Multibagger Praj Industries may continue its upward journey – here is why!

In India Ethanol blending is at 8.5 per cent as of now, up from 2 per cent in 2017.

There is a good news for Praj Industries and sugar stocks as India brings forward the target for 20 per cent ethanol-blending in petrol from 2025 to 2023. 

The government announcement via a Gazette notification which would come into effect from April 2023 said, “The Central Government hereby directs that the oil companies shall sell ethanol-blended petrol with a percentage of ethanol up to 20 per cent as per the Bureau of Indian Standards specifications, in the whole of the States and union territories”. 

This move in long term is expected to cut India’s import bill and will prove to be environment friendly as it may reduce the carbon dioxide pollution in cities. In India Ethanol blending is at 8.5 per cent as of now, up from 2 per cent in 2017. 

Government previously has set up a target of ethanol blending of 10 per cent in 2022 and 20 per cent in 2030. Earlier this year GoI then shifted the target to from 2030 to 2025. However, with the latest announcement the target of 20 per cent blending has been shifted from 2025 to 2023. 

This development positive for Praj Industries as several companies can be expected to set up new capacities for processing ethanol. Along with Praj Industries several sugar stocks are also expected to benefit from the recent government announcement. 

Praj Industries closed Thursday’s trading session 7.5 per cent higher while Balrampur Chini gained by 3.30 per cent while Dalmia Bharat Sugar and Industries strengthened by 3.56 per cent. Most of the sugar stocks have continued their positive price momentum in 2021 after showcasing a strong performance in 2020.