et_economyabout 3 hours ago
NEUTRAL(90%)
buy
Sugar prices to stay firm amid tight inventories; ethanol earnings under strain, says ratings agency Ind-Ra
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Market Impact Score
-100 Bearish+100 Bullish
AI Analysis
The auto sector's performance, as seen in recent Nifty Auto falls, could indirectly impact ethanol demand if vehicle sales slow. However, the primary driver here is the supply-demand dynamics within the sugar and ethanol industries.
Trading Insight
Monitor sugar inventory levels and government policies on ethanol blending and pricing for directional bias in sugar and distillery stocks.
Key Evidence
- •Sugar prices in India are expected to remain firm due to limited stock.
- •Ethanol producers are facing challenges from oversupply and no price increases.
- •Profitability for cane-based ethanol is under strain.
- •The ratings agency Ind-Ra highlighted these trends.
- •Risk flag: Government intervention in sugar and ethanol pricing
Affected Stocks
DALMIASUGDalmia Bharat Sugar and Industries Ltd
Mixed
Benefits from firm sugar prices but faces headwinds from ethanol profitability.
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