Greetings, fellow investors! Today, we’re going to talk about an emerging industry in India – Ethanol Stocks. Ethanol is a clean and renewable source of energy that can be blended with gasoline to reduce vehicle exhaust emissions. With the Indian government’s push towards cleaner energy and reducing petroleum imports, the demand for ethanol is on the rise. This has led to the emergence of various Ethanol companies in India, and their stocks have become a hot topic among investors. In this blog, we’ll discuss the best ethanol stocks in India, the ethanol stocks list, and the ethanol-related stocks in India. So, let’s dive right into the world of Ethanol stocks in India and explore the investment opportunities it offers!
Let’s start with some Stats,
India’s sugar exports in lakh tonnes:
FY17: 0.5
FY18: 6
FY19: 38
FY20: 60
FY21: 72
FY22: 110
Exploded 220x in 6 years, and will soon reach 2nd globally.
Undiscovered category contribute to 40,000 Cr of foreign reserves. Ethanol is a by product of sugar from these sugar companies with colossal figures. For additional context, Ethanol is used as blended Ethanol in Petrol that is used in motor vehicles and automobiles.
What is Ethanol?
Ethanol is a colorless liquid with a distinct odor that’s commonly found in alcoholic beverages. It can also be produced through various processes, including fermentation of sugars and petrochemical methods like ethylene hydration. Ethanol is considered an agricultural by-product and can be sourced from different materials such as sugarcane, rice husk, or maize. As of now, ethanol comprises 10% of the daily petrol usage in our vehicles.
What are Ethanol Stocks?
The stocks of companies that deal with the production of Ethanol are Ethanol Stocks.
India relies heavily on petroleum imports, which account for approximately 80% of the country’s total crude oil consumption, making it one of the largest importers of petroleum products in the world. Fossil fuels provide around 98% of the fuel required for road transportation, while biofuels make up the remaining 2%.
To reduce reliance on imports and save on resources, the Indian government is exploring various options, including boosting renewable energy production and replacing gasoline with ethanol. The National Policy on Biofuels, established in 2018, aims to achieve 20% ethanol blending under the Ethanol Blended Petrol (EBP) Program by 2025. Ethanol blending is expected to reduce vehicle emissions and save on capital, foreign exchange, and efforts invested in the nation.
According to Centrum Broking, demand for ethanol blending is projected to reach 1,016 crore liters by ESY21-26, representing a CAGR of 25.1 percent from the current 425 crore liters. With the majority of petroleum being used by vehicles, a successful ethanol blending program has the potential to yield significant cost savings for the country.
These are the top 10 Ethanol Stocks to buy in India.
The Top 10 ETHANOL STOCKS IN INDIA –
1. Shree Renuka Sugars:-
Shree Renuka Sugars tops the list with the highest Market Capitalization of 9563 Crores and the Current Market Price of one share of Shree Renuka Sugars is Rs. 47.
Renuka Sugars is one of the largest sugar producers in the world and the leading manufacturer of sugar in India. The company operates eleven mills globally with integrated ethanol and power co-generation capacity. It also has two large port-based sugar refineries in India.
The company has painstakingly increased sales from Rs 5,648.52 crores to Rs 6,432.63 crores this year by 784 Crores.
But despite the increase in sales, the company is not performing well operationally. This has widened its losses to Rs 137 crores this year from a loss of Rs 117 crores by a difference of 20 Crores.
The EPS of the company is -0.39 and the Debt to Equity Ratio is -2.94. Net Loss : -2.13%.
2. EID Parry:-
EID Parry is the runner up with a Market Cap of 9135 Crores and the Current Market Price of one share of EID Parry is Rs.524.
The company, EID Parry has many laurels feathering its cap. One would be setting up India’s first sugar plant at ‘Nellikuppam’ in 1842 . E.I.D. Parry’s 9 sugar plants are spread across Karnataka, Andhra Pradesh, and Tamil Nadu that house manufacturing plants with a total sugarcane crushing capacity of 40,300 MT per day (TCD) and a Distillery capacity of 297 KL per day. The manufacturing units are situated at Nellikuppam, Pugalur, and Sivaganga in Tamil Nadu, Sankili in Andhra Pradesh and across the length and breadth of Karnataka.
It has been operating for over 225 years. Also India’s first fertilizers manufacturing company. Nutraceuticals, Crop Protection, Sugar, Co-Generation, Distillery, and Others are some of its segments.In addition, it provides specialized pharmaceutical sugar grades for use in various pharmaceutical applications, including tablet coatings, liquid orals, dry syrups, intravenous services, and drug delivery systems.
We have a profit making ethanol stock in the top 3. Revenue of the company increased from Rs 18,595 crores to Rs 23,532 crores YOY. Net profits increased hand in hand from Rs 998 crores to Rs 1,573 crores.
EPS of the stock is Rs.60.33 and the company operates at a net profit margin of 6.68%.
3. Triveni Engineering and Industries Limited:-
Triveni Engineering and Industries Limited, true to the name, Tri + Veni – is the 3rd largest Ethanol Stock with a Market Cap of 6903 Crores and the Current Market Price of one share of Triveni Engineering and Industries Limited is Rs.524.
The company, Triveni Engineering and Industries Limited focusses on power generation. The company has over 7 cutting-edge sugar manufacturing units which produces multi grade sugar, ethanol,potable alcohol and electricity. Different FMCG, confectionary and pharmaceuticals industries uses Triveni’s product for manufacturing.
The revenue of the company fell from Rs 4,674 crores to Rs 4,291 crores. On the other side, the net profit figures moved opposite to revenue figures. The company made more profit of 72 Crores YOY since the profit increased from Rs 293 crores to Rs 365 crores.
Debt to Equity Ratio stood at 0.82. EPS of the company is Rs.78.15 and the company operates at a net profit margin of 7.77%.
4. Balrampur Chini Mills Limited:-
Balrampur Chini Mills Limited is the 4th largest ethanol stock by market capitalization. The Market Capitalization of Balrampur Chini Mills Limited is 7379 Crores and the Current Market Price is 376 Rs.
Balrampur Chini Mills Limited (BCML) is among the premier sugar mills of India. The company’s innovative ways to streamline manufacturing and regulate operations enabled them to venture into a portfolio of market offerings like molasses, alcohol, ethanol and power.
Balrampur Chini is one of the first sugar companies in the country to diversify its business from sugar to distillery and cogeneration.
The company is a broad based and integrated sugar company with extensive interests in sugar and ethanol production as well as power co-generation. Over the years, the proportion of non-sugar revenues in the overall revenues of the company has increased, broadening the company’s profile and strengthening its counter cyclicality. The company has 10 manufacturing facilities across East and Central Uttar Pradesh.
The company has been able to grow its revenue consistently over the last 3 financial years, from Rs 4,741 crores in FY19-20 to Rs 4,846 crores in FY21-22.
But YOY Profit has decreased by 13 Crores from 460 Crores to 453 Crores this Year.
Debt to Equity Ratio of the Company is 0.44. Price to Equity Ratio of the Company is 29.94 rupees. EPS of the Company is Rs.13.38. The company made a net profit margin of 9.34%.
5. Bannari Amman Sugars Ltd:
Bannari Amman Sugars Ltd is an arm of the Bannari Amman trade wing in Erode in Tamilnadu. By Market Capitalization, Bannari Amman Sugars Ltd has a market cap of 3448 Crores and the Current Market Price of 1 share is 2750 Rs.
Bannari Amman Sugars is one of the largest Conglomerates in South India that offers a wide range of services that includes manufacturing, trading, and Service activities. Manufacturing and trading activities in Bannari Amman Sugars range through a diverse product portfolio including sugar, alcohol, liquor and granite.
The Earnings Per Share of Bannari Amman Sugars Ltd is a negative 0.39 (-0.39) and the Debt to Equity Ratio is -2.94. Net Loss of the Stock is -2.13%.
6. Andhra Sugars Limited
Andhra Sugars Limited is the 6th largest Ethanol stock and has a market capitalization of 1615 Crores and the Current Market Price of the Share is Rs.119.
The company, Andhra Sugars was established in 1947 just after independence. According to the company, it uses locally available renewable resources to produce value-added products like sugars, chemicals, fertilizers and pharma.
7. Dalmia Bharat Inds:- .
Dalmia is a popular brand name in India across cement, steel and sugar manufacturing.
The company, Dalmia Bharat Sugar and Industries Ltd has a market Capitalization of 2643 Crores and the Current Market Price of a Dalmia Sugar stock is Rs.328.
DBL also has longterm plans to become a pan-India player with a capacity of 70-75MT by FY27 and 110-130MT by FY31.
8. Bajaj Hindustan Sugar:- .
Bajaj Hindustan Sugar is the 8th Largest by Market Capitalization and has a market cap of 1692 Crores.
Fun Fact: You can buy one stock of Bajaj Hindustan Sugar with just Rs.13. Budget Stock if there was one.
India’s most prominent and fourth-largest integrated sugar producer, Bajaj Hindusthan Sugar Limited (BHSL), operates 14 facilities in the northern Indian State of Uttar Pradesh with combined sugarcane crushing capacities of 800 kiloliters per day (KLD) and 136,000 tonnes crushed per day (TCD) (UP).
9. Dhampur Sugar Mills:-
Dhampur Sugar Mills Ltd is the 9th largest company by market capitalization that produces Ethanol. The Market Capitalization of Dhampur Sugar Mills Ltd is 1449 Crores and the Current Market Price of one stock of Dhampur Sugar Mills Ltd is Rs.218.
The company has multiple facilities for sugarcane processing with almost 15% market share in the ethanol and chemical business and has a capacity of 650KLPD(Kiloliters per day).
10. Dwarikesh sugar industries:-
Dwarikesh Sugar Industries Ltd makes it to the top 10 with a Market Capitalization of 1665 Crores and the current market price of a single stock of Dwarikesh sugar industries Ltd is Rs.88. This is another budget stock.
It is specialised in manufacturing sugar and it’s related products. The segments of the company are distillery, co-generation, and sugar.The combined production capacity of the Company’s sugar manufacturing facilities is about 21,500 tonnes of sugarcane per day.
Other Notable Ethanol Stocks that did not make it to the list:
Globus Spirits:-
Globus Spirits is another Ethanol stock that is engaged in alcohol production on a massive scale.
Some of the industrial-grade alcohol manufactured by the entity includes grain-neutral alcohol, denatured spirit, bioethanol, and fusel oil, among others. In addition to alcohol, the company also produces sanitizers, carbon dioxide, and animal feed supplements.
Praj Industries Ltd:-
Praj Industries is an Ethanol Stock has a market capitalization of 6005 crore and has an EBIT Margin of 5.43%. EBIT – Earnings Before Interest and Tax.
