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Sugar company stocks were attracting investors on Monday, reportedly on the news that oil companies have opened a new tender for supply of ethanol. Besides, petroleum retailers have begun supplying ethanol-mixed petrol all over Maharashtra and Goa since last month.

Until now, the supply was restricted to a few towns and cities. Ethanol is produced from molasses, a by-product of sugar mills that usually went waste. Mandatory introduction of ethanol-blended petrol, which is said to be environment-friendly, in nine States, has opened up a new market and a source of more revenue for sugar mills.

At present ethanol prices are ruling near Rs 22-23 per litre. According to market sources, sugar companies are likely to immensely benefit in the current quarter from ethanol sales. Stocks of major producers such as Bannariamman Sugar, Balrampur Chini, Rajshree Sugar, Dhampur Sugar, and Sakthi Sugar all rose between 10 and 20 per cent today. Volumes too surged in these counters.

Cheap buy

The stock of oil refiner MRPL almost hit the upper circuit on heavy buying by institutional investors. According to the market grapevine, the company that has been wallowing in losses for a while now is expected to make a cash profit this year. It is also the cheapest refinery stock available in the market today, a dealer who was active at the counter said.

Oil refining and marketing sector is hot in the stock market now as many fund-managers and brokers feel that it has a lot of steam left in spite of its phenomenal rise over the past few months.

Besides, the Supreme Court is expected to take up the issue of disinvestment of public sector companies on November 17. The Government has approached the Court seeking certain clarifications on its ruling that oil PSUs cannot be sold without Parliament approval.

The MRPL stock closed Monday at Rs 47.90, nearly 18 per cent higher than its previous close on the BSE. While about 68 lakh shares were traded on the exchange, on the NSE, which had a short trading session due to a technical snag, about 73 lakh shares were traded.

Dinesh Narayanan

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