Sugar company shares were in demand in Tuesday’s intraday session, rallying up to 10% amid heavy volumes on a positive outlook. Triveni Engineering & Industries rose 9% to Rs 244 on the BSE, surpassing its previous high of Rs 235 reached on December 28, 2021. Balrampur Chini Mills rose 7% to Rs 399, surpassing its previous high of Rs 398.25 reached on October 18, 2021.

Also Read| Hinduja Global Solutions hits record high on bonus issue plan

On the BSE, Dhampur Sugar Mills, Dalmia Bharat Sugar and Industries, Avadh Sugar, Dwarikesh Sugar, EID Parry (India), Mawana Sugars and Uttam Sugar Mills were up 5-10%. At 10:42 a.m., the S&P BSE Sensex was up 0.53% at 59,498.

Sugar mills are likely to increase their revenue and profitability in the 2022 season, according to a CRISIL report. The sugar season runs from  October to September.

Also Read| Sensex jumps over 250 points while Nifty trades around 17,700 in early trade

Sugar prices are likely to rise 16-17% this season, compared to a marginal drop last year, due to increasing industrial demand and exports. Increased demand combined with consistent output is predicted to deplete inventories.

Also Read| US Stock Market: DJIA, S&P500, Nasdaq and Russell concluded on a positive note

A revenue increase of 18-19% will be aided by increasing sales volumes and improved realisations. Cane prices are expected to climb at a slower rate of 8% in north India and 3% in south India. 

This would leave plenty of leeway for growth in operating profitability, or earnings before interest, taxes, depreciation, and amortization (Ebitda), which is forecast to rise by 300-400 basis points, according to CRISIL.

Also Read| Trending Stocks: Maruti Suzuki, Vedanta, Federal Bank, Marico and others in news today

CRISIL Ratings upgraded Balrampur Chini Mills’ long-term bank facilities from ‘CRISIL AA/Positive’ to ‘CRISIL AA+/Stable’ in November.

ICRA anticipates that Triveni Engineering’s sales will remain flat in FY22, despite increasing revenues from the distillery segment offset by decreased sugar volumes (both domestic and exports).

Also Read| Stocks that should be on your watchlist on Tuesday, January 4, 2022

Triveni Engineering also entered the production of country liquor in FY21, allowing for even more forward integration. Furthermore, ICRA stated in its November rating action that the company’s grain-based distillery of 60-kilo litres per day is expected to begin operations in Q4 FY22 and is likely to strengthen its operational profile and boost revenue diversification.