Best Sugar Stocks in India (2024)

Last Updated on Feb 13, 2024 by Harshit Singh

Sugar sector stocks are stocks of a company that is involved in the production and sale of sugar products. As India is the world’s largest consumer and producer of sugar, investing in the best sugar stocks presents an enticing opportunity for investors to tap into the long-term growth prospects of the sugar industry.

The Indian sugar industry is the second largest agro-based industry in the country, providing approximately 12% of the overall employment opportunities in rural India. Although the growth prospect of the sugar industry bears positive news, while investing in the best sugar stocks, investors must navigate the risks, including fluctuating commodity prices and regulatory shifts.

In this blog, we will explore sugar stocks, factors influencing sugar production and supply, and, based on various fundamental factors, identify the best sugar stocks in India.


What are sugar stocks?

Sugar stocks are stocks of companies that produce and/or distribute sugar. These companies can cultivate, process, refine, and market sugar products.

Overview of the Indian Sugar Industry

According to the Indian Sugar Mills Association (ISMA), sugar production in India rose by 3.69% to 120.7 lakh tonnes during the October-December quarter of the current year. In the same period last year, it stood at 11.64 mn tonnes.

The majority of sugar is produced through sugarcane. The production of sugar includes 80% from sugarcane extraction and 20% from sugar beet. The prices of sugar are significantly affected by the volatility of its production. The factors influencing sugar production and supply are

  • Dependence on the monsoon season.
  • Payment delays to farmers lead to a shift towards other crops.
  • Drought conditions make farmers less inclined to grow water-intensive sugarcane.
  • Government policies and initiatives aimed at enhancing sugar production and stabilising domestic prices.
  • Price of ancillary products like animal feed and ethanol.
  • Competition and export opportunities.

Best sugar company based on the market cap

Sugar company name Market Cap (Rs. in cr.) Close Price (Rs.) PE Ratio (%) 1Y Return (%) ROCE (%)
E I D-Parry (India) Ltd 10,359.93 579.95 10.93 12.54 27.77
Shree Renuka Sugars Ltd 9,812.34 46.40 -49.82 -2.54 17.12
Balrampur Chini Mills Ltd 7,520.20 371.85 26.46 3.14 13.19
Triveni Engineering and Industries Ltd 7,302.44 331.65 4.08 19.14 65.93
Bajaj Hindusthan Sugar Ltd 4,636.73 35.70 -34.42 165.33 0.74
Dalmia Bharat Sugar and Industries Ltd 3,225.84 391.10 12.90 15.92 11.94
Bannari Amman Sugars Ltd 3,037.49 2,471.90 21.18 -13.11 15.10
Piccadily Agro Industries Ltd 3,027.82 322.40 135.59 657.85 15.19
Dhampur Sugar Mills Ltd 1,644.75 247.20 10.44 16.73 19.80
Dwarikesh Sugar Industries Ltd 1,527.12 80.40 14.57 -9.28 18.17

Note: The data is from 13th February 2024. The list of top 10 sugar companies in India are derived using the following filters on the Tickertape Stock Screener – 

  • Sector: Consumer Staples > Sugar
  • Market Cap: Sort from highest to lowest

Top 10 best sugar stocks based on the net profit margin

Note: The data is from 13th February 2024. The list of top 10 sugar stocks in India are derived using the following filters on the Tickertape Stock Screener – 

  • Sector: Consumer Staples > Sugar
  • Net Profit Margin: Sort from highest to lowest


Top 10 best sugar stocks based on return on equity

Note: The data is from 13th February 2024. The list of top 10 sugar stocks in India are derived using the following filters on the Tickertape Stock Screener – 

  • Sector: Consumer Staples > Sugar
  • Return On Equity: Sort from highest to lowest

Best sugar stocks in India for long-term (5-yr CAGR)

Note: The data is from 13th February 2024. The list of the best sugar stocks for long-term are derived using the following filters on the Tickertape Stock Screener – 

  • Sector: Consumer Staples > Sugar
  • 5-yr CAGR: Sort from highest to lowest

Benefits of investing in sugar stocks

  • Array of complementary products and services: Within the sugar sector, a broad spectrum of products and services is available, encompassing table sugar, white refined sugar, jaggery, ethanol, and power generation. This diversity offers investors a plethora of investment avenues to explore.
  • Long-term growth potential: Investors venturing into sugar sector stocks stand to capitalise on long-term growth prospects fueled by escalating demand for sweeteners. With prudent management, this uptick in demand could yield sustainable returns.
  • Steady profits: Because of their extensive array of products and services, sugar sector stocks frequently deliver consistent profits to investors. This reliability may appeal to individuals seeking stable returns over time.
  • Portfolio diversification: Including sugar sector stocks in an investment portfolio can enhance diversification, mitigating risks associated with other stock market investments. For instance, these sugar stocks may hedge against inflation, appealing to those keen on broadening their investment portfolio.
  • Risk-reward balance: Ultimately, the best sugar stocks in India offer investors an enticing risk-reward balance. Despite inherent risks, the potential for returns may surpass that of alternative investments, making them attractive.

Factors to consider before investing in sugar stocks

There are a few factors that you should consider before investing in sugar stocks. Some of them are enumerated below.

  1. Global sugar demand and supply: Sugar supply and demand are affected by various factors, such as economic conditions, government policies, and changes in consumer preferences. To invest in sugar sector stocks, you must gauge the demand and supply of sugar products.
  2. Weather conditions: As sugar crops are sensitive to weather conditions, they can impact the production and distribution of sugar. For instance, drought, floods, or other natural disasters can negatively impact sugar production. It may affect the stock prices of sugar companies.
  3. Government policies: New government rules, regulations, and policies may affect the profitability of sugar companies. Hence, you must keep track of new government regulations if you want to invest in sugar sector stocks.
  4. Enhancing profitability: Ethanol may be found in molasses, a by-product of the sugar industry. When ethanol is blended with petrol, it produces a cheaper and cleaner source of energy. To promote this, the Indian government aims to achieve 20% blending of ethanol in petrol by 2025, compared to the present levels of 10%. 
  5. A surge in soft drink consumption: In February 2024, soft drink and juice makers reported a 30-35% year-on-year jump in sales. This is unusual for the month of February, as traditionally, sales start increasing in March-April. But due to unusually high temperatures in February this year, sales of summer products, such as appliances and beverages, have jumped.

Apart from the factors mentioned above, you must also consider each company’s performance, industry competition, and sugar price volatility before investing in sugar stocks. 

To conclude

The sugar industry is a prominent agro-based industry in India. The government’s focus on increasing production and blending of ethanol for cleaner energy can significantly impact the industry’s overall growth. However, sugar is a cyclical product and may be subject to high market volatility. Hence, a thorough analysis of the sector and stocks you are interested in can be a wise decision. With Tickertape stock screener, you can screen sugar stocks and identify the best sugar stocks in India that aligns with your investment goals. Try it now!

FAQ

Which is the biggest sugar company in India?

What are the best sugar stocks?

What are some of the key disadvantages of the sugar sector?

The disadvantages of the sugar sector include an overreliance on rainfall, excessive production in recent years leading to oversupply and driving prices below production costs, and a decline in global prices for this commodity.

Which are the top 5 sugar stocks in India in January 2024?

Anjali Chourasiya
Latest posts by Anjali Chourasiya (see all)

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