Hopes of decontrol see buying interest in sugar cos

Shares of sugar companies have been seeing rising investor interest amid renewed hopes of decontrol and bottoming out of prices. Stocks of many sugar companies, like Dhampur Sugar Mills, Shree Renuka, Sakthi Sugars and Triveni Engineering, among others, have appreciated sharply in the past one month.

More than a dozen stocks outperformed the broader market to gain 4-5% on Thursday. Analysts expect domestic sugar prices to firm up in the near future due to recent floods in UP, the second-largest contributor to India’s sugar production.

This will also result in lowering of sugar production estimates, they say. Another factor that could drive up stock prices is the expectations of decontrol of the industry, which, if implemented, could result in the rerating of some stocks.