Davangere Sugar jumps over 7% as crude oil rise fuels ethanol blending hopes

Market analysts attributed the gains to a rebound in crude oil prices, which has renewed focus on India’s ethanol blending programme. The government aims to increase ethanol blending in petrol from the current 13-14% to 22%, creating potential upside for sugar companies involved in ethanol production.

Davangere Sugar produces ethanol from sugarcane molasses and syrup, positioning it to benefit from the policy push. Experts noted that the company’s distillery expansion plans and its UK subsidiary, Aurevant Global, which explores sugar and ethanol opportunities, are reinforcing investor confidence.

In FY26, the company reported revenue of ₹238.77 crore, up 11.1% from ₹214.99 crore in the prior year. Analysts highlighted better capacity utilisation, profitable growth, and disciplined capital allocation as factors that could support a sustained re-rating if translated into shareholder value.

The firm operates an integrated model combining sugar manufacturing, ethanol production, and power cogeneration. Its ethanol facility can process multiple feedstocks including sugar syrup, molasses, and grain, offering flexibility to improve asset utilisation and reduce reliance on sugar price cycles.

Market observers said that if management successfully leverages this operational flexibility to boost throughput and cash generation, it could strengthen the case for a broader reappraisal of the stock.

No official company statement was cited in the report regarding the price movement.