Sugar Q1 Earnings Preview: Positive On Dynamics Of The Industry With Increased Focus On Ethanol: Dolat Capital
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Dolat Capital Report
Government of India’s push to achieve 20% ethanol blending in petrol by the 2025 has been a massive boost for sugar companies who have gone into heavy capex mode to add more distillery capacities to meet the increased ethanol demand.
Higher sacrifice of sugar to produce B-Heavy/ direct Juice ethanol will help in lowering of surplus sugar which in turn would help in keeping the sugar prices firm (currently at Rs 33/kilogram).
To achieve a blending rate of 20% by 2025 there is a need to produce ~850 crore litres of Ethanol with higher Installed capacities of ~1000 crores litres to account for normal losses and partial use of ethanol for alcohol manufacturing.
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