Best Sugar Stocks in India

Sugar stocks are shares of companies involved in sugar production, processing, and distribution, offering diversification opportunities and growth potential. With strong fundamentals, increasing demand, government support, and technological advancements driving growth, investing in sugar sector stocks can provide resilience in uncertain market conditions. India, the world's largest sugar consumer and producer, presents an opportunity for investors to tap into the long-term growth prospects of the sugar industry. However, investors must navigate risks such as fluctuating commodity prices and regulatory shifts.

In this article, we will look at best sugar stocks, and variables impacting sugar production and supply, and, using a variety of basic indicators, determine the top sugar stocks in India.

What are Sugar Stocks? 

Sugar production in India increased by 3.69% to 120.7 lakh tonnes during the October-December quarter of this year, according to the Indian Sugar Mills Association (ISMA). The majority of sugar production comes from sugarcane extraction, with 80% coming from sugarcane extraction and 20% from sugar beet. Sugar prices are significantly influenced by factors such as monsoon season dependence, payment delays, drought conditions, government policies, ancillary product prices, and competition and export opportunities. The price of sugar is also influenced by ancillary products like animal feed and ethanol.

Best Sugar Company Based on the Market Cap 

Here are the best 10 sugar stocks based on the market cap:

Note: This list of Sugar Stocks contains data updated as of March 2024. However, it's important to conduct thorough research before making any investment decisions in these stocks.

Top 10 Best Sugar Stocks Based on the Net Profit Margin 

Here are the top 10 sugar stocks based on net profit margin:

Sakthi Sugars Ltd: 

With a market capitalization of Rs. 453.41 crores and a close price of Rs. 35.70, Sakthi Sugars Ltd boasts an impressive net profit margin of 27.41%. The company has performed well in terms of profitability compared to its peers.

Triveni Engineering and Industries Ltd: 

Triveni Engineering and Industries Ltd, with a market cap of Rs. 7,302.44 crores and a close price of Rs. 331.65, has a net profit margin of 25.18%. The company has consistently delivered strong financial results, making it an attractive investment option in the sugar industry.

KCP Sugar and Industries Corp Ltd:

Despite a relatively smaller market cap of Rs. 458.08 crores and a close price of Rs. 38.10, KCP Sugar and Industries Corp Ltd maintain a healthy net profit margin of 15.30%. The company has shown resilience in its profitability metrics.

Ponni Sugars (Erode) Ltd:

Ponni Sugars (Erode) Ltd, with a market cap of Rs. 372.10 crores and a close price of Rs. 442.40, has a net profit margin of 8.51%. While not as high as some of its competitors, Ponni Sugars remains a solid player in the industry.

Gayatri Sugars Ltd:

Gayatri Sugars Ltd, with a market cap of Rs. 146.06 crores and a close price of Rs. 22.09, has a net profit margin of 8.27%. Despite its smaller size, the company has managed to maintain a respectable level of profitability.

Dalmia Bharat Sugar and Industries Ltd:

Dalmia Bharat Sugar and Industries Ltd, with a market cap of Rs. 3,225.84 crores and a close price of Rs. 391.10, has a net profit margin of 7.51%. The company's financial performance reflects its strong position in the sugar industry.

Kothari Sugars and Chemicals Ltd:

Kothari Sugars and Chemicals Ltd, with a market cap of Rs. 501.06 crores and a close price of Rs. 59.40, has a net profit margin of 6.75%. The company's profitability is steady, making it a reliable investment option.

Indian Sucrose Ltd:

Indian Sucrose Ltd, with a market cap of Rs. 167.36 crores and a close price of Rs. 96.00, has a net profit margin of 6.49%. Despite facing challenges, the company has managed to maintain a decent level of profitability.

Dhampur Sugar Mills Ltd:

Dhampur Sugar Mills Ltd, with a market cap of Rs. 1,644.75 crores and a close price of Rs. 247.20, has a net profit margin of 6.36%. The company's financial performance reflects its strong position in the sugar industry.

Balrampur Chini Mills Ltd:

Balrampur Chini Mills Ltd, with a market cap of Rs. 7,520.20 crores and a close price of Rs. 371.85, has a net profit margin of 5.99%. As one of the leading players in the sugar industry, Balrampur Chini Mills consistently delivers solid financial results.

Top 10 Best Sugar Stocks Based on Return on Equity

Here is a brief description of the top 10 sugar stocks based on return on equity (ROE):

Triveni Engineering and Industries Ltd (TEIL):

With a market cap of Rs. 7,302.44 crores and a close price of Rs. 331.65, Triveni Engineering boasts an impressive return on equity of 78.28%.

Ugar Sugar Works Ltd: 

Ugar Sugar Works, with a market cap of Rs. 946.13 crores and a close price of Rs. 84.10, exhibits a strong return on equity of 60.16%.

Uttam Sugar Mills Ltd:

Uttam Sugar Mills, with a market cap of Rs. 1,333.88 crores and a close price of Rs. 342.70, has a return on equity of 23.79%.

Indian Sucrose Ltd:

Indian Sucrose, with a market cap of Rs. 167.36 crores and a close price of Rs. 96.00, shows a return on equity of 18.00%.

Kothari Sugars and Chemicals Ltd:

With a market cap of Rs. 501.06 crores and a close price of Rs. 59.40, Kothari Sugars demonstrates a return on equity of 17.56%.

KCP Sugar and Industries Corp Ltd:

KCP Sugar, with a market cap of Rs. 458.08 crores and a close price of Rs. 38.10, has a return on equity of 16.64%.

Dhampur Sugar Mills Ltd:

Dhampur Sugar Mills, boasting a market cap of Rs. 1,644.75 crores and a close price of Rs. 247.20, displays a return on equity of 16.34%.

Dollex Agrotech Ltd:

Dollex Agrotech, with a market cap of Rs. 124.72 crores and a close price of Rs. 48.85, reports a return on equity of 15.95%.

Dwarikesh Sugar Industries Ltd:

Dwarikesh Sugar Industries, with a market cap of Rs. 1,527.12 crores and a close price of Rs. 80.40, demonstrates a return on equity of 14.83%.

Rana Sugars Ltd:

Rana Sugars, with a market cap of Rs. 377.01 crores and a close price of Rs. 24.95, shows a return on equity of 12.57%.

Best Sugar Stocks in India for Long-term (5-yr CAGR)

Here are the top 10 sugar stocks in India for long term:

Triveni Engineering and Industries Ltd:

With a market cap of Rs. 7,302.44 crores and a close price of Rs. 331.65, Triveni Engineering boasts a robust Return on Equity (ROE) of 78.28%, making it a strong contender for long-term investment.

Ugar Sugar Works Ltd: 

Despite its smaller market cap of Rs. 946.13 crores, Ugar Sugar Works demonstrates a promising close price of Rs. 84.1 and a commendable Return on Equity (ROE) of 60.16%, suggesting potential for long-term growth.

Uttam Sugar Mills Ltd:

Uttam Sugar Mills, with a market cap of Rs. 1,333.88 crores and a close price of Rs. 342.7, exhibits a respectable Return on Equity (ROE) of 23.79%, positioning it as a viable option for investors seeking sustainable returns over the long term.

Indian Sucrose Ltd: 

Despite its modest market cap of Rs. 167.36 crores, Indian Sucrose Ltd displays a close price of Rs. 96 and a reasonable Return on Equity (ROE) of 18.00%, indicating potential for steady growth over five years.

Kothari Sugars and Chemicals Ltd:

With a market cap of Rs. 501.06 crores and a close price of Rs. 59.4, Kothari Sugars and Chemicals Ltd maintains an impressive Return on Equity (ROE) of 17.56%, making it an attractive option for long-term investors seeking stable returns.

KCP Sugar and Industries Corp Ltd:

Despite its market cap of Rs. 458.08 crores, KCP Sugar and Industries Corp Ltd offers a modest close price of Rs. 38.1 and a reasonable Return on Equity (ROE) of 16.64%, indicating potential for sustained growth over the long term.

Dhampur Sugar Mills Ltd:

With a market cap of Rs. 1,644.75 crores and a close price of Rs. 247.2, Dhampur Sugar Mills Ltd exhibits a respectable Return on Equity (ROE) of 16.34%, positioning it as a strong contender for long-term investment strategies.

Dollex Agrotech Ltd:

Despite its smaller market cap of Rs. 124.72 crores, Dollex Agrotech Ltd showcases a close price of Rs. 48.85 and a commendable Return on Equity (ROE) of 15.95%, suggesting potential for sustained growth over a five-year horizon.

Dwarikesh Sugar Industries Ltd:

With a market cap of Rs. 1,527.12 crores and a close price of Rs. 80.4, Dwarikesh Sugar Industries Ltd demonstrates a respectable Return on Equity (ROE) of 14.83%, making it an attractive choice for long-term investors seeking steady returns.

Rana Sugars Ltd:

Despite its smaller market cap of Rs. 377.01 crores, Rana Sugars Ltd presents a modest close price of Rs. 24.95 and a reasonable Return on Equity (ROE) of 12.57%, indicating potential for gradual growth over the long term.

Benefits of Investing in Sugar Stocks

The following are the benefits of investing in sugar stock:

• Diversification: Adds exposure to an industry not directly correlated to the broader market, reducing overall portfolio risk and potentially enhancing returns.
• Growth Potential: Significant growth opportunity due to increasing demand for sugar and sugar-based products.
• Resilience: The sugar sector remains relatively resilient, providing a stable source of returns during market volatility.
• Value Opportunities: Undervalued PSU sugar stocks offer potential capital appreciation over the long term.
• Defensive Characteristics: PSU sugar stocks provide defensive characteristics, providing a stable revenue source during economic uncertainty.

Risk Factors to Consider Before Investing in Sugar Stocks 

The following are the key considerations:

• Market Conditions: Understanding global commodity prices and demand dynamics is crucial for informed investment decisions.
• Supply and Demand Dynamics: Understanding factors influencing supply and demand can predict future sugar stock price movements.
• Government Policies: Understanding subsidies, tariffs, and trade agreements is crucial for penny sugar stocks in India.
• Financial Performance: Evaluating a government sugar company's financial performance, including revenue growth, profit margins, and debt free sugar stocks, is essential.
• Competitive Landscape: Understanding a company's competitive position is crucial for informed investment decisions.

Disclaimer: All the stock prices, market capitalization, net profits, and P/E ratios mentioned above are accurate as of March 2024. However, it's important to conduct thorough research before making any investment decisions in these stocks.

Conclusion

The future of sugar stocks in India looks promising, making investing in these stocks a rewarding experience for investors who understand the sector and its performance factors. Modern investment products can save time and provide a quick start, but it's advisable to conduct research and due diligence before making any investment decisions. So start your investment journey with a reliable online investment app today.