Pratik Tholiya, SVP, Systematix Institutional Equity, says “with the government allowing the industry to divert some amount of juice towards ethanol, this clearly is a positive move in terms of the profitability that would have happened otherwise if the ban would have remained. So, net-net, this is a positive move from a margin standpoint, from profitability standpoint, from utilisation standpoint.”

 

After the two weeks of confusion, this is a positive move for the sugar companies as they had put up a lot of capacities for ethanol and typically the crushing season is where you use juice to make ethanol. Once the crushing is over, any which way you would have to move to be B-heavy or C-heavy molasses to make ethanol. So, during this period, if you are not allowed to make ethanol by not diverting sugar, that would have left a lot of capacities empty and, of course, it would have impacted your utilisation levels and overall margins.