Balrampur Chini, Triveni, Dhampur Sugar, Shree Renuka others: Ethanol volume uncertainties weigh on outlook

The concerns successful the caller past person weighed connected diversion of Sugar to Ethanol production. Government successful bid to power Sugar prices has not allowed important diversion of Sugar. Hence the crushing play successful Sugar twelvemonth 2024 though whitethorn beryllium showing favorable accumulation trends , nevertheless the Balrampur Chini Mills, Dwarikesh Sugar Industries, Dhampur Sugar Mills , Shree Renuka Sugar stock prices with objection of fewer manufacturers person not seen large gains. 

Sugar Year oregon Sugar Season starts from 1st October and ends connected 30th September.

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According to the State-wise crushing information for Sugar Year 2024, sweetener accumulation stood astatine 31.6 MMT (million metric Tonne), which is little compared to 32.2 MMT successful the erstwhile twelvemonth astatine the aforesaid time, suggest Centrum Stock Broking data. Additionally, the full magnitude of sugarcane crushed has dropped to 313 MMT, a 4.3% decline, arsenic contrasted to astir 327 MMT successful SSY23 implicit the aforesaid clip frame.

 The authorities of UP has experienced a steep alteration and accumulation is down 8.0% YoY owed to little sweetener cane availability. This has enactment unit connected state wide crushing numbers and  is the crushed for this decline. There is nary large important emergence successful accumulation compared to a period ago. However determination is immoderate emergence successful accumulation of Sugar from Maharshtra that has amazed arsenic good arsenic compensated for the nonaccomplishment successful accumulation from the authorities of UP.

On a nationalist scale, the sweetener betterment numbers for  Sugar play 2024 person improved connected year-on-year ground astatine 10.09% - acknowledgment to little diversion. In this backdrop, analysts astatine Centrum Stock Broking expect sweetener accumulation successful SY24 to interaction 32.0 MMT, compared to 33.1 MMT successful SY23. '

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While the accumulation numbers are favorable, nevertheless little accumulation has failed to assistance net outlook for sweetener producers. The higher diversion of sweetener towards accumulation of Ethanol had improved net outlook for manufacturers arsenic had helped negociate higher sweetener inventories. Nevertheless present determination is uncertainty connected further benefits arsenic Ethanol accumulation is not expected to emergence successful the adjacent word keeping analysts and experts cautious. 

Analysts astatine Centrum Stock Broking accidental that their wide outlook connected the sweetener assemblage remains negative. This position is influenced by notifications from the Government of India affecting ethanol volumes, with a likelihood of a much important interaction connected FY25 fiscal performance.  Additionally, the summation successful sweetener accumulation would pb to higher inventory levels and is expected to exert downward unit connected sweetener prices., they added. 

However, analysts adhd that the worst is implicit for the assemblage successful presumption of antagonistic quality flow.

Meanwhile the earning show uphill present by producers arsenic Dwarikesh Sugar mills for the MArch'2024 4th person failed to assistance capitalist sentiments. Analysts astatine Systematix Research said that "Subdued income and offtake coupled with falling crushing numbers and little capableness utilization impacted Dwarikesh Sugar show during the March quarter.

Disclaimer: The views and recommendations made supra are those of idiosyncratic analysts oregon broking companies, and not of Mint. We counsel investors to cheque with certified experts earlier taking immoderate concern decisions

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Published: 06 May 2024, 07:06 PM IST