Sugar Stocks: List of Best Sugar Stocks in India (2024)
Sugar Industry is the second largest agricultural industry and provides about 12% of rural employment. The scale of production and consumption of sugar in India offers investors a chance to benefit from the growth of the sugar industry. In the past year, numerous sugar sector sectors recorded double-digit growth, thus showcasing the growing potential of the sugar industry in India. However, investing in sugar stocks comes with challenges such as volatile prices and changing regulations.
Therefore, to navigate through the risks associated with sugar stocks, we have listed down essential factors to consider when investing in the best sugar stocks, along with a list of top 10 sugar companies in India, how to invest in them and much more.
What are Sugar Stocks?
Sugar stocks are shares of companies that are engaged in the production, processing, and distribution of sugar and sugar-based products.
These stocks are not just limited to the domestic market but also have a global reach, providing ample diversification opportunities. Furthermore, the sugar industry is backed by strong fundamentals with factors such as increasing demand, government support, and technological advancements driving growth.
Hence, investing in sugar sector stocks can offer significant growth potential along with resilience in uncertain market conditions.
List of Best Sugar Stocks in India 2024
Here is the list of the most popular sugar companies listed in NSE –
| Best Sugar Stocks in India | Market Cap (Rs. in cr.) | Share Price (Rs.) | 5Y CAGR (%) | Total revenue (Q) |
|---|---|---|---|---|
| E I D-Parry (India) Ltd | 10,966.15 | 617.75 | 25.22 | 7,811.32 |
| Shree Renuka Sugars Ltd | 9,376.00 | 44.05 | 32.22 | 3,062.10 |
| Triveni Engineering and Industries Ltd | 7,770.88 | 355.00 | 41.02 | 1,333.09 |
| Balrampur Chini Mills Ltd | 7,647.31 | 379.05 | 21.84 | 1,290.13 |
| Piccadily Agro Industries Ltd | 4,933.00 | 522.90 | 119.98 | 269.50 |
| Bajaj Hindusthan Sugar Ltd | 4,222.17 | 33.10 | 31.24 | 1,744.90 |
| Bannari Amman Sugars Ltd | 3,201.51 | 2,553.10 | 11.83 | 769.70 |
| Dalmia Bharat Sugar and Industries Ltd | 3,112.12 | 384.50 | 28.53 | 610.12 |
| Dhampur Sugar Mills Ltd | 1,496.72 | 228.90 | 1.39 | 380.68 |
| Dwarikesh Sugar Industries Ltd | 1,383.07 | 73.45 | 21.54 | 318.96 |
Disclaimer: Please note that the above list is for educational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing.
Note: The list of top 10 sugar companies in India sugar shares list data is from 23rd April 2024. However, for real-time updates on sugar stock prices and market trends, visit the smallcase stocks collection today!
Top 10 Sugar Companies in India: An Overview
Here are the top sugar stocks in India from our curated sugar company share list, with a strong focus on innovation, sustainability, and diversification.
EID Parry (INDIA) Ltd.
EID Parry (INDIA) Ltd. is a part of the Murugappa Group and is the biggest sugar company in India. The sugar company has a strong focus on innovation and has developed several value-added products like low glycemic sugar, organic sugar, and industrial sugar, among other sugar products. Recently, mutual fund holdings in the company have increased by 6.95%.
Shree Renuka Sugars Ltd.
Shree Renuka Sugars Ltd. is the biggest sugar manufacturing company in India, with a significant presence in Brazil as well. The sugar company in India has diversified into areas like biofuels, power generation, and ethanol production, among others. It has a strong distribution network and caters to domestic and international markets.
Triveni Engineering & Industries Ltd.
Triveni Engineering & Industries Ltd. is another prominent player in the Indian sugar industry, with a diversified business portfolio that includes sugar, power, and engineering. Among the sugar stock list, this smallcap sugar stock has generated the highest return in the past year.
Balrampur Chini Mills Ltd
Balrampur Chini Mills Ltd., an Indian sugar manufacturer, is actively involved in producing and selling sugar. The sugar company’s diverse operations encompass the manufacturing and sale of ethanol, ethyl alcohol, co-generated power generation and sales, as well as the production and sale of agricultural fertilisers. The sugar company is divided into three segments: Sugar, Distillery, and Others.
Piccadily Agro Industries Ltd
Piccadily Agro Industries Ltd specialises in producing sugar and distillery products, including sugar, molasses, bagasse, liquor, and malt. The company has demonstrated strong financial performance, with revenues growing annually at 12.44% over the last five years, surpassing the industry average of 9.46%. Recently, the company experienced a significant growth of 18.63% in just one week. Among the top 10 sugar companies in India, this smallcap company has generated the highest return of 999.22% in the past year.
Bajaj Hindusthan Sugar Ltd
Bajaj Hindusthan Sugar Ltd, formerly known as Bajaj Hindusthan Limited, operates as a holding company with core activities in sugar production, alcohol manufacturing, and power generation. The company has seen a favourable market performance, with a 1-month return of 5.11%, indicating steady investor confidence and operational success. As a result, this smallcap sugar stock is among the top 5 sugar stocks in India based on 1-month return.
Bannari Amman Sugars Ltd
Bannari Amman Sugars Limited operates across five divisions: sugar production, power co-generation, distillery, granite processing, and windmills. The company has modestly grown its market share from 2.46% to 2.65% over the last five years, consistently maintaining or increasing dividend levels. Recently, it achieved a notable 1-month return of 9.85%, reflecting its robust business performance.
Dalmia Bharat Sugar & Industries Ltd
Dalmia Bharat Sugar and Industries Limited, an Indian sugar company, primarily focuses on sugar production, power generation, industrial alcohol manufacturing, and refractory product manufacturing. It is also considered one of the best sugar company shares to invest in.
Dhampur Sugar Mills Ltd
Dhampur Sugar Mills Ltd is an integrated sugarcane processing company focused on manufacturing and selling sugar, power, and chemicals. It operates across three main segments: Sugar, Distillery, and Co-generation. The company has demonstrated steady financial performance, achieving a 1-month return of 3.93%, reflecting its operational efficiency and market resilience.
Dwarikesh Sugar Industries Ltd
Dwarikesh Sugar Industries Ltd specialises in manufacturing sugar and related products, along with power and ethanol/industrial alcohol production. Over the past five years, the company has achieved an impressive return of 165.16%. With a current dividend yield of 2.76%, an investment of Rs. 1,000 in the stock is expected to generate an annual dividend of Rs. 27.59.
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Sugar Sector in India
The sugar sector is an essential part of the Indian economy, with India being the world’s second-largest producer of sugar after Brazil.
Sugarcane significantly contributes 1.1% to India’s GDP, a noteworthy figure given it is cultivated in just 2.57% of the total cropped area. In India, sugar is a crucial commodity with an annual domestic demand of approximately 25 million tonnes. Additionally, the sugarcane industry supports about 7.5% of the rural population, providing vital employment opportunities and playing a substantial role in the country’s economic framework.
The government also provides several incentives and subsidies to sugar companies to promote the growth of the sector. However, the sector also faces challenges, such as environmental concerns and competition from other sweeteners.
Despite these challenges, the sugar sector in India has shown consistent growth over the years. The outlook for sugar stocks in India appears promising, fueled by rising demand for sugar-based products and technological innovations that are driving industry growth.
Advantages of Investing in Sugar Stocks
Investing in sugar sector stocks can offer several advantages to investors, including:
- Diversification: Investing in sugar shares can help diversify an investor’s portfolio by adding exposure to an industry that is not directly correlated to the broader market. This can help reduce overall portfolio risk and potentially enhance returns.
- Growth potential: The sugar industry has significant growth potential due to increasing demand for sugar and sugar-based products. Rising population, urbanisation, and changing consumer preferences are driving the demand for sugar-based products, providing a growth opportunity for sugar companies.
- Resilience: The sugar sector is relatively resilient, with demand for sugar remaining stable even during economic downturns. This makes the sugar stocks a potential investment option to mitigate the risk.
- Value Opportunities: Some sugar stocks may be undervalued, providing investors with an opportunity to invest in quality companies at attractive valuations. This can potentially lead to significant capital appreciation over the long term.
- Defensive Characteristics: The sugar stocks can provide investors with defensive characteristics, making it a suitable investment option during times of economic uncertainty. This is because sugar is considered an essential commodity and has inelastic demand, which can provide a stable source of revenue for sugar companies even during challenging economic conditions.
Who Should Invest in Sugar Sector Stocks?
Sugar industry is driven by seasonal production cycles and regulatory changes which might not suit your investment thesis. Therefore, investing in best sugar stocks is suitable for investors with certain characteristics, such as –
- Long-term Investors: Individuals seeking to capitalise on the growth potential of a staple industry with long-term horizons could benefit from investing in sugar stocks, given India’s leading role in the global sugar market.
- Agricultural Sector Enthusiasts: Investors with an interest or background in agricultural commodities and industries might find sugar stocks appealing due to their significance in the Indian economy and their impact on rural employment.
- Investors Looking to Diversify Portfolio: Those looking to diversify their portfolios by including emerging market assets might consider Indian sugar stocks as a way to tap into the economic growth of one of the largest markets in Asia.
- Risk Tolerant Investors: Those who are comfortable navigating the potential volatility associated with commodity prices and regulatory changes, and are capable of managing such risks through strategic investments, might find sugar stocks a rewarding opportunity.
How to Invest in Sugar Sector Stocks?
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How to Identify Best Sugar Stocks in India?
To choose the best sugar stocks in India, investors can consider the following factors:
- Demand and Supply: The demand and supply of sugar play a crucial role in the price and profitability of sugar stocks. Investors should consider factors such as consumer preference, global economic conditions, agricultural practices, government policies, and weather conditions that can affect the supply of sugar.
- Regulation: Government policies and regulations can significantly impact the sugar industry. Investors should consider factors such as import and export policies, subsidies, and taxes that can affect the profitability of sugar companies.
- Global Demand: The global demand for sugar is strong, particularly in emerging markets. Investors should consider the potential for growth in these markets and the ability of sugar companies to capitalise on this demand.
- Financial Ratios: Financial ratios such as Price to Book Value Ratio (P/BV), Price to Earnings Ratio (P/E), and Return on Capital Employed (ROCE) can provide insights into the financial health and profitability of sugar companies.
- Dividend Yield: Some sugar companies offer high dividend yields, which can provide a steady stream of income for investors.
- Market Capitalisation: Larger, more established sugar companies may have a lower risk profile compared to smaller, less established companies.
- Expert Analysis and Recommendations: Analysts and financial advisors can provide insights and recommendations on the best sugar stocks to invest in based on their research and analysis.
Factors to Consider While Investing in Sugar Stocks
Here are some factors that you should consider while investing in sugar sector stocks:
- Market Conditions: The performance of the sugar sector share is closely tied to global commodity prices and demand dynamics. Understanding the broader economic environment is crucial to making informed investment decisions.
- Supply and Demand Dynamics: Sugar prices can be highly volatile due to fluctuations in supply and demand. Understanding the factors that influence these dynamics is critical to predicting the future of sugar stocks in India sugar share price movements.
- Government Policies: It can have a significant impact on the sugar industry, particularly in terms of subsidies, tariffs, and trade agreements. Hence, understanding the regulatory environment is quite important when investing in penny sugar stocks India.
- Financial Performance: Like any other stock, it’s essential to evaluate a sugar company’s financial performance before investing. This includes factors like revenue growth, profit margins, and debt levels of the sugar stocks.
- Competitive Landscape: The sugar industry is highly competitive, with many players vying for market share. Understanding a company’s competitive position relative to its peers is crucial to making informed investment decisions.
It is advisable, to conduct due diligence or consult a financial advisor before investing in stocks.
Risks Associated with Investing in Best Sugar Stocks in India
Investing in sugar stocks in India comes with several risks that investors should be aware of before making any investment decisions. These risks include:
- Weather Risk: Weather is the biggest risk as far as sugar stocks are concerned. Of the total annual crop losses in the sector, many are due to direct weather risks.
- Commodity Prices: Sugar is a commodity, and its prices can fluctuate depending on supply and demand. Therefore, it’s important for investors to keep an eye on international market trends to understand how they might affect their investments.
- Government Regulations and Support: The government plays a major role in the sugar industry with its policies and regulations. Investors should be aware of any changes in government policy that could impact demand for products like ethanol or table sugar, as well as any government support programs such as subsidies to ensure sustainable long-term returns.
- Competition: The sugar sector is highly competitive, and companies must invest in innovative strategies to stay ahead of their rivals. Investors should be aware of any new competitors entering the market, as this could affect the profits of existing players.
- Technological Development: Technology plays an important role in the production and sale of sugar, with many companies investing heavily in research and development activities to increase efficiency and reduce costs. Investors should look out for any technological advancements that might give existing players a competitive edge over their competitors.
- Volatility of Sugar Prices: One of the principal risks of investing in sugar stocks is the volatility of sugar prices, which are subject to various factors such as supply and demand, geopolitical events, and weather conditions.
- Long-term Wealth Creation: Sugar stocks have not been consistent wealth creators in the long run. Investors will be better off investing in great companies that consistently create wealth over time.
Therefore, investors should carefully consider these risks and conduct thorough research before investing in sugar stocks in India.
To Wrap It Up…
As we have mentioned above, the future of sugar stocks in India outlook seems promising. Hence, investing in sugar stocks to buy can be a rewarding experience for investors who take the time to understand the sector and the factors that drive its performance.
Moreover, you can save a lot of your time by investing in modern investment products like smallcases. Since these are ready-made investment portfolios, you can begin investing in them with just a few clicks.
However, it is always advisable to conduct your own research and due diligence before making any investment decisions.
FAQs
Based on the market capitalisation, E I D-Parry (India) Ltd is the largest sugar company in India?
Based on 1-month return, following are the top-performing sugar industry stocks in April 2024 –
– Piccadily Agro Industries Ltd
– K M Sugar Mills Ltd
– Prudential Sugar Corp Ltd
– Sakthi Sugars Ltd
Sugar stocks began a remarkable surge in 2021, which is ongoing. Uttam Sugar, for instance, has seen its stock price soar by an impressive 270% over the past three years. As temperatures rise, there’s heightened demand for sugar from ice-cream and soft drink manufacturers.
Statistical projections indicate that the sugar market is projected to achieve a 2.34% CAGR between 2022 and 2028. Investors should comprehend both the growth potential and challenges confronted by sugar companies.
Sugar stocks to buy embarked on a remarkable rally in 2021, and this momentum endures. This is good news for sugar penny stocks. Investors must consider their investment goals and risk appetite before investing in paper stocks.
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