Sugar Stocks Rally Up To 12%: Bajaj Hindusthan, Avadh Sugar, Dwarikesh Hit 52-Week Highs

Sugar stocks witnessed strong buying interest on Monday, with several companies gaining sharply on expectations of an improved industry outlook.

Shares of Bajaj Hindusthan Sugar, Avadh Sugar & Energy, Dalmia Bharat Sugar and Industries, Dhampur Sugar Mills, Dwarikesh Sugar Industries and several other companies touched their respective 52-week highs during intraday trading.

Shree Renuka Sugars, EID Parry India, Triveni Engineering & Industries and Balrampur Chini Mills were among other major gainers, advancing between 3% and 8%.

Supply concerns lift stocks

The rally in sugar stocks today comes after the sector faced selling pressure last week following the government's decision to allow duty-free imports of 1 million tonnes of raw sugar.

The move highlighted concerns over domestic availability ahead of the festive season.

However, expectations of firm sugar prices have improved investor sentiment. Reports of tighter stockholding limits, strong demand and lower sugarcane production have added to optimism surrounding the sector.

In Uttar Pradesh, one of India's largest sugar-producing states, sugar output estimates have been lowered to 9.1 million tonnes from an earlier projection of 9.41 million tonnes.

Production is also expected to be slightly below last season's 9.3 million tonnes. Excessive rainfall during the crop growth period affected yields, while demand from jaggery producers further reduced cane availability for sugar mills.

UP elections and sugarcane prices in focus

The upcoming Uttar Pradesh elections could also have an impact on the industry. According to a report by Business Standard, market participants expect the state's sugarcane price for the 2026-27 season could rise, potentially increasing input costs for mills.

At the same time, the minimum selling price of sugar has remained unchanged at ₹31 per kg since February 2019.

Several companies are also looking to improve capacity utilisation across sugar, ethanol and co-generation businesses. Sustained sugar prices could therefore provide further support to earnings and investor sentiment.

The sharp movement in shares has also put some companies under closer scrutiny. The BSE sought clarification from Uttam Sugar Mills following a significant price movement, while Dwarikesh Sugar said there was no undisclosed price-sensitive information behind its recent stock movement.