The surge came as the Supreme Court dismissed a plea challenging the rollout of 20% ethanol-blended petrol (E20), effectively ruling out the availability of ethanol-free petrol. Meanwhile, the government also lifted restrictions on ethanol production from sugarcane juice, syrup, and molasses for the 2025/26 fiscal year.
On the BSE, Rajshree Sugars & Chemicals shares led the rally, skyrocketing by 20% to hit their upper circuit at Rs 45.36, while Shree Renuka Sugars shares followed, surging 14% to hit Rs 32.80.
This was further followed by the shares of Dhampur Sugar Mills, which climbed 12.85% to Rs 142.20. Avadh Sugar Energy shares also gained strongly, advancing 10.5% to Rs 467.05, while the shares of industry major Balrampur Chini Mills rose 7.9% to Rs 584.40.
The twin policy tailwinds will ensure sustained demand for ethanol, benefiting sugar producers and distilleries. With the government pushing ahead with its blending roadmap and ensuring a steady supply of feedstock, market sentiment around sugar companies turned strongly positive.
Here are the details:
Supreme Court dismisses plea against E20 rollout
The Supreme Court on Monday dismissed a public interest litigation (PIL) that sought to halt the nationwide rollout of 20% ethanol-blended petrol, citing concerns that millions of motorists were being forced to use fuel not designed for their vehicles. The bench, led by Chief Justice B R Gavai, rejected the plea and upheld the government’s stance, noting that the move benefits sugarcane farmers and aligns with India’s ethanol-blending roadmap.The ruling means consumers will not have the option of ethanol-free petrol, a development seen as a major positive for the ethanol industry. The court also noted that challenges like engine compatibility and consumer awareness fall within the ambit of policymakers and manufacturers, not grounds to stall the program.
Govt lifts ethanol production caps for 2025/26
Separately, the government on Monday announced the removal of all restrictions on ethanol production from sugarcane juice, syrup, and molasses for the 2025/26 marketing year. Mills and distilleries can now produce ethanol without any quantitative caps, providing sugar producers with an assured avenue for diversion of excess cane and boosting profitability.
“I am directed to state that sugar mills and distilleries are allowed to produce ethanol from sugarcane juice/sugar syrup, B-Heavy Molasses as well as C-Heavy Molasses during ESY 2025-26 without any restriction,” said the government’s notification.
The Ministry of Consumer Affairs stated that sugar diversion to ethanol will be periodically reviewed to ensure adequate domestic sugar availability. With monsoon rains supporting higher cane output, supplies are expected to improve, allowing more flexibility for ethanol production. Analysts estimate this policy shift, along with the SC ruling, will significantly strengthen earnings visibility for sugar companies.
“The Department of Food and public Distribution (DFPD), in coordination with the Ministry of Petroleum and Natural Gas (MoPNG), shall periodically review the
diversion of Sugar to Ethanol production vis-a-vis production of Sugar in the country so that availability of sugar for domestic consumption is ensured throughout the year,” the notification added.
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