We initiated coverage on the sugar sector with our August 2019 sector report' on the premise of rationalising sugar inventory levels in the country and possibility of significant sugarcane diversion toward producing ethanol. Our view is materialising given sugar inventory levels are coming down from the peak of 14.5 million tonnes (MT) in September 2019 to ~8 MT in September 2021. Further, in the current sugar season, the industry would be diverting (sacrificing) 2 MT of sugar for ethanol production. With the government's aggressive stance on increasing ethanol blending with petrol...