Rally in Sugar Stock
Kya hai Reason??
Nitin Gadkari on 29th Dec 2021,
Nitin Gadkari has advised the Automobile Manufacturers in India, to accelerate manufacturing:
– Flex Fuel Vehicles (FFV)
– Flex Fuel Strong Hybrid Electric Vehicles (FFV-SHEV) complying with BS-6 Norms
Within a time frame of 6 months.
What is FFV?
Flex Fuel Vehicles are next generation vehicles which
– Runs on fuel which can be a combination of petrol and ethanol or solely on ethanol.
What is FFV – SHEV?
FFV – SHEV are next generation vehicles which can
– Run solely on electric or petrol modes.
Production Linked Incentive (PLI) Scheme has been introduced for this purpose.
Significance of this move:
- Reduction in demand of petroleum products.
- Increase in demand of ethanol which increases revenue of Sugarcane farmers.
- Ethanol produces mainly by sugar companies which can give a big boost to this dead industry.
- Reduces pollution
Impact on Stocks:
Blending of ethanol will increase sugar price (expected 16% as per CRISIL) which will be beneficial for sugar companies in two ways.
First, there revenue will be increased due to high sugar prices.
Secondly, increase in demand of ethanol creates an additional and regular source of revenue for sugar companies.
- Balrampur Chini (I have invested in this stock)
- Rana Sugar (Penny Stock – High Risk)
Above mentioned move of government is a long process. It will take time. So, invest in 5 to 10 installment within a time frame of 6 months. Every dip of 5 to 10 percent is a buying opportunity.
Hope, you can grab the advantage of rally in sugar stock.