Intraday Spotlight: Sugar stocks rise as markets tumble

Ugar Sugar Works Ltd has hit the upper circuit of 20 per cent!

Sugar stocks are in the buzz and they are once again trending upwards. Ugar Sugar Works Ltd has hit the upper circuit of 20 per cent as the stock soared from the previous day’s closing price of Rs 34.50 to Rs 41.40 today on the BSE. 

Sugar companies have been trending since the Union Budget 2022 as Finance Minister Nirmala Sitharaman had proposed levying additional excise duty of Rs 2 per litre on unblended fuel. For the past several years now, sugar companies are generating revenues from ethanol blending. Ethanol is the byproduct of sugar production which is blended with petrol. The government is targeting an ethanol blend of 20 per cent by 2025 which currently is around 7-8 per cent. Considering the need, the company has planned its distillery capacity expansion for ethanol production at Ugar Plant. The timing couldn’t be any better! 

Ugar Sugar Works has had an exceptional December quarter. Compared to the previous quarter, its revenues have grown 25% to Rs 340 crore. The EBITDA and net profit have exploded by 835 per cent and 980 per cent, respectively. The stock today has created a fresh 52-week high of Rs 41.40, at which the trading is currently halted.