InvestorQ : Do you expect ethanol blending to be a big trend for sugar companies in India?
diksha shah made post

Do you expect ethanol blending to be a big trend for sugar companies in India?

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Rashi Mehra answered.
1 week ago
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You are right that ethanol is the big trend, but the bigger trend is that sugar industry is changing. Government front-ended 20% ethanol blending target for petrol to 2025. That opens a huge alternate market for sugar companies. Sugar companies in India enjoy competitive margins on ethanol blending. As we have seen in recent quarters, ethanol is meaningfully contributing to the top lines and bottom lines of sugar companies.

As I said earlier, the real story is structural. Just add up the advantages today. There is robust demand, an export push and ethanol blending. Sugar is shifting from being a pure commodity play on demand and supply. Now sugar plays a bigger picture in overall macro equations, including fuel prices. Going ahead, sugar mills worry less about cycles and inventories as sugar is not just about price, but also about other applications.

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