Introduction:
The stocks of companies involved in the sale, production, or distribution of sugar are known as sugar stocks. With India being the world’s largest sugar producer and consumer, investing in sugar stocks can be a lucrative venture. They allow investors to gain high long-term returns and diversify their investment portfolios.
Overview of the Indian sugar industry
The sugar industry is the second-largest agro-based industry in India (next to the textile industry), contributing to around 12% of the total employment opportunities in rural areas. As per the Indian Sugar Mills Association (ISMA), sugar production in India has increased by 3.69%, reaching 120.7 lakh tonnes, during the October-December quarter of the last year.
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Owing to its applications as a sweetener in various dishes, the demand for sugar in India has traditionally been on the higher side. Investing in sugar stocks can fetch decent long-term returns, almost certainly overperforming the market benchmark. However, as an investor, you need to be aware of the potential risks while investing in these stocks. These include high price volatility, government policies, seasonal fluctuations, etc.
Top sugar stocks in India in 2024
If you are wondering what are the top sugar stocks to invest in India in 2024, here’s the list:
1. Balrampur Chini Mills Limited
Balrampur Chini Mills is a prominent player in the Indian sugar industry. The company has consistently demonstrated strong financials and a robust production capacity. With a diversified product portfolio, including sugar, ethanol, and power, Balrampur Chini Mills is well-positioned to capitalise on the growing demand for ethanol and clean energy alternatives.
At market close on 23 February 2024, Balrampur Chini Mills Limited’s shares were trading for Rs. 379.90 per share at the National Stock Exchange (NSE) and Rs. 379.95 per share at the Bombay Stock Exchange (BSE).
2. Dalmia Bharat Sugar and Industries Limited
Dalmia Bharat Sugar and Industries Limited is another prominent player in the sugar industry, known for its efficient sugar manufacturing units and a growing presence in the ethanol segment. The company's strategic approach to diversification, coupled with a strong balance sheet, makes it an attractive investment option.
As of 23 February, Dalmia Bharat Sugar and Industries shares were available for Rs. 407.85 per share at the NSE and Rs. 406.60 per share at the BSE. The company’s P/E ratio stood at 10.88% as against the industry's P/E ratio of 16.43%.
3. Triveni Engineering and Industries Limited
Triveni Engineering & Industries is a diversified company interested in sugar, engineering, and water management. The sugar segment of the company has witnessed steady growth, driven by increased sugar production and a focus on by-products such as ethanol. The company’s commitment to innovation and sustainability makes it an attractive choice for investors.
As of 23 February 2024, Triveni Engineering and Industries’ shares were trading for Rs. 347.10 per share at the NSE and Rs. 346.80 per share at the BSE at market closing.
4. EID Parry (India) Limited
EID Parry is a part of the prestigious Murugappa Group headquartered in Chennai. It is a critical player in the sugar and bio-products space. The company has been actively involved in expanding its ethanol capacity, aligning with the national emphasis on renewable energy sources. The strong financials and strategic initiatives make this company a popular choice among investors.
As of 23 February 2024, EID Parry’s shares were trading for Rs. 638.70 per share at the NSE and Rs. 638.95 per share at the BSE. The company’s market cap of Rs. 11,342 crores is the highest among sugar companies in India.
5. Dhampur Sugar Mills Limited
Dhampur Sugar Mills is a well-established player in the Indian sugar industry. It has consistently delivered strong financial performances and has proactively adopted new technologies. The company’s focus on expanding its production capacity makes it a good choice for investors. As of 23 February 2024, Dhampur Sugar Mills’ shares were available for Rs. 248.45 per share at the NSE.
To conclude
Investing in sugar stocks in India presents an exciting opportunity for investment in 2024. However, you must conduct thorough research, consider the overall market conditions, and assess each company's specific strengths and growth strategies before making investment decisions.
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