Sugar Stock Below Rs 50: Bajaj Hindusthan Sugar Registers Breakout

It’s turning out to be a sweet Thursday for the Indian equity markets, not only because the Nifty50 index has hit an all-time high, but also because sugar stocks are sweetening the portfolios of market participants.

Government’s Consideration of MSP Increase

Most of the sugar stocks surged on Thursday after reports emerged that the Government is considering raising the minimum selling price (MSP) of sugar for the upcoming 2024-25 season, commencing on October 1st. The industry has been advocating for the MSP of sugar to be set between 40-41 rupees/kg.

Bajaj Hindusthan Sugar Ltd (BHSL)

One of the darling sugar stocks of D-Street is Bajaj Hindusthan Sugar Ltd (BHSL). BHSL, a part of the ‘Shishir Bajaj Group,’ is Asia’s leading and the world’s fourth-largest integrated sugar company. With an extensive network of 14 mills across Uttar Pradesh in North India, the company has an aggregate sugarcane crushing capacity of 136,000 tonnes crushed per day (TCD). Besides sugar, BHSL is also a leading manufacturer of ethanol. It has six distilleries with the capacity to produce 800 kiloliters per day (KLPD) of industrial alcohol and owns 14 co-generation plants with a power-generating capacity of 449 MW.

Stock Performance and Breakout

Shares of Bajaj Hindusthan Sugar have risen in double digits on Thursday, hitting a fresh 52-week high of Rs 40.85. As the stock moved past the level of Rs 40.40-40.50, it registered a breakout from an almost four-month-long horizontal trendline. Intriguingly, this breakout is accompanied by a surge in volume, with the stock recording the highest single-day volume in the last seven months. The stock has seen an almost four-fold increase in volumes traded compared to its 10-day average volumes.

Recent Rally

The stock is up about 22% for the current week, and for the month of June, the stock has rallied over 30%.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.