Sugar stocks up over 4 per cent on BSE on ethanol price hike

MUMBAI: Sugar stocks on Monday surged by over 4 per cent on the Bombay Stock Exchange, after the government increased the price of ethanol to Rs 27 a litre for blending with petrol, giving boost to the industry.

Shares of Bajaj Hindusthan, today settled at Rs 122.95, up 4.46 per cent on the BSE. During the day, the stock soared 6.11 per cent to a month high of Rs 124.90.

Dhampur Sugar Mills was the second biggest gainer and closed up 4.36 per cent at Rs 61.10 on the BSE.

"This is a positive news for the entire sugar industry. The government's decision would help sugarcane producers get better price for ethanol and will help them diversify into ethanol industry," Ashika Stock Brokers Research Head Paras Bothra said.

Following the announcement, stocks of other sugar companies, including Shree Renuka Sugars closed (up 0.15 per cent), Simbhaoli Sugars (up 0.92 per cent) on the BSE.

The government today approved an interim fixed price of Rs 27 a litre for ethanol, higher from Rs 21.5 a litre earlier.

A Group of Ministers (GoM) recently reaffirmed Rs 27 per litre price for ethanol to be paid by the oil marketing companies to the sugar mills.