The Indian share market has witnessed selling pressure lately but some stocks have managed to deliver multibagger return to its investors. Shree Renuka Sugars, one of the country’s leading sugar refiners and ethanol producers, is among them. The Mumbai-based sugar company has risen from its 52-week low of ₹9.80 touched on April 23, 2021, to ₹55.50 per share in intraday trade today, logging 466% growth in less than one year. An amount of ₹1 lakh invested in this sugar stock a year ago would have turned into ₹5.7 lakh at present.

As per the share price history of this sugar stock, the scrip hit its 52-week high of ₹59.95 on April 12, 2022. However, after touching the record high the stock saw some trend reversal with stock price falling 1% in the past one week. In the last one month, the stock has surged 46%, while it has risen 79% in year-to-date time. This multibagger stock has given 85% return to its shareholders in last six months, with stock rising from ₹29.35 to ₹55.50. The market capitalisation of the midcap stock stood at 11,664 crore.

On Thursday, shares of Shree Renuka Sugars opened higher for the second straight session at ₹52.60 against previous closing price of ₹52.25 on the BSE. In the first hour of trade, the stock gained as much as 6.2% to hit an intraday high of ₹55.50, in line with broader market. In comparison, the BSE Sensex was trading 432 points higher at 57,470 levels.

Overall, the sugar companies have witnessed strong rally in recent past thanks to improved outlook, with Mawana Sugars and Dalmia Bharat Sugar hitting their respective 52-week high last week. Most of the other sugar companies such as Dwarikesh Sugar Industries, EID Parry, Dhampur Sugar Mills, Triveni Engineering & Industries, and Balrampur Chini Mills traded near their 52-week high.

The surge in demand for sugar stocks can be attributed to optimism about improvement in operational performance and higher sugar realisations.

"FY22 ended with 10% ethanol blending in line with the government target of 20% by 2025. As sugar factories expand distillery capacities, and as oil marketing companies improve their storage capacities and infrastructure, the positive tailwinds with respect to ethanol will likely boost the profitability of integrated sugar companies and that of ethanol plant producers going forward," says S Ranganathan, head of research at LKP Securities.

India is the second-largest producer of sugar in the world after Brazil and is also the largest consumer. Indian sugar industry’s annual output is worth approximately ₹80,000 crore and is an important agro-based sector that impacts rural livelihood of about 50 million sugarcane farmers and around 5 lakh workers directly employed in sugar mills.

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