A leading brokerage firm, Systematix Institutional Equities, maintains a bullish view on the sugar sector, anticipating supportive government policies regarding ethanol production and pricing after the elections.
The brokerage issued buy ratings for several sugar companies: Balrampur Chini (target price: ₹501), Triveni Engineering (target price: ₹421), Dwarikesh Sugars (target price: ₹96), and Praj Industries (target price: ₹607).
Systematix believes the government remains committed to the 20% blending target, viewing the ethanol policy change as temporary. With a revised sugar surplus estimate of 8.85 million tonnes by ISMA, they expect relaxed juice and B-Heavy molasses usage restrictions in the upcoming season.
The brokerage anticipates increased cane diversion towards ethanol production, potentially exceeding initial FY25 ethanol volume projections. Additionally, a favorable monsoon forecast could lead to a boost in sugarcane cultivation.
