Sugar stocks continued their rally on Monday with the shares of major companies rising to around 18 per cent.
The automakers have agreed to manufacture flex-fuel vehicles within six months, said Union minister Nitin Gadkari on Saturday. The flex-fuel fuel, also known as an alternative fuel, is a combination of gasoline and methanol or ethanol.
Sugar companies like Triveni Engineering & Industries, Dhampur Sugar Mills, Uttam Sugar Mills, Avadh Sugar & Energy, and Dalmia Bharat witnessed an increase in their share price from 11% to 18% on the BSE.
At 11.18 am, the S&P BSE Sensex was up 0.78% at 55,981 when the sugar stocks were making new highs. Mawana Sugars, Andhra Sugars, Balrampur Chini Mills, Magadh Sugar & Energy, and Dwarikesh Sugar Industries were up from 5% to 10% on Monday.
The government has set a target of 20% ethanol blending by 2025 and the ethanol demand is expected to grow. Also, the issue of sugar glut will be addressed by diverting excess sugar to ethanol production, said brokerage Systematix Shares and Stocks in its report released in February.