Sugar stocks fall up to 7% on export ban; analysts see limited long-term impact
Sugar company shares dropped Thursday after India banned sweetener exports. This move follows rising domestic sugar prices and concerns over crop yields. Despite short-term challenges, analysts see positive medium to long-term prospects for the se...
By ET Bureau |
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Sugar stocks fall up to 7% on export ban; analysts see limited long-term impact
Mumbai: Shares of sugar producers fell Thursday after the Centre prohibited exports of the sweetener. However, analysts remain positive on the sector's medium- to long-term potential, despite short-term pains due to the shipment curbs.
Gaurav Sharma, head of research, Globe Capital Market, said the government's pause on sugar exports is driven by a recent rise in domestic sugar prices amid lower sugarcane yields in Maharashtra and Karnataka, alongside likely threat to crop shrinkage due to the El Nino this year.
"However, most sugar mills have continued to expand capacity to support the government's 20% ethanol blending targets. This will lead to less sugar production going forward but would support production and sales despite the export restrictions," he said.
Medium- to long-termpotential, however, is positive, say analysts
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The ban is a near-term overhang for sugar stocks, rather than a long- term concern, Sharma said.
Performance of these sugar producers has been mixed in 2026. Among the top ten sugar companies by market capitalisation, Avadh Sugar & Energy, Balrampur Chini Mills, Dhampur Sugar Mills, Dalmia Bharat Sugar & Industries, Godavari Biorefineries and Bannari Amman Sugars are up 5-31% this year, while Triveni Engineering & Industries, Bajaj Hindusthan Sugar, Shree Renuka Sugars and EID Parry are down 2-23% in 2026.
Mahesh Ojha, vice president, research, Kantilal Chhaganlal Securities, said the overall impact due to sugar's export ban is expected to remain limited as sugar production in India is already under pressure due to the heatwave and uneven rainfall.
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