The rally in sugar stocks got further leg-up this week after a report suggested that sugar output in Maharashtra, the state that accounts for more than one-third of India's total sugar production, in the 2023-24 crop year is expected to fall by 14% to a four-year low.

According to a Reuters report, sugar output in Maharashtra is expected to fall to 9 million metric tons in the 2023/24 crop year, compared to 10.5 million tons in 2022/23 because of a deficit in August rainfall The expected drop in India’s sugar output could lead to higher sugar prices in India and sugar companies stand to benefit from this.

Here’s how sugar stocks performed this week:

Shree Renuka Sugars Ltd.: SRSL is a global agribusiness and bio-energy corporation with a diversified business portfolio, that includes sugar, ethanol, power, and organic manure. The company operates seven sugar mills across the country and has a total crushing capacity of 35,000 TCD. The stock closed at Rs 55.25 on Friday (15 September 2023), taking its 1-month gains to nearly 23%.
Triveni Engineering & Industries Ltd.: A sugar and ethanol producer, TRIVENI is an Indian multinational conglomerate company headquartered in Kanpur, Uttar Pradesh, India. It is one of the prominent players in its engineering businesses, spanning power transmission, water & wastewater treatment solutions, and defence. The firm runs 11 sugar mills in India with a total crushing capacity of 10.5 MTPA.
The stock closed this week 9.46% higher at Rs 385.90. In the last one month, the stock has appreciated by 34%. According to REFINITIV, Batlivala & Karani Securities maintained a Buy rating on the stock while increasing its target price to Rs 403, which indicates an upside potential of another 6% from current levels.

EID Parry (India) Ltd.: EID Parry operates in the sugar, ethanol, and renewable energy sectors. The company is headquartered in Chennai, Tamil Nadu, and is a part of the Murugappa Group. It runs nine sugar mills in India with a crushing capacity of 43,400 TCD. EID Parry also has a sugar refinery with a capacity of 1,000 TCD.EID Parry shares closed this week at Rs 562 apiece with 6.10% gains. In the previous one month, the stock has gained nearly 21%.

Balrampur Chini Mills Ltd.: BCML It is one of the largest sugar producers in India, with a total crushing capacity of 76,500 tonnes per day. Headquartered in Kolkata, West Bengal, BCML is a vertically integrated company, which means that it controls all aspects of the sugar production process, from growing sugarcane to marketing sugar. The stock closed at Rs 441.20 on Friday, wrapping up 5.30% gains this week. According to REFINITIV, JM Financial Securities Ltd has a price target of Rs 490 on the stock with a Buy rating. However, the consensus target price on the stock is Rs 452, which is an upside potential of over 2% from today's closing price.

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