Ethanol, a biofuel, is produced from sugarcane, corn, and grains like maize. Since sugar is diverted to produce ethanol, many sugar producers in India are also big producers of ethanol. Ethanol stocks have caught investors’ fancy amid increasing environmental concerns about the use of fossil fuels. In this blog post, we will discuss some of the top ethanol stocks in India.
Ethanol industry in India: A brief overview
Ethanol has been in use since the early 1900s as a fuel that is environment-friendly. India began producing ethanol from sugarcane in the 1970s, but initially, it was produced purely for commercial purposes. Since the early 2000s, steady progress has been made in the production and consumption of ethanol in India. Factors such as higher production and increasing demand for alternative sources of energy are the drivers of growth.
Top ethanol stocks in India in 2024 as per market capitalization
India is emerging as an important player in the global ethanol market. Understandably, investor interest in the top ethanol stocks in India has surged. Here, we have listed the leading ethanol stocks in India.
- Triveni Engineering and Industries LtdÂ
- EID-Parry (India).
- Bajaj Hindusthan Sugar
- Shree Renuka Sugars LtdÂ
- Praj Industries
- Balrampur Chini Mills Limited
- Dalmia Bharat Sugar and Industries LtdÂ
- Bannari Amman Sugars LtdÂ
- Dwarikesh Sugar Industries LtdÂ
- Dhampur Sugar Mills Ltd.
Overview of the top ethanol stocks in India
Let’s try to understand why these ethanol stocks are highly regarded. Listed below are some of the top stocks in Indian ethanol companies:
Triveni Engineering and Industries Ltd (TRIVENI)
Triveni Engineering & Industries Limited is engaged in sugar manufacturing and engineering businesses. A major ethanol producer, the company uses molasses to manufacture ethanol and extra neutral alcohol.
EID Parry India Ltd. (EIDPARRY)
EID-Parry (India) Ltd. is part of the Murugappa Group. It makes and sells sugar, biopesticides, and nutritional supplements. The firm runs six sugar factories and a brewery in South India.
Bajaj Hindusthan Sugar Ltd (BAJAJHIND)
Bajaj Hindusthan Sugar makes wine, sugar, and power. Its main office is in Maharashtra, but it also runs 14 sites in Uttar Pradesh.
Shree Renuka Sugars Ltd (RENUKA)
Shree Renuka Sugars Ltd., an ethanol-producing company in India, makes and sells sugar, ethanol, and power-related products. The company also makes and sells bio-fertilizers and bio-pesticides. It makes more ethanol than any other company in India and is among the top ethanol stocks in the country.
Praj Industries (PRAJIND)
Praj Industries Limited, established in 1983, is engaged in providing biofuel, building, and environmental solutions. The business specializes in coming up with new technology and engineering solutions for producing biofuels like ethanol and biodiesel, as well as for treating wastewater and building breweries.
Balrampur Chini Mills Limited (BALRAMCHIN)
West Bengal is home to Balrampur Chini Mills Limited, which was founded in 1975. It makes sugar, alcohol, ethanol, syrup, bagasse, and organic soil. It has a sizable presence in Uttar Pradesh, which is India’s top sugarcane-growing state.
Dalmia Bharat Sugar and Industries Ltd (DALMIASUG)
Dalmia Bharat Sugar & Industries Ltd is one of India’s largest sugar producers and exporters.
Bannari Amman Sugars Ltd (BANARISUG)
The Bannari Amman Group is a big South Indian business group. The firm produces sugar and ethanol. It operates in sugar, whiskey, rock, wind power energy, and other industries. It’s one of the top ethanol stocks in India.
Dwarikesh Sugar Industries Ltd (DWARKESH)
Dwarikesh Sugar Industries Limited makes and sells sugar, ethanol, and electricity. The company has three main areas of business: sugar, co-generation, and distilling.
Dhampur Sugar Mills Ltd. (DHAMPURSUG)
Dhampur Sugar Mills, one of India’s integrated sugar companies, is also into ethanol production.
Factors to consider before investing in ethanol sector stocks in India
Even though ethanol stocks can be an excellent way to make money, there are a few things you should consider before you buy them. ·
Government policies
Government policies are critical to the ethanol business. Pay attention to the National Biofuel Policy and the Ethanol Blending Program that have a significant impact on demand and profits. Also, keep an eye on government programs, funding, and changes to rules that could affect the market.
Climate
Many of the crops used to make ethanol, like sugarcane and corn, are sensitive to weather. Droughts, storms, and hostile weather can lower food output, which can affect the production of ethanol
Crude oil prices
Ethanol is often used instead of gasoline. When the price of crude oil goes up, ethanol becomes more appealing, which could increase demand and stock prices. On the other hand, when the price of crude oil goes down, ethanol demand goes down, which can hurt stock performance.
Ethanol production capacity
A critical issue is how much ethanol businesses can produce. Companies that can make more can better meet the needs of the market, which boosts their profits. Think about what companies can do now and how they want to grow.
Exchange rates
Pay attention to exchange rates if you want to invest in companies that produce and export ethanol. When a country’s currency falls, its products can become more competitive, which can lead to more money coming in and even push up share prices.
Financial performance
Look at the trends in ethanol businesses’ income, earnings, and cash flow to determine their financial health. Companies with solid financials will be able to handle changes in the market and grow over the long run.
Supply chain reliability
To ensure ethanol production, there must be a steady flow of raw materials like sugarcane. Companies with reliable supply lines are less likely to have problems with production, which means that operations run more smoothly and stock performance stays stable.
Competition
Since ethanol is in high demand, several companies compete for a small slice of the ethanol market. When it comes to competing with other businesses, those with higher profit margins, more efficient production methods, and smart market positioning will have an edge over the rest. Think about the competition and how strong each company is compared to others.
Should you invest in ethanol stocks?
Since ethanol is a renewable fuel, the shift toward green energy sources could lead more people to use ethanol in the near future. The government views ethanol as an excellent substitute for fossil fuels, and it has set up financial aid programs to help India produce more ethanol. Because of this, the top ethanol stocks in India can be a good, long-term investment.
Closely allied to the ethanol stocks are the stocks of sugar producing companies as sugarcane is the raw material for manufacturing ethanol. You can check out some of India’s top sugar stocks here.Â
Conclusion
The ethanol stocks in India have a lot going for them. Climate-change induced shift to cleaner sources of energy, favorable government policy, and easy availability of raw material such as sugarcane and maize all bode well for the ethanol sector. Ethanol businesses in India are ideally placed to gain from this trend. Buying the top ethanol stocks in India could be an excellent idea.
