India is the largest producer and consumer of sugar in the world. According to data from the Ministry of Consumer Affairs (October 2022), India produced 5000 lakh metric tons of sugarcane. The India Cane Sugar Market is expected to grow at a CAGR of 5.2% between 2025 and 2030. There’s also a growing demand for organic sugar in India, driven by the rise in consumer preference for natural products. This trend presents huge opportunities for the best sugar stocks in India.
Sugar stocks are in the spotlight due to the government’s target of 20% ethanol blending with petrol by 2025. To meet this goal, around 1,016 crore litres of ethanol will be needed. This requires establishing an ethanol production capacity of about 1,700 crore litres by 2025, assuming an 80% plant efficiency. This sets the stage for potential growth in the sugar sector, making it an exciting time to explore the best sugar stocks in India. (Source: Mordor Intelligence)
What is EBP?
The Ethanol Blended Petrol (EBP) Programme was launched in January 2003. It aims to promote alternative, eco-friendly fuels and reduce India’s dependence on energy imports.
Under the National Biofuel Policy 2018, the government expanded the EBP Programme nationwide. Oil Marketing Companies (OMCs) began selling petrol blended with up to 10% ethanol in 2019, excluding the Union Territories of Andaman and Nicobar and Lakshadweep.
The government initially set a 10% blending target by 2022 and a 20% target by 2030. However, it advanced the 20% target to 2025-26. To meet this, India will need 1,016 crore litres of ethanol for blending and 334 crore litres for other industrial uses. This brings the total ethanol requirement to 1,350 crore litres by 2025.
The programme has delivered significant benefits over the last decade. It has saved ₹1,06,072 crore in foreign exchange, reduced CO2 emissions by 544 lakh metric tons, and replaced 181 lakh metric tons of crude oil. (Source: Dept. for Promotion of Industry and Internal Trade- Invest India & Vikaspedia)
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Best Sugar Stocks in India
Let’s discuss India’s 3 best sugar stocks- DCM Shriram Ltd, EID Parry (India) Ltd, Magadh Sugar & Energy Ltd.
Let’s explore the Best Sugar Stocks in India in 2025
DCM Shriram Ltd
Current Price: ₹ 1,109 | 52 Week High (19-Nov-2024) 1,371.10: 52 Week Low | (28-Mar-2024): 832.40
DCM Shriram, part of the DCM Group founded by Sir Shri Ram, has a long history of industrial excellence. The group manufactures a wide range of products, including textiles, sugar, chemicals, and electric equipment.
The company operates four integrated sugar complexes in central Uttar Pradesh, with a crushing capacity of 38,000 TCD. It also has a power cogeneration capacity of 141 MW, out of which 84 MW can be exported.
In the last three months, DCM Shriram’s stock has risen by 9%. The company plans to invest in renewable energy, chemicals, and metals while expanding globally. It also focuses on social upliftment and sustainability. By 2028, DCM Shriram aims to invest ₹12,000 crore in manufacturing chemical and petrochemical products in Bharuch, Gujarat.
3-Year Performance:
-Profit Growth Compounded: -14%
-CAGR for Stock Price Growth: 1%
-Growth in Compound Sales: 10%
-Equity Return: 14%
Twelve-Month Trailing Period (TTM) Performance:
-Profit Growth Compounded: 5%
-CAGR for Stock Price: 8%
-Growth in Compound Sales: 3%
-Equity Return: 7
With its ambitious plans and strong performance, the company shows promising growth potential.
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EID Parry (India) Ltd
Current Price: ₹ 856 | 52 Week High (18-Dec-2024): 997.00 | 52 Week Low (20-Mar-2024): 539.30
EID Parry (India) Ltd, a subsidiary of the Murugappa Group, is one of the oldest sugar companies in India. It set up the country’s first sugar plant in Nellikuppam, Tamil Nadu, in 1842. Over the years, it has remained a pioneer in the industry.
EID Parry was the first in India to produce ethanol from B-heavy molasses and sugar syrup. The company plans to invest ₹87 crore to expand its ethanol production at the Nellikuppam unit. This move aligns with India’s Ethanol Blending Programme (EBP), which targets 20% ethanol blending with petrol by 2025.
With strong fundamentals, low debt, significant investments, and growing interest from FIIs and DIIs, the company demonstrates solid potential. Let’s analyze its performance.
3-Year Performance:
-Profit Growth Compounded: 23%
-CAGR for Stock Price Growth: 19%
-Growth in Compound Sales: 17%
-Equity Return: 16%
Twelve-Month Trailing Period (TTM) Performance:
-Profit Growth Compounded: -26%
-CAGR for Stock Price: 51%
-Growth in Compound Sales: -11%
-Equity Return: 14%
The growing demand for ethanol presents a huge opportunity for the company. With strong financials and a forward-looking approach, EID Parry is well-positioned to benefit from this shift.
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Magadh Sugar & Energy Ltd
Current Price: ₹ 605 | 52 Week High (27-Sep-2024): 1,010.00 | 52 Week Low (20-Mar-2024): 522.00
Magadh Sugar & Energy Limited is part of the K.K. Birla Group, with decades of experience in the sugar industry. The company produces sugar, ethanol, and biofuel-based power co-generation.
It’s a major player in India’s private sugar sector, with a crushing capacity of 50,800 tonnes per day in Uttar Pradesh and Bihar. Its mills in Bihar benefit from higher realizations and less competition.
The company runs three mills with a total crushing capacity of 19,000 TCD and a cogeneration capacity of 38 MW. Magadh Sugar plans to expand its Narkatiaganj Unit, raising capacity from 7,500 TCD to 10,000 TCD and introducing steam-saving measures.
3-Year Performance:
-Profit Growth Compounded: 62%
-CAGR for Stock Price Growth: 25%
-Growth in Compound Sales: 5%
-Equity Return: 11%
Twelve-Month Trailing Period (TTM) Performance:
-Profit Growth Compounded: 17%
-CAGR for Stock Price: -9%
-Growth in Compound Sales: 8%
-Equity Return: 17%
With strong plans and growth potential, Magadh Sugar is set for continued success.
Conclusion
Summing up, India’s cane sugar market is ready to witness strong growth. This is driven by a growing consumer base and rising demand for both conventional and organic sugar. As per APEDA data, India exported 21,932.591 MT of organic sugar in 2021-2022.
Being one of the largest agricultural countries, India presents a great opportunity for market expansion. Sugar is an essential part of daily life, and its demand for industrial use is also increasing. Additionally, the government’s EBP initiative, aiming for 20% ethanol blending with petrol by 2025, can further benefit the sugar industry and top sugar stocks in India. This makes the sugar sector a promising area for investors looking at long-term growth.
That’s all for today’s post. Hope you get some valuable insights from here.
Happy reading!
Disclaimer
The blog is meant for informational purposes and serves the general analysis of the stocks. The contents provided here are based on careful research and analysis utilizing the fundamental and technical indicators over a while. The post does not have any direct recommendations about investing or trading in the securities market. Thorough research and careful consideration are necessary for individuals to fulfill their responsibility in making financial decisions. Seeking professional advice before making any financial decisions is always advisable.
