MUMBAI : High sugar exports for the second sugar season (SS; October-September) in a row, coupled with increased supplies of ethanol—and at remunerative prices—for blending with petrol, will improve the operating profitability of integrated sugar mills by 75-100 basis points (bps) to 13-14% this fiscal, said Crisil Ratings on Wednesday.
The announcement by the government to advance the ethanol-petrol blending target of 20% by two years to 2023, could help sustain this momentum over the medium term, Crisil added.
Additionally, sugar closing stocks are expected to decline to their lowest levels in the past four SS-es to 9-9.5 million tonnes (MT) in SS 2020-21, resulting in lower working capital borrowings.
