According to a Ministry of Finance notification, the government has removed excise duty on petrol blended with ethanol content of 22% (E22), 25% (E25), 27% (E27), and 30% (E30).

Sugar stocks in focus: Sugar stocks were upbeat in trading on Thursday, even as broader markets remained weak amid renewed tensions in West Asia. Shares of sugar companies gained as much as 5 per cent in intraday after the government decided to extend excise duty exemptions for petrol blended with higher levels of ethanol.

The move is seen as supportive of ethanol blending demand, which could benefit sugar companies. The latest decision also paves the way for the rollout of fuel grades beyond the current E20 standard.

Among individual stocks, Dhampur Bio Organics and SBEC Sugar advanced 5 per cent each, hitting their respective upper circuits of ₹112.42 and ₹66.32. Dwarikesh Sugar Industries ended 3.4 per cent higher at ₹45.06.

Triveni Engineering & Industries and Balrampur Chini Mills rose more than 2 per cent each to settle at ₹382.60 and ₹548.55, respectively. Dhampur Sugar Mills gained 1.3 per cent to close at ₹143.17. Other counters like Dalmia Bharat Sugar, Bajaj Hindusthan Sugar, and EID Parry India bucked the trend to end the session in negative territory.

No excise duty on E22-E30 petrol blends

According to a Ministry of Finance notification, the government has removed excise duty on petrol blended with ethanol content of 22 per cent (E22), 25 per cent (E25), 27 per cent (E27), and 30 per cent (E30). also marks the first major tax incentive for ethanol blends above E20.

The decision is aimed at supporting India’s ethanol blending programme, which seeks to reduce dependence on crude oil. India imports more than 85 per cent of its crude oil requirements.

‘Structural positive for sugar sector’

Analysts said that the government is keen on increasing ethanol blending due to the West Asia crisis, and any steps to increase the sourcing price of ethanol by OMCs can act as an earnings catalyst for the integrated sugar millers.

Ponmudi R, CEO, Enrich Money, said that the excise duty waiver is a structural positive for the sugar sector as it improves long-term demand visibility for ethanol producers. Higher ethanol offtake can support sugar mill profitability, reduce dependence on volatile sugar prices, and improve cash flows through a better product mix.

Balrampur Chini, Triveni Engineering, EID Parry top picks

Among listed players, Ponmudi said that his preferred picks remain Balrampur Chini Mills, Triveni Engineering & Industries and EID Parry due to their strong ethanol capacities, integrated business models and ability to benefit from the next phase of blending growth.

“While sugar export restrictions remain a near-term overhang, the market is likely to focus more on ethanol-led earnings visibility and capacity expansion opportunities over the medium term,” he said.

Sunny Agrawal, head of fundamental research at SBI Securities, said that the government is incentivising consumers by offering them tax benefits in the form of a waiver of excise duty. This clearly indicates that the government is in favour of ensuring the consumption of higher ethanol in the economy, and this should act as a strong industry tailwind for ethanol players.

Sunny added that Balrampur Chini Mills remains his top pick. “With low system inventory, sugar prices are likely to remain firm. Balrampur has the capability to produce 34-35 crore litres of ethanol, and any price increase offered by the government in the upcoming tender in the month of November 2026 can act as a big earnings swing for the company. In the longer run, commercialisation of the PLA plant will add a better margin product to the company’s product suite and will provide stability in terms of earnings. Relatively leaner balance sheet of Balrampur offers comfort in the heavily regulated sector.”