DAM Capital on Sugar Sector
Triveni Engineering - BUY, TP Rs415 Screens best because it barely feels that closure
Dalmia Bharat Sugar - BUY, TP Rs710 Holds cleanest beneficiary position
Balrampur Chini - BUY, TP Rs825 Is purest sugar play in coverage
Domestic sugar has repriced from Rs38-41/kg in June-2026 to Rs52-55/kg by end-August, with an ex-factory spike to Rs68/kg that drew government intervention: 1mn tonne of duty-free imports, a 15-day stockholding cap on bulk buyers & anti-hoarding action. Prices cooled but have not gone back down Imported sugar lands and refines at around Rs50/kg, and that cost is now the floor under the market. Nothing cheaper arrives until 2mn tonnes India needs lands, likely by March-2027 Raise sugar realisation for FY27 and FY28 to Rs47/kg from Rs43-44/kg
Triveni Engineering - BUY, TP Rs415 Screens best because it barely feels that closure. More than half its distillery capacity can switch to grain, allowing ethanol volumes to grow 17% to 250mn litres in FY27 at over 80% utilisation. Crushing has fallen 12% over two seasons on Co-0238 infestation, but over 75% of its catchment has been replanted and we conservatively model a 5% uptick in crush. Higher volumes at improving recovery drive 79.5% operating profit growth to Rs7.3bn in FY27.
Dalmia Bharat Sugar - BUY, TP Rs710 Holds cleanest beneficiary position. It closed June with 230kt of inventory carried at Rs36.9/kg, lowest cost base in industry, against a spot market above Rs50/kg, &that gap converts directly into FY27 earnings. Sector-leading recovery earns it upper end of the Rs6-8/kg industry spread, & its import contracting record should win it a large share of programme. Ethanol volumes fall 14% to 160mn litres in FY27 before the Ramgarh dual-feed conversion restores them to 200mn litres Estimate 54.6% operating profit growth to Rs 6.6bn in FY27.
Balrampur Chini - BUY, TP Rs825 Is purest sugar play in coverage. Crushing rose 5% in SS26 and should rise again in SS27, with over 90% of its catchment replanted away from Co-0238, adding volume into a deficit market. Distillery volumes fall roughly 25% to around 200mn litres, but sugar price benefit far outweighs that loss, driving 53.6% EBITDA growth in FY27, with PLA commissioning in Q3FY27 adding 23.6% in FY28.