Mumbai: Shares of sugar companies Tuesday saw a strong demand and surged as much as 20 percent on hopes that a fall in sugar output may jack up prices and help them make better realisations.
At close, shares of Shree Renuka Sugars settled for the day with gains of 20 percent at Rs 16.05, while EID Parry rose 9.33 percent to Rs 209.20 and Mawana Sugars jumped 9.95 percent to Rs 23.20 on BSE.
Among others, Sakthi Sugars surged 3.41 percent to Rs 33.40 at BSE, shares of Dwarikesh Sugar soared 4.96 percent to Rs 85.65 and Bajaj Hindusthan Sugar surged 1.15 percent to Rs 22.
According to an ICRA report, India's sugar output is estimated to decline 4.62 percent to 26.8 million tonnes in the 2015-16 marketing year.
Marketmen believe the sugar counter is witnessing strong buying on hopes of improved realisations as shortage of sweetener supply is expected to aid sugar prices and help companies make good realisations.
The ICRA estimate is higher than the government's projection of 26 million tonnes of sugar output this year, but slightly lower than industry body ISMA's estimate of 27 million tonnes for the same period.
The country had produced 28.1 million tonnes of sugar in the 2014-15 marketing year (October-September).
"ICRA expects a decline in the domestic sugar production to 26.8 million tonnes during 2015-16", ICRA's latest report said.
