Best Ethanol Stocks in India 2024

Best Ethanol Stocks in India 2024 As Per Analyst Ratings

The following table highlights the list of best ethanol shares in India 2024 as per analyst ratings. The list is based on stock ratings provided by analysts who rate a stock after a detailed study of the market-

*Our stock selection criteria for top stocks based on analyst ratings are mentioned at the bottom of this blog.

Top Ethanol Stocks in India in 2024 As Per Market Capitalisation

The following table gives a list of the best ethanol company stocks in India based on their market capitalisation: 

*Our stock selection criteria for top stocks based on Market Capitalisation are mentioned at the bottom of this blog.

Overview of Best Ethanol Stocks in India 

Here is a brief overview of the top ethanol shares in India as per the analyst ratings and market capitalisation outlined above. 

• Dwarikesh Sugar Industries

Incorporated in the year 1993, Dwarikesh Sugar Industries Limited is a diverse industrial company based in India. It focuses on producing sugar, ethanol, power, sanitiser, bagasse, fertilisers,  pesticides, molasses, and many other products. 

Dwarikesh Sugar works with around 1.54 lakh farmers who cultivate sugarcane across three locations spanning more than 1.17 lakh hectares. Its sugarcane procurement amounts to approximately 382 lakh quintals. With primary manufacturing units located in Uttar Pradesh at Bundki village, Bahadurpur village in Dhampur Tehsil, and Faridpur Tehsil in Bareilly District, it also operates in other parts of India such as Maharashtra, Delhi, and Rajasthan.

• Triveni Engg

Triveni Engg, founded in 1932, is one of India’s largest sugar manufacturing companies. It also operates in engineering businesses, including power transmission, water and wastewater treatment solutions, and defence sectors. The company manufactures white crystal sugar across 7 plants in Uttar Pradesh. 

Utilising molasses from sugar production, it produces ethanol and extra-neutral alcohol. According to the news, the company plans to divert 4.5 million tonnes of sugar towards the ethanol program, which amounts to almost 12% of its total sugar production. It also aims to increase its ethanol capacity from 660 kiloliters per day to 1,100 kiloliters per day.

• Balrampur Chini Mills Limited

Headquartered in West Bengal and established in 1975, Balrampur Chini Mills Limited is an Indian company that produces and distributes sugar, alcohol, ethanol, molasses, bagasse, and organic manure. The company operates power plants during sugar production to fulfil its power needs and sells any excess bagasse in the market. 

Its capacity for crushing sugarcane is 80,000 tonnes daily, with a distillery capacity of 1,050 kilolitres per day and a saleable co-generation capacity of 175.7 megawatts. The company operates 24 facilities across 10 locations. Moreover, it uses composting technology to create bio-composts under various brands like Paudh-Sakti, Jaiv-Shakti and Devdoot. 

• EID-Parry (India)

EID-Parry (India) Limited is an Indian manufacturing company that produces sugars, sanitisers, super grains and nutraceuticals. Based in Chennai, it is part of the ₹570 billion Murugappa Group. The company is renowned for establishing India's first sugar plant in 1842. It operates 6 sugar plants and one standalone distillery across South India, with cutting-edge facilities for sugar crushing, co-generation and distillation. 

Additionally, EID Parry leads globally in organic spirulina and microalgal products. Its nutraceuticals business includes major international certifications and manufacturing plants in Tamil Nadu. The company also has subsidiaries involved in refined sugar and farm inputs.

• Shree Renuka Sugars

Shree Renuka Sugars is one of the biggest ethanol producers and sugar refiners in India. The company's green energy business includes producing ethanol for blending into petrol and generating electricity. They are among the major contributors to the Indian government's Ethanol Blending Program. The company runs 8 modern sugar mills, some of which produce ethanol. 

Recently, their ethanol production capacity has increased to 1,250 kilolitres per day, aiming to increase their contribution even further. They employ innovative techniques to produce more than their usual capacity, which enhances the country's energy security.

6. Bajaj Hindusthan Sugar  

Bajaj Hindusthan Sugar Limited (BHSL) is one of the top sugar and ethanol manufacturers in India. Based in Maharashtra, it runs 14 sugar plants in Gola Gokaran Nath, Thana Bhawan, Budhana, Palia Kalan, Khambharkhera, and others. These plants have a combined capacity to crush 136,000 tonnes of sugarcane per day and distil 800 kilolitres of alcohol daily.

The company is a major ethanol producer, making 38 million litres annually, with plans to increase production to around 218 million litres every year. Additionally, Bajaj Hindusthan Sugar generates about 430 megawatts of power from bagasse at its sugar mills. It also operates 5 coal-fired power plants, generating an extra 450 megawatts for the state grid.

Factors to Consider Before Investing in Ethanol Sector Stocks in India

While you might find ethanol stocks appealing for investment, it is in your best interest to consider the influencing factors before making a decision. Thus, let’s now explore some critical factors here-

• Government Policies

The Indian Government may offer subsidies and tax incentives to ethanol producers, influencing stock prices positively. Policies like the National Biofuel Policy and the Ethanol Blending Program promote biofuel usage, encouraging investment in ethanol companies.

• Weather Conditions

Ethanol production relies on crops like corn and sugarcane, which are sensitive to weather. Droughts, floods and other extreme weather events can reduce crop yields, affecting ethanol production and stock prices negatively.

• Crude Oil Prices

Ethanol is often used as a substitute for gasoline. When crude oil prices rise, ethanol becomes more attractive, potentially increasing stock prices. Conversely, falling crude oil prices can lead to decreased demand for ethanol and lower stock prices.

• Ethanol Production Capacity

The production capacity of ethanol companies is crucial. Higher production capacity allows companies to meet demand effectively, potentially boosting stock prices.

• Exchange Rates

Ethanol producers may export their products, and fluctuations in exchange rates can impact revenue. A weaker local currency can make exports more competitive, increasing revenue and potentially elevating stock prices.

• Financial Performance

You should carefully analyse the ethanol company's financial performance by examining its revenue, profit and cash flow trends over recent periods. When evaluating ethanol stocks, prioritise companies with robust financial statements.

• Supply Chain Reliability

When considering investing in the best ethanol stocks, prioritise companies that have a consistent and reliable supply of raw materials, like sugarcane. This helps reduce the risk of production disruptions and ensures smoother operations for the company.

• Competition

Ethanol stocks compete for sales through auctions with oil marketing companies. Companies with better margins will have an advantage over their peers.

Should You Invest in Ethanol Stocks?

Investing in ethanol stocks requires careful consideration. Factors like commodity prices, government policies, and competition from alternative fuel sources influence the ethanol sectors. While there is potential for growth in this sector, regulatory changes, market dynamics, and technological advancements can impact their performance.

Before investing in ethanol stocks, it is crucial to research and stay informed about industry developments. Upon regularly reviewing your investment strategy, you can ensure that it aligns with your financial goals and risk tolerance.

Summing Up

The ethanol sector in India offers promising investment opportunities amidst the country's increasing focus on renewable energy sources and reduced reliance on fossil fuels.

Before investing in top ethanol stocks in India, it is crucial to understand the various factors that influence the market. Moreover, you can seek advice from a financial expert who can help you select the best ethanol stocks for maximised investment returns.