Shares of Davangere Sugar Company Limited rallied nearly 6.18% during Thursday's intraday trading session amid optimism over ethanol blending and rising crude oil prices. Brent crude stayed above $ 100 per barrel today for the first time in almost six weeks amid continuing tensions between the US and Iran in West Asia.
Davangere Sugar Company stock was trading 6.13% higher during Thursday’s intraday trading session. The sugar stock has declined 52% in six months and around 51.5% in one year.
The recent uptick in the sugar stock coincides with crude oil price rally. Jump in brent crude is likely to support the demand for ethanol blending.
“Sugar stocks are rising as soaring crude oil prices have fueled the demand for ethanol blending. As Davangere Sugar Company Ltd is a sugar company, it is expected to benefit from this, as sugar companies produce ethanol during sugar production. They use the sugar mill to produce ethanol, which is an additional business they run alongside the sugar business. This could be the reason for the buying buzz in the sugar stock,” stated Anuj Gupta, a SEBI-registered market expert.
The stock was trading 6.74% higher at ₹1.9 per share on BSE with a market capitalisation of ₹271.70 crore at 12:55 pm on Thursday. The stock had touched an intraday high of ₹1.90 per share and an intraday low of ₹1.74 per share.