Great potential of DWARIKESH to become leader in ETHANOL sector-
India, the second largest producer of sugar in the world, is more than self-reliant for its sugar consumption. Countries that imported the highest dollar value worth of sugar from India in 2020 are United States, Indonesia, Italy, Algeria, Bangladesh & Malaysia.
Drivers of sugar demand in India-
1. Rising population
2. Growing chocolate demand
3. Rise in confectionery sales
4. Robust soft drinks consumption
5. Government initiatives
Overview of ethanol sector and government initiatives-
Ethanol is a major by-product for integrated sugar mills which finds downstream applications among oil marketing companies, who blend ethanol with fuel. The average ethanol blending rate in India was estimated at ~7.43% in the last five months of ESY 2020-21 against 4.5% in 2019-20. India could need about 1,000 crore litre of ethanol for doping in petrol by 2030 with a view to reduce dependence on imports for meeting oil needs.
The Government plans to double ethanol production and enhance the blending of ethanol and petrol to moderate oil imports. The country intends to increase ethanol production capacity from 4.26 billion litres to 6.60 billion litres from sugarcane and 5.4 billion litres from grain by 2025 to address the expected demand of 12 billion litres. The government approved a scheme allocating 460 crore to increase ethanol distillation capacity.
Sugar industry overview-
Uttar Pradesh is the largest sugarcane producer in the country, accounting for ~51% of the total cultivated area, ~50% of the crop and 35% of sugar production. About one-fifth of India’s sugarcane mill in the state. Sugar mills in Uttar Pradesh are estimated to have diverted 6.74 lakh tones sugar through B-heavy molasses and sugarcane juice for ethanol production this season against 3.70 lakh tones in 2019-20. Uttar Pradesh, with an annual ethanol production capacity of 1.4 billion litres, emerged as India’s largest ethanol producer.
FUNDAMENTAL ANALYSIS –
Dwarikesh Sugar Industries LTD is a company, which is primarily engaged in manufacture of sugar and allied products. The Company is also involved in the production of power and ethanol/industrial alcohol.
KEY POINTS –
1. Good quarterly results
2. Constant Increase in revenues and profits y-o-y.
3. Increase in foreign intuitions stake
4. Company is spending lot of capital in technologies and machineries for scaling production of
Sugar and ethanol.
5. Good dividend yield
6. Company is growing and planning to align their strategy with government policies.
7. no any red flags in company’s financials and fundamentals .
TECHNICAL ANALYSIS-
Stock just break the supply zone on weekly chart and as we can see on daily chart
We can see some kind of retracement and pullback from supply zone which turns out to be demand
Zone from now onwards.
On weekly chart we can see a kind of bullish dragon fly candle which indicates stock has massive
Upward potential.
Overall conclusion is we can bet on this stock on green environment theme for long term horizon.
It will be a good buy if we can accumulate this stock now or near demand zone ( which is around 85
To 75) as long term investment.
You can search the fundamentals and financials of company on tickertape platform.
This study is for education purpose only .
Drivers of sugar demand in India-
1. Rising population
2. Growing chocolate demand
3. Rise in confectionery sales
4. Robust soft drinks consumption
5. Government initiatives
Overview of ethanol sector and government initiatives-
Ethanol is a major by-product for integrated sugar mills which finds downstream applications among oil marketing companies, who blend ethanol with fuel. The average ethanol blending rate in India was estimated at ~7.43% in the last five months of ESY 2020-21 against 4.5% in 2019-20. India could need about 1,000 crore litre of ethanol for doping in petrol by 2030 with a view to reduce dependence on imports for meeting oil needs.
The Government plans to double ethanol production and enhance the blending of ethanol and petrol to moderate oil imports. The country intends to increase ethanol production capacity from 4.26 billion litres to 6.60 billion litres from sugarcane and 5.4 billion litres from grain by 2025 to address the expected demand of 12 billion litres. The government approved a scheme allocating 460 crore to increase ethanol distillation capacity.
Sugar industry overview-
Uttar Pradesh is the largest sugarcane producer in the country, accounting for ~51% of the total cultivated area, ~50% of the crop and 35% of sugar production. About one-fifth of India’s sugarcane mill in the state. Sugar mills in Uttar Pradesh are estimated to have diverted 6.74 lakh tones sugar through B-heavy molasses and sugarcane juice for ethanol production this season against 3.70 lakh tones in 2019-20. Uttar Pradesh, with an annual ethanol production capacity of 1.4 billion litres, emerged as India’s largest ethanol producer.
FUNDAMENTAL ANALYSIS –
Dwarikesh Sugar Industries LTD is a company, which is primarily engaged in manufacture of sugar and allied products. The Company is also involved in the production of power and ethanol/industrial alcohol.
KEY POINTS –
1. Good quarterly results
2. Constant Increase in revenues and profits y-o-y.
3. Increase in foreign intuitions stake
4. Company is spending lot of capital in technologies and machineries for scaling production of
Sugar and ethanol.
5. Good dividend yield
6. Company is growing and planning to align their strategy with government policies.
7. no any red flags in company’s financials and fundamentals .
TECHNICAL ANALYSIS-
Stock just break the supply zone on weekly chart and as we can see on daily chart
We can see some kind of retracement and pullback from supply zone which turns out to be demand
Zone from now onwards.
On weekly chart we can see a kind of bullish dragon fly candle which indicates stock has massive
Upward potential.
Overall conclusion is we can bet on this stock on green environment theme for long term horizon.
It will be a good buy if we can accumulate this stock now or near demand zone ( which is around 85
To 75) as long term investment.
You can search the fundamentals and financials of company on tickertape platform.
This study is for education purpose only .