Sugar Stocks Rally Up to 5% as Govt Extends Excise Duty Exemption for Higher Ethanol Blends

Mumbai, June 11: Shares of sugar companies surged across the board on Thursday, gaining as much as 5 per cent in intraday trade, after the government announced an extension of excise duty exemptions for petrol blended with higher levels of ethanol — a policy move that traders interpreted as a direct structural tailwind for the sugar sector’s ethanol business. 

The rally was broad-based, touching large-cap names such as Balrampur Chini Mills as well as mid-cap and smaller players including Triveni Engineering, Magadh Sugar, and Dhampur Bio Organics. The government’s decision is seen as supportive of ethanol blending demand, which is a key and growing revenue stream for sugar mills that divert cane juice or B-heavy molasses toward ethanol production. The latest move also paves the way for the rollout of fuel grades beyond the current E20 standard, raising the prospect of a sustained increase in ethanol offtake volumes over the medium term. 

Stocks in Focus 

• Balrampur Chini Mills (BALRAMCHIN) — The stock closed at ₹548.55, up ₹12.00 or 2.24% from a previous close of ₹536.55. It opened at ₹542.00, hit an intraday high of ₹551.75, and held a low of ₹538.00. The VWAP for the session stood at ₹546.28, indicating sustained buying pressure through the day. As one of India’s largest integrated sugar producers with a significant ethanol distillery capacity, Balrampur is among the most direct beneficiaries of any policy-driven expansion in ethanol blending mandates. 

• Triveni Engineering & Industries (TRIVENI) — Triveni closed at ₹382.60, gaining ₹9.35 or 2.51% from a previous close of ₹373.25. The stock opened at ₹375.60, touched a high of ₹388.50, and found a low at ₹371.85. The VWAP was ₹381.69. Triveni’s diversified presence across sugar, ethanol distilleries, and power transmission engineering positions it as a multi-lever play on the ethanol blending theme. 

• Magadh Sugar & Energy (MAGADSUGAR) — The stock closed at ₹450.95, up ₹2.85 or 0.64% from a previous close of ₹448.10. It opened higher at ₹459.50, reached a session high of ₹460.00, and slipped to a low of ₹448.00 before recovering toward the close. The VWAP came in at ₹453.89. While the closing gain was more modest than peers, Magadh Sugar’s intraday high reflected strong initial enthusiasm for the ethanol policy announcement. 

• Dhampur Bio Organics (DHAMPURE) — The standout performer of the session among sugar stocks, Dhampur Bio Organics surged 5.00% to close at ₹112.42 — the same as its intraday high — against a previous close of ₹107.07. The stock opened flat at ₹107.07, hit a low of ₹106.00, and then climbed sharply to close at the day’s peak. The VWAP stood at ₹111.39. The 5% gain underscores the market’s conviction that smaller sugar-ethanol players stand to gain disproportionately from a structural increase in blending volumes, given their leveraged operating models. 

The day’s sectoral rally reflects a broader re-rating theme that has been building around India’s ethanol blending programme over the past two years. With the government now signalling intent to push beyond E20 — the current 20% ethanol-blending target — sugar mills that have invested in distillery capacity are increasingly being valued not just as commodity processors but as energy transition participants. Analysts have noted that incremental ethanol volumes carry meaningfully higher margins than refined sugar, making policy-driven blending expansions a direct earnings catalyst for the sector. 

Source

• nseindia.com
• https://www.ptinews.com/story/business/govt-extends-excise-duty-exemption-to-higher-ethanol-petrol-blends/3755976