Best Ethanol Stocks in India 2024
Ethanol is a widely known fuel additive that has been used all over the world.
Ethanol mixed with petrol in a 90:10 ratio helps in reducing tailpipe emissions, leading to fewer carbon emissions. Due to this, the government has made it mandatory to use this ratio in blended fuel.
Further, the Indian Government is planning to increase the above-mentioned ratio of 90:10 to 90:20 in the coming future. This would skyrocket the ethanol demand and its prices.
As a result, the stock market has shown a keen interest in ethanol-producing companies. This has led to increasing ethanol share prices of these companies which are now listed on stock exchanges.
It will not only provide a tremendous opportunity for all the sugar manufacturers but also investors like you. And if you are a fellow investor, you have come to the right place.
In this blog, we will explore the Indian ethanol stocks and also get a brief idea about these stocks to help you make the right decision.
First, let us answer a few burning questions you might have.
What is Ethanol?
Ethanol is a renewable fuel made from plant materials. It can be produced by fermenting crops with high sugar content such as sugarcane, sugar beets, and grains like corn, sorghum, and barley.
Financial Metrics for Stocks
Below are some of the key financial metrics to analyze the above-mentioned stocks:
Stock Name | Dividend Yield | Net Profit(Rs Cr) | Return on Equity(%) | Return on Capital Employed(%) | Net Cash Flow(Rs Cr) | Market Cap(Rs Cr) | Book Value(Rs) | High Low | Debt | D/E Ratio | P/E Ratio | Piotriski F-Score |
Shree Renuka Sugars Ltd | 0.00 % | -171.70 | 0 | 9.41 | 145 | 10,418.96 | -5.59 | 57.2 / 39.3 | 5,568.65 | -2.81 | 6 | |
Bajaj Hindusthan Sugar Ltd(BHSL) | 0.00 % | 20 | -4.04 % | 0.91 % | -29 | 3,008.18 | 33.1 | 40.5 / 13.2 | 4,303.29 | 0.97 | 5 | |
Dhampur Sugar Mills Ltd(DSML) | 2.13 % | 158 | 16.6 % | 15.2 % | -6 | 1,540 | 159 | 743.88 | 0.7 | 10.97 | 7 | |
Dwarikesh Sugar Industries Ltd | 2.69 % | 105 | 14.9 % | 15.5 % | 0 | 1,390 | 42.0 | 110 / 67.4 | 374.67 | 13.0 | 8 | |
Balrampur Chini Mills Limited | 0.77 % | 284 | 10.0 % | 10.42 | 0 | 7,822 | 156 | 486 / 343 | 1,879.61 | 0.65 | 13.4 | 5 |
Triveni Engineering and Industries Ltd | 0.86 % | 1,792 | 23.3 % | 17.53 | 49 | 7,991 | 123 | 417 / 261 | 929.26 | 0.34 | 18.8 | 6 |
EID-Parry (India) | 1.52 % | 1,828 | 16.2 % | 27.4 % | 661 | 11,182 | 375 | 664 / 452 | 1,617.84 | 0.2 | 4 | |
Dalmia Bharat Sugar and Industries Limited | 1.02 % | 250 | 10.5 % | 12.3 % | 3,177 | 292 | 490 / 338 | 3,855.00 | 0.35 | 12.8 | 7 |
Note: This blog is only for informational purposes; we are not SEBI registered, and we are not promoting any company or pushing you to buy stocks of a specific company; please do your research before purchasing the stocks.
These are some key financial metrics through which you can get a complete picture of a company’s financial health.
Remember: Don’t rely solely on one metric. Analyze a combination of these factors.
Overview of Top Ethanol Stocks for Investment
Here is a quick overview of the top ethanol shares in India as mentioned above.
1. Shree Renuka Sugars Ltd
Shree Renuka Sugars, based in Mumbai is frequently on the list of the best ethanol stocks. The firm not only produces sugar but refines and trades it. It also produces ethanol and co-generates electricity. Its segments are refining sugar, co-generating electricity, distillery for ethanol, sugar milling, etc.
Aiming to increase their ethanol production capacity, they have recently expanded to 1,250 kilolitres per day.
2. Bajaj Hindusthan Sugar Ltd(BHSL)
Bajaj Hindusthan Sugar produces power, sugar, as well as alcohol. It is the fourth largest sugar producer. It is based in Maharashtra but it also operates 14 facilities in Uttar Pradesh.
The prestigious company has become a pioneer in the sugar industries of Asia and India. It has a combined sugarcane crushing capacity of 800 kiloliters per day (KLD) and can crush 1,36,000 tonnes of sugarcane per day.
3. Dhampur Sugar Mills Ltd(DSML)
In May 1933, the Goel family of Bareilly, Uttar Pradesh, established Dhampur Sugar Mills Limited (DSML).
DSML manufactures and sells sugar, chemicals such as ethyl ethanol, potable spirits, and co-generated power. They have implemented a state-of-the-art distillery system to produce high-quality ethanol.
4. Dwarikesh Sugar Industries Ltd
Incorporated in the year 1993, Dwarikesh Sugar Industries Limited is a diverse industrial company based in India. They are operating under the brand name Bundki.
They have three segments: sugar, co-generation, and distillery. It focuses on producing sugar, ethanol, power, sanitizer, bagasse, fertilizers, pesticides, molasses, and many other products.
5. Balrampur Chini Mills Limited
Balrampur Chini Mills Limited was established in 1975 and is headquartered in West Bengal. It produces sugar, alcohol, ethanol, molasses, bagasse, and organic manure.
They have a distillery capacity of 1,050 kilolitres per day. The company operates 24 facilities across 10 locations. They have a strong presence in Uttar Pradesh, which is the leading sugarcane-producing state in India.
6. Triveni Engineering and Industries Ltd
Triveni Engg was founded in 1932 in Noida. The firm produces ethanol and sugar and co-generates and transmits power. It is the second-largest producer of sugar in India.
According to the news, the company aims to increase its ethanol capacity from 660 kiloliters to 1,100 kiloliters per day.
7. EID-Parry (India)
E I D-Parry (India) Ltd is a leading player in the Indian sugar export industry. It is involved in the manufacture and sale of sugar, bio-pesticides, and nutraceuticals. It is based in Chennai and was started as a part of the ₹570 billion Murugappa Group.
It operates 6 sugar plants and one standalone distillery across South India. It makes use of cutting-edge facilities for sugar crushing, co-generation, and distillation.
8. Dalmia Bharat Sugar and Industries Limited
Dalmia Bharat Sugar and Industries Limited was founded in 1939. Apart from producing sugar, it also produces power, industrial alcohol, and other products.
It operates several alcohol distilleries and sugar mills across the country.
Insights into the Indian Ethanol Market
Now that we have explored these stocks in brief, let’s try to understand the sudden surge in ethanol production in India. India is aiming to achieve 20% ethanol blending in petrol by 2025.
This ambitious target has created a surge in demand for ethanol, and thereby ethanol stocks. Let’s try to understand how it all started.
Government support: The Indian government has been promoting ethanol as a fuel additive so we are less dependent on crude oil. That’s why the government has introduced financial assistance to ethanol-producing companies.
Ethanol is a renewable fuel: Ethanol is produced from plant matter, making it a renewable fuel source. As it is a clean-burning fuel, it is less harmful than other fuels emitting greenhouse gases and pollutants within a specified limit.
Import Reduction: Increased ethanol blending reduces dependence on imported oil, saving foreign exchange.
Ethanol stocks are on the rise: The stock market has shown a keen interest in ethanol stocks. That’s why the ethanol stock prices in India have risen significantly over the years and are expected to be more on the rise soon.
Investors must keep in mind that investing always comes with risks involved. But with thorough research, you can minimize them and make the most of your investments. That’s why we have also come up with some tips to choose the right ethanol stocks.
Tips to choose the right Ethanol Stocks
Here are some pointers to guide your research:
Financial Performance: Analyze the company’s financial health based on the metrics mentioned earlier. Look for companies that are profitable and have manageable debts.
Management Expertise: Research the company’s management team. Ensure they have a good track record in the ethanol industry.
Government Policies: Try to know if the government helps with subsidies and mandates for ethanol production. This will highly impact the company and it’s better to get stocks of companies that align well with these policies.
Supply Chain Stability: Companies need to have a stable supply of raw materials to keep their production seamless.
Environmental Compliance: Ensure that the companies are following environmental regulations. Non-compliance can lead to fines and damage to reputation.
Diversification: Look for companies that have other segments other than ethanol production. This will provide stability against market volatility in the ethanol sector.
Analyst Ratings and Reports: Always refer to analyst ratings and research reports. This will give you an expert perspective on the stock’s potential.
Conclusion
In this article, we have discussed the top ethanol producers who also represent the top ethanol stocks in India.
With the right approach, ethanol stocks can be a powerful addition to your investment portfolio. However, investing in the stock market always carries inherent risks. Conduct your thorough research as mentioned in the tips above. It is advised to be prepared for market fluctuations.
Team LenDenClub
LenDenClub is India’s largest alternate investment platform which started operations in India in 2015. We have been helping investors diversify their investments beyond traditional investment instruments ever since.
