Bajaj Hindusthan, Shree Renuka, Rana Sugars gain for second straight session; here is why

Shares of sugar manufacturers were witnessing buying interest for a second straight session on Wednesday, March 18. Shares of Sakthi Sugars, Kothari Sugars, Rana Sugars, Vishwaraj Sugar, Mawana Sugars, Magadh Sugar, Dwarikesh Sugar, Dhampur Sugar, Bajaj Hindusthan, EID Parry, Avadh Sugar and Balrampur Chini rose between 1% and 5%.

Sugar companies have been witnessing buying interest after a report by credit ratings agency ICRA said that global sugar prices have fallen sharply amid surplus supply from Brazil, even as the outlook for the Indian sugar sector remains stable. This, thereby, raised hopes of margin expansion for sugar companies going ahead, analysts noted.

As per an ICRA report, international sugar prices in the current production year are lower than the current cost of sugar production and prevailing domestic prices.

"International sugar prices in SY2026 have remained lower than the current cost of sugar production and prevailing domestic prices, mainly due to surplus sugar supply from Brazil. Global sugar production for SY2025–SY2026 is estimated at 189.3 million metric tonnes, about 5% higher than the previous year, while consumption is expected at 178.1 million metric tonnes, around 1% higher year-on-year," ICRA said.

"Reflecting the surplus supply, international prices have declined sharply. Raw sugar prices fell to $313 per metric tonne in February 2026 from $445 per metric tonne in February 2025, while white sugar prices declined to $408 per metric tonne from $532 per metric tonne during the same period. The premium between white and raw sugar stood at $95 per metric tonne in February 2026, compared with $87 per metric tonne in February 2025," ICRA added.

ICRA said that despite global price volatility, the domestic demand-supply scenario remains comfortable.

"As per the third advance estimates of the Indian Sugar Mills Association, gross sugar production in SY2026 is projected to increase by 9.4% to 32.41 million metric tonnes, compared with 29.6 million metric tonnes in the previous year. After an estimated diversion of 3.1 million metric tonnes towards ethanol production, net sugar production is likely to remain at 29.3 million metric tonnes. Considering domestic consumption of 28.3 million metric tonnes and exports of 0.7 million metric tonnes, the closing sugar stock is expected to reach 5.6 million metric tonnes, equivalent to about two months of consumption," the credit ratings agency said.

Export boost

Investor confidence towards sugar companies also got a boost after the government approved an additional export quota of 87,587 tonnes of sugar for the 2025-26 marketing year (October-September), following requests from sugar mills, the ministry said in a circular on Monday.

The government had earlier permitted exports of 1.5 million tonnes for the season and in February allocated an extra 500,000 tonnes to willing mills on a non-swappable basis, news agency Press Trust of India reported.

Mills had until February to apply for portions of the additional quota. Of the 500,000 tonnes, only 87,587 tonnes were requested and approved, with the remainder lapsing, the ministry stated.

Expectations of higher ethanol blending

Meanwhile, reports suggest that sugar companies have approached the government to increase the ethanol blending from the current cap of 20%.

As of 12:20 pm, most sugar stocks were trading with a positive bias on the National Stock Exchange, outperforming the benchmark NIFTY50 index, which was up nearly 1%.