Domestic sugar prices have risen from ₹38-₹41 per kg in June 2026 to ₹52-₹55 per kg by the end of August. Prices briefly spiked to ₹68 per kg at the ex-factory level, prompting government intervention through 1 million tonnes of duty-free imports, a 15-day stockholding limit for bulk buyers and anti-hoarding measures
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While prices have since cooled, they have not returned to earlier levels, DAM Capital said.
Sugar ex-mill prices have declined around 20% over the past week following the government’s measures to curb the recent spike. The government has allocated 13 lakh tonnes of sugar for dispatch during September 1-15 and directed mills to dispatch the allocated quantities within the stipulated period.
The government has also allowed imports of 1 million tonnes of sugar until October 30. Meanwhile, sugar crushing is expected to begin earlier than usual, between October 15 and 20, with production in October estimated at around 10 lakh tonnes, compared with 4 lakh tonnes in the same month last year.
Imported sugar currently lands and refines at around ₹50 per kg, which the brokerage expects to act as the floor for domestic prices. It expects the 2 million tonnes of sugar that India needs to arrive by March 2027.
Against this backdrop, DAM Capital has raised its sugar realisation assumption for financial year 2027 and 2028 to ₹47 per kg from ₹43-₹44 per kg earlier.
With the hopes of higher realizations, DAM Capital has placed its bets on three companies within the sector, projecting an upside potential of close to 48% from current levels. Here’s a look at the three names:
Triveni Engineering: Buy for a Price Target of ₹415
DAM Capital has a Buy rating on Triveni Engineering with a target price of ₹415 per share. The target implies an upside of around 46% from Friday’s closing price of ₹283.82.
The brokerage said Triveni screens best among its sugar coverage as it has relatively limited exposure to the recent closure-related disruptions.
More than half of Triveni’s distillery capacity can switch to grain, allowing ethanol volumes to grow by 17% to 250 million litres in FY27 at over 80% utilisation.
Crushing has declined 12% over the past two seasons due to Co-0238 infestation. However, more than 75% of its catchment area has been replanted, prompting DAM Capital to conservatively model a 5% increase in crushing.
Higher volumes and improving recovery are expected to drive a 79.5% increase in operating profit to ₹730 crore in the current financial year.
Dalmia Bharat Sugar: Buy For Price Target of ₹710
DAM Capital has a “Buy” rating on Dalmia Bharat Sugar with a target price of ₹710 per share, implying an upside of around 48.5% from Friday’s closing price of ₹477.95.
The brokerage said Dalmia Bharat Sugar holds the cleanest beneficiary position in the current sugar-price environment. The company closed June with 2,30,000 tonnes of inventory carried at ₹36.9 per kg, giving it the lowest cost base in the industry against spot sugar prices above ₹50 per kg. DAM Capital expects this cost advantage to translate directly into the company’s earnings profile for financial year 2027.
The brokerage said the company’s sector-leading recovery should allow it to capture the upper end of the ₹6-₹8 per kg industry spread, while its track record of contracting imports should help it secure a large share of the government’s import programme as well.
Ethanol volumes are expected to fall 14% to 160 million litres in financial year 2027, before the Ramgarh dual-feed conversion restores volumes to 200 million litres. DAM Capital estimates operating profit to grow 54.6% to ₹660 crore in FY27.
Balrampur Chini: Buy For Target of ₹825
DAM Capital has a Buy rating on Balrampur Chini Mills with a target price of ₹825 per share, implying an upside of around 26% from Friday’s close of ₹654.85.
The brokerage called Balrampur Chini the “purest sugar play” in its coverage.
Crushing increased 5% in sugar season 2025-26 and is expected to rise again in SS27, with more than 90% of its catchment area replanted away from Co-0238. This is expected to add volumes as the domestic market remains in deficit.
While distillery volumes are expected to decline roughly 25% to around 200 million litres in FY27, DAM Capital expects the benefit from higher sugar prices to more than offset the decline. It estimates EBITDA to grow by 53.6% in FY27, with PLA commissioning in Q3 FY27 expected to drive a further 23.6% increase in FY28.
Stock movement
Shares of Triveni Engineering were trading around 4% higher at ₹294.99 on Monday, while Dalmia Bharat Sugar was trading 6.5% higher at ₹509.10. Balrampur Chini was the strongest performer among the three, trading 9.5% higher at ₹716.90.
