-energy company, and the Company is engaged in the business of sugar manufacturing, sugar refining, sugar trading, ethanol, and co-generation, while its segments include Sugar milling, Sugar refinery, Distillery, Co-generation, Trading, and Other, whereas the Company’s products include sugar, ethanol, power and organic manure, while the Sugar segment produces white sugar, molasses, and bagasse, and the Trading segment is engaged in the trading of white and raw sugar, coal, molasses, and MG alcohol, whereas the Co-Generation segment produces electricity, steam, coal ash, and bagasse ash, while the Other segment includes bio-compost and press mud, whereas to produce all these products the company has approximately 11 operational mills, including seven in South and West India and four in Centre-South Brazil, with integrated ethanol & power co-generation capacity

  • Market Cap- ₹ 10,153 Cr.
  • Current Price- ₹ 47.7
  • High / Low- ₹ 63.2 / 24.4
  • Stock P/E-
  • Book Value₹- 2.86
  • Dividend Yield- 0.00 %
  • ROCE- 6.23 %
  • ROE%-
  • Face Value- ₹ 1.00
  • E I D-Parry (India) Ltd

It is an India-based company, which is primarily engaged in the manufacturing of sugar and nutraceuticals, while the Company has a presence in the farm inputs business, including bio-pesticides through its subsidiary, Coromandel International Limited, and its segments include Nutrient and allied business, Crop Protection, Sugar, Co-generation, Distillery, Nutraceuticals and Others, whereas it offers customized grades of pharmaceutical sugar to a range of pharma applications, such as tablet coatings, liquid orals, dry syrups, intravenous applications and in drug delivery systems, it is a vendor to various specialty & industries, such as infant-food, beverages, & confectionary, among others, and its nutraceutical products include Organic Spirulina, Organic Chlorella and Organic Phycocyanin, among others, while it also offers hand sanitizer and medical grade hand sanitizer, and to produce all these products the company approximately has nine sugar plants, which are spread across South India.

  • Market Cap- ₹ 9,414 Cr.
  • Current Price- ₹ 531
  • High / Low- ₹ 591 / 386
  • Stock P/E- 9.07
  • Book Value- ₹ 300
  • Dividend Yield- 2.07 %
  • ROCE- 37.1 %
  • ROE- 18.5 %
  • Face Value- ₹ 1.00
  • Balrampur Chini Mills Ltd

It is an India-based integrated sugar manufacturing company, and the principal activity of the Company is the manufacturing and sale of sugar, while the allied business activities of the Company primarily consist of manufacturing and sale of ethanol, ethyl alcohol, generation and sale of power, and manufacturing and sale of agricultural fertilizers, whereas its segments include Sugar, Distillery and Others, while the Sugar segment is principally engaged in the manufacturing and sale of sugar and its by-products, whereas the Distillery segment is principally engaged in the sale of industrial alcohol, which mainly constitutes ethanol sold under contracts with public and private oil marketing companies (OMCs) and other products to institutional buyers, while the Others segment principally engaged in the sale of agricultural fertilizers, such as soil conditioner and granulated potash, among others, while the Company’s products include sugar, ethanol and alcohol, power, bagasse and agri-inputs.

  • Market Cap- ₹ 7,367 Cr.
  • Current Price- ₹ 361
  • High / Low- ₹ 526 / 298
  • Stock P/E- 18.4
  • Book Value- ₹ 136
  • Dividend Yield- 0.69 %
  • ROCE- 16.1 %
  • ROE- 17.3 %
  • Face Value- ₹ 1.00
  • Triveni Engineering and Industries Ltd

It is an India-based company that is primarily engaged in diversified businesses, which can be categorized into two segments which are Sugar & allied businesses and Engineering business, while the Sugar & allied business segment primarily comprises the manufacture of sugar and distillation of alcohol, whereas the Engineering business segment primarily comprises manufacture of high-speed gears, gearboxes and providing water/waste-water treatment solutions, the Company is a manufacturer of white crystal sugar, which has approximately seven manufacturing plants situated in the states of Uttar Pradesh, and it has over two distilleries, which have a total capacity of over 320 kiloliters per day located at Muzaffarnagar, Uttar Pradesh and Sabitgarh, Uttar Pradesh, while the manufacturing facility is located at Mysore in Karnataka.

  • Market Cap- ₹ 5,801 Cr.
  • Current Price- ₹ 240
  • High / Low- ₹ 374 / 166
  • Stock P/E- 14.4
  • Book Value- ₹ 79.1
  • Dividend Yield- 1.35 %
  • ROCE- 21.1 %
  • ROE- 24.8 %
  • Face Value- ₹ 1.00

Bannari Amman Sugars Ltd

It is an India-based company, which is engaged in the business of manufacture of sugar, generation of power through co-generation, and production of industrial alcohol and granite products, while the Company’s segments include Sugar, Power, Distillery, which includes industrial alcohol, and Granite Products, and to produce its products the company has sugar factories with cogeneration plants in Tamil Nadu and two sugar factories with co-generation plants in Karnataka, whereas the company has two distillery units one in Tamil Nadu and another in Karnataka, the Company has a Granite Processing unit in Tamil Nadu, and the company also has windmills, which are located in the southern part of Tamil Nadu, whereas it has sugar factories with a capacity of approximately 23700 megatons of sugarcane crushing, 129.80 megawatts of power, 127.50 KL per day (KLPD) of industrial alcohol, bio-products & seven windmills with a total capacity of 8.25 MW.

  • Market Cap- ₹ 3,519 Cr.
  • Current Price- ₹ 2,807
  • High / Low- ₹ 3,049 / 1,712
  • Stock P/E- 35.0
  • Book Value- ₹ 1,135
  • Dividend Yield- 0.36 %
  • ROCE- 6.75 %
  • ROE- 5.88 %
  • Face Value- ₹ 10.0

Conclusion

The Sugar industry has been finally reaping its benefits this year, while the shares mentioned above have turned into multi-baggers offering returns ranging from 157% to 84%, and the new ethanol measures discussed above have only added to this potential, while in addition to this, CRISIL also reported a sugar production crisis in Brazil due to the weather conditions this year, and this could further positively influence the exports of sugar from India, while investors however must also stay up to date with the upcoming reforms from the government and the cyclical nature of the industry, whereas ethanol has been a game changer for the sugar industry, as diversification into distillery, ethanol, and electricity became possible, most sugar businesses in India are turning into integrated players, and this has increased molasses demand, whereas the Indian government has made ethanol blends in motor vehicle fuels mandatory, and this directive has provided sugar mills the opportunity to implement forward integration, besides that flex-fuel is also a good solution to address the problem of excess sugar production, and to meet the target of 20% ethanol blending in petrol by 2025, the government has already directed oil CPSEs (Central Public Sector Enterprises) to set up second generation ethanol bio-refineries, while it has also lowered the goods and service tax (GST) on ethanol meant for blending with gasoline from 18% to 5% to curb dependence on imports, while these reasons are compelling, one must view ethanol stocks with the same amount of caution as one would view other stocks, and ethanol stocks are vulnerable to the cyclical nature of the sugar industry and agro-climatic risks related to cane production, while further tthe profitability remains vulnerable to the policies of the government, domestic and international trade, and pricing, therefore if one plans to invest, assess the fundamentals and prospects of the business, and sustained research must not be compromised despite the positive odds.

Recent Posts

Scan to Download
ios&Android APP

Open trading account and start trading!

Join our happy customers