Sugar rush: The five sweetest stocks to sample in 2025

What’s interesting is how the sector is evolving. Historically cyclical, the industry is undergoing a structural change owing to aggressive government initiatives and increasing demand for ethanol.

The government’s ethanol blending programme, aimed at reducing crude oil imports and carbon emissions, has emerged as a game-changer, encouraging sugar mills to divert excess sugarcane towards ethanol production.

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With several companies expanding capacity and diversifying smartly, there are some exciting opportunities shaping up for investors.

Here are five sugar stocks to watch out for in 2025. These have been filtered using Equitymaster's powerful stock screener – top sugar stocks in India.

#1 EID Parry

A subsidiary of the Murugappa Group, EID Parry was the first company to manufacture sugar in India, back in 1842, making it one of the oldest sugar producers in the world.

Today, EID Parry is among the country’s leading sugar manufacturers, operating six sugar plants and one standalone distillery across south India. These state-of-the-art facilities have a combined crushing capacity of 40,300 tonnes of cane crushed per day (TCD), a co-generation capacity of 140 MW, and a distillery capacity of 417 kilo litres per day (KLPD).

The company also converts molasses, a byproduct of sugar production, into ethanol. In recent years, both co-generation and ethanol have emerged as strong revenue streams, with ethanol poised to become a major growth driver for the sugar business. Take a look.

On the financial front, the company has seen decent growth. Revenue grew from ₹17,130 crore in 2020 to ₹29,410 crore in 2024, at a compound annual growth rate (CAGR) of about 14.5%. Net profit increased from ₹890 crore in 2020 to ₹1,620 crore in 2024, at a CAGR of about 16.1%. Return on equity (RoE) and return on capital employed (RoCE) averaged 26% and 40.4%, respectively, over this period.The company plans to further expand its distillery capacity.

#2 Balrampur Chini Mills

It is among the leading sugar manufacturers in India, with a crushing capacity of 80,000 TCD across 10 plants.It sells sugar and its by-products, as well as ethanol and ethyl alcohol. It also sells co-generated power, and manufactures and sells agricultural fertilisers.The company is also diversifying into polylactic acid (PLA) production, establishing India’s first biopolymer plant.

Revenue grew from ₹4,740 crore in 2020 to ₹5,590 crore in 2024, at a CAGR of 4.2%. Net profit improved marginally from ₹510 crore in 2020 to ₹530 crore in 2024, at a CAGR of just 0.7%. The average RoE and RoCE for the same period were 16.4% and 20.7%, respectively.

To enhance profitability, Balrampur aims to create new revenue streams by introducing more value-added products.

#3 Triveni Engineering

Triveni is one of India's largest sugar manufacturers, with eight sugar plants in UP, seven of which are FSSC 22000 certified. It produces refined sugar, multi-grade white crystal sugar, pharmaceutical-grade sugar,potable alcohol, fuel-ethanol, and power from bagasse. It supplies sugar to household consumers and bulk consumers.

In FY24 the company sold 855,000 tons of sugar, down 16% from 1.023 million tons in FY23.

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Over the past five years, net sales have grown at a CAGR of 6.4% while net profit has grown at a CAGR of 12.8%. The average RoE and RoCE for the past five-year period were 16.4% and 20.7%, respectively. Going forward, the company plans to expand its alcohol business.

#4 Dalmia Bharat Sugar

A part of the Dalmia Bharat Group, this is among the youngest and largest sugar companies in India. It operates five sugar manufacturing units across Maharashtra and Uttar Pradesh, as well as five co-generation power plants with a total installed capacity of 126 MW.

Over the years, Dalmia Bharat Sugar has built strong ties with leading FMCG giants. It’s a preferred supplier to companies such as Coca-Cola, PepsiCo, Mondelez, Perfetti, Britannia and Walmart India. It also exports sugar to several countries including Indonesia, Malaysia, Bangladesh, China, Sri Lanka, Nepal and Bhutan.

Over the past five years, net sales have grown at a 7.5% CAGR while net profit has grown at a 9.2% CAGR. The average RoE and RoCE for the same period were 11.3% and 15.3%, respectively.

Going forward, the company plans to expand its ethanol manufacturing capacity.

#5 Uttam Sugar Mills

Uttam Sugar Mills is another of India's leading sugar producers, with operations across the country.

It is a vertically integrated company, with operations spanning the entire value chain of sugar production, from sugarcane cultivation to refining and packaging. It produces a range of sugar products including granulated sugar, icing sugar and jaggery.

It also manufactures ethanol and produces power as well as organic manure as a by-product. Its sugar brands include Uttam Gold, Uttam Premium and Uttam Classic.

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Over the past five years, net sales have grown at a 10.8% CAGR while net profit has grown at a 17.9% CAGR. RoE and RoCE averaged 21.1% and 36.5%, respectively, over this period. Going forward, the company plans to increase its production.

Conclusion

With the 2025 monsoon expected to be favourable, and water levels in good shape, farmers in states such as Maharashtra and Karnataka are already ramping up sugarcane planting. In the north, new and better cane varieties are being adopted, which should boost yields and recovery rates.

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Strong industry performance is also expected to be supported by the government's approval for a million tons of sugar exports this year.

While the stage looks set for a strong performance, it’s always wise to dig a little deeper and do your homework before making any decisions.

Happy investing!

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such.

This article is syndicated from Equitymaster.com