Ethanol push puts sugar industry in spotlight, says Sudip Bandyopadhyay – News Air Insight

The sugar sector has recently drawn significant investor attention, fueled by the ongoing ethanol blending story. Experts are optimistic about the prospects of this sensitive yet potentially rewarding industry.

Sudip Bandyopadhyay, in an interview with ET Now, emphasised the unique dynamics of the sugarcane market. “First thing, this sugarcane industry and grain, I do not think they are competing. The market is large enough, and the government will definitely ensure that there is a balance. Also, we have to remember that sugarcane is an extremely sensitive commodity and the government keeps monitoring because, on one hand, there are retail prices, on the other hand, there are farmers, and, of course, there is an export angle,a global markets angle. So, they do the balancing act pretty well, and they have to continuously keep doing that, and we have to keep that in min,d number one.”

He also pointed out the volatility inherent in sugar stocks. “As far as the sugar industry is concerned, because of the nature of and the sensitivity of the sugarcane prices, as well as the farmer payments and the retail sugar price, the government keeps changing regulations, guidelines, export quotas and things like that. So, the counters remain volatile and the price keeps moving up and down. So, if as an investor you are able to withstand volatility, then you can come in sugar; otherwise, you should not.”

Despite the fluctuations, Bandyopadhyay remains positive about the industry’s outlook. “As far as the overall industry scenario is concerned, we are positive on sugar at this stage. We believe that there is significant opportunity and valuation upside possible from this industry at this stage. So, one can look at multiple companies, but we do like Eid Parry. You get an exposure to Coromandel International as well through this. So, Eid Parry is our pick in this sector.”

Market analysts highlight that while government interventions and price regulations introduce short-term uncertainty, long-term investors with the ability to navigate these fluctuations may find attractive returns. With stable fundamentals and favourable policy measures, companies like Eid Parry are expected to remain at the forefront of growth in India’s sugar industry.