Best Ethanol Stocks in India: Top Sugar Stocks (2024)

Last Updated on Oct 16, 2024 by Anjali Chourasiya

Ethanol is a versatile by-product of the sugar industry. It has applications in various sectors, including plastics, polishes, plasticisers, medications, and cosmetics. In recent years, the surging demand for biofuels in India has led to the growth of ethanol companies. Many ethanol companies recorded big net profits this quarter, and many ethanol stocks have recorded triple-digit growth since the past year.

Considering the growth and demand for ethanol, here is the list of the best ethanol stocks from ethanol-producing companies in India.

What are Ethanol Stocks?

Ethanol stocks refer to shares of companies involved in producing, manufacturing, or distributing ethanol fuel. Ethanol, which is primarily made from corn, sugarcane, and other plant materials, is often blended with gasoline to create a cleaner-burning fuel. Companies that produce or supply ethanol may range from agricultural firms involved in growing raw materials to manufacturers with ethanol plants and energy companies distributing the final product.

When you invest in ethanol stocks, you essentially buy shares in companies that may benefit from the growing demand for ethanol fuel. Government policies, global energy needs, and environmental considerations often influence this demand. The price of ethanol and its related products also plays a significant role in determining the value of these stocks.

Top 10 Ethanol Stocks in India Based on 1Y Returns

Note: The data on the list of ethanol making company share prices is dated 15th October 2024. ​​The list of best ethanol stocks in India are based on the following parameters and sorted using Tickertape Stock Screener –

• Sub-sectors: Consumer Staples > Sugar
• 1-yr Return: Sorted from highest to lowest

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Overview of the Top Ethanol Companies Based on 1Y Returns

Sir Shadi Lal Enterprises Ltd

Sir Shadi Lal Enterprises Ltd was established in 1933 and operates in the sugar manufacturing sector. It is primarily involved in the production of sugar and related by-products. The company has a long-standing presence in India’s agricultural industry.

As of the latest data, the company has a market capitalisation of Rs. 194.07 cr. with a closing price of Rs. 369.65. Its price-to-earnings (PE) ratio stands at -21.14. Over the past year, the stock has delivered an impressive return of 173.41%.

Piccadily Agro Industries Ltd

Piccadily Agro Industries Ltd is engaged in the production and processing of sugar and alcohol-based products. Founded in 1994, the company has expanded its operations into the distillery sector as well, producing ethanol, which is used in blending with fuel.

The company boasts a market capitalisation of Rs. 6,757.52 cr. and a stock price of Rs. 716.30. Its PE ratio is relatively high at 61.57. Piccadily Agro has posted a 1-year return of 140.73%.

Prudential Sugar Corp Ltd

Prudential Sugar Corp Ltd, established in 1990, is involved in sugar manufacturing and ethanol production. The company operates in the sugarcane belt, focusing on the efficient production of sugar and its by-products.

Prudential Sugar Corp Ltd has a market capitalisation of Rs. 221.64 cr. and a closing price of Rs. 68.72. The PE ratio of the company is 35.35, and it has recorded a 1-year return of 119.20%.

Khaitan (India) Ltd

Khaitan (India) Ltd, founded in 1936, operates in the sugar sector. It is engaged in the manufacturing of sugar and sugar-related products, primarily catering to domestic demand in India.

The company has a market capitalisation of Rs. 47.60 cr., and its stock is priced at Rs. 100.20. The PE ratio of Khaitan (India) Ltd is 35.26, with a 1-year return of 82.51%.

SBEC Sugar Ltd

SBEC Sugar Ltd, incorporated in 1991, is a sugar manufacturing company. It primarily engages in the production of sugar and other related by-products and caters to both domestic and international markets.

The company has a market capitalisation of Rs. 292.74 cr., with a closing price of Rs. 61.43. The PE ratio is -24.15, indicating a loss-making situation, while its 1-year return is 75.51%.

Indian Sucrose Ltd

Indian Sucrose Ltd, established in 1990, is involved in the manufacturing of sugar, molasses, and bagasse. The company serves domestic markets and contributes to sugar production in India.

The company has a market capitalisation of Rs. 251.01 cr., and its stock is priced at Rs. 144.45. The PE ratio stands at 7.67, with a 1-year return of 63.22%.

E I D-Parry (India) Ltd

E I D-Parry (India) Ltd, founded in 1788, is one of India’s oldest companies in the sugar industry. It operates in sugar manufacturing and is involved in various agro-based activities. The company is also a significant player in the bio-products and nutraceuticals sectors.

The company has a market capitalisation of Rs. 14,770.04 cr. and a closing price of Rs. 831.80. E I D-Parry’s PE ratio is 16.42, and it has achieved a 1-year return of 62.07%.

Kesar Enterprises Ltd

Kesar Enterprises Ltd, incorporated in 1933, is primarily engaged in the manufacturing of sugar, alcohol, and industrial spirits. The company operates several sugar mills and distilleries across India.

As of the latest data, Kesar Enterprises has a market capitalisation of Rs. 149.68 cr., with a stock price of Rs. 148.50. The company’s PE ratio stands at 1.79, with a 1-year return of 58.86%.

Balrampur Chini Mills Ltd

Balrampur Chini Mills Ltd, founded in 1975, is one of the largest integrated sugar manufacturing companies in India. The company is engaged in sugar production, co-generation of power, and ethanol production, making it a significant player in the renewable energy sector as well.

The company has a market capitalisation of Rs. 13,445.58 cr., with a closing price of Rs. 666.45. Its PE ratio is 25.16, and the stock has posted a 1-year return of 57.48%.

Bannari Amman Sugars Ltd

Bannari Amman Sugars Ltd, established in 1983, operates in the sugar and distillery industries. The company is involved in the manufacturing of sugar, alcohol, and power generation. It also runs a significant agricultural division.

The company has a market capitalisation of Rs. 4,886.22 cr., with a closing price of Rs. 3,896.60. Its PE ratio is 32.08, and the stock has delivered a 1-year return of 48.67%.

Top Ethanol Companies with Highest Net Income (Q)

Note: The data is dated 15th October 2024. ​​The ethanol stocks list is based on the following parameters and sorted using Tickertape Stock Screener –

• Sub-sectors: Consumer Staples > Sugar
• Net Income (Q): Sorted from highest to lowest

Top Ethanol Stocks in India with Highest Dividend Yield

Note: The data is dated 15th October 2024. The list of ethanol company shares with the highest dividend yield is based on the following parameters and sorted using Tickertape Stock Screener –

• Sub-sectors: Consumer Staples > Sugar
• Dividend Yield: Sorted from highest to lowest

How to Invest in Ethanol Stocks?

You can go through the following steps to get an understanding of how you may approach ethanol stock investments:

1. Research the Ethanol or Sugar Stocks that Interest You: Investors can examine the top 10 ethanol stocks listed above in the two lists based on specific factors like net high income, highest dividend yield, and 1Y returns. 

2. Evaluate the Stock Price and Analytics: Investors can look at the ethanol company list and their share prices to get an idea of their different market valuations and trends that might be significant for investors. 

3. Selection of Stock Types: Investors may choose ethanol stocks in India based on their investment objectives and risk appetite. Ethanol shares in India can range mostly from mid-cap to high-cap with differing potential returns and risk profiles. Furthermore, as seen in the three lists above, you can choose your preferred ethanol share accordingly based on different factors. 

4. Analysing Financial Health and Position: Analysing financial reports, market performance, and future growth prospects of chosen ethanol companies in India provides insights into their stability and growth potential. This analysis enhances comprehension of the ethanol company share portfolio’s performance and outlook.

5. Use Advanced Tools: Tickertape Stock Screener empowers you to craft a personalised ‘Custom Universe’ for streamlined analysis of ethanol stocks. With over 200 filters, tailor your criteria to refine your list effortlessly. Additionally, investors may use the ‘Custom Filter’ option to craft their unique parameters. Begin building your ethanol company stocks universe today, and use Tickertape for insightful analysis!

Why Invest in Ethanol Stocks?

Investing in ethanol stocks in India presents a significant opportunity for investors seeking growth in the renewable energy sector. Ethanol, a renewable biofuel, is increasingly becoming a key alternative to fossil fuels, and India’s government policies are favoring its rapid adoption. Here are some compelling reasons to consider investing in ethanol stocks India:

Government Support for Ethanol Production

The Indian government has been pushing for higher ethanol blending in petrol, with a target of 20% blending by 2025. This policy support is driving the growth of ethanol production in India, making it a favorable sector for investment. Ethanol manufacturing companies in India are poised to benefit from this increased demand, leading to strong growth prospects for their stocks.

Sustainability and Environmental Benefits

Ethanol is a cleaner and more sustainable alternative to traditional fuels. Investing in ethanol manufacturing companies in India supports the global shift towards cleaner energy sources, helping reduce carbon emissions. The growing awareness of climate change is driving demand for renewable energy solutions, and ethanol shares company stocks are set to benefit from this trend.

Increasing Ethanol Prices

The rising ethanol price in India is another reason to invest in the sector. With higher demand for ethanol blending and limited supply, the price of ethanol has been steadily increasing, improving the profitability of ethanol production companies in India. This is especially beneficial for investors looking at the best ethanol company for long-term returns.

Diverse Revenue Streams

Many sugar and ethanol stocks provide investors with diversified revenue streams. As sugarcane is a key raw material for ethanol, ethanol sugar stocks benefit from both the sugar and ethanol markets. Companies that operate both ethanol manufacturing plants and sugar businesses can generate steady income, even during periods of volatility in one sector.

Technological Advancements in Ethanol Production

The ethanol manufacturing process has seen significant improvements, leading to more efficient and cost-effective production. Understanding how is ethanol made and how is ethanol produced shows how technological advances are making the industry more profitable. Companies investing in innovative production techniques are likely to see higher returns, which makes ethanol stocks India an attractive investment option.

Expanding Market for Ethanol

Ethanol is widely used in various industries, including transportation, chemicals, and pharmaceuticals. The expansion of the ethanol business in India and the establishment of new ethanol factories in India are indicators of growing market demand. This increased consumption drives growth for ethanol manufacturing companies in India and presents lucrative opportunities for investors.

Potential for Long-Term Growth

India is one of the largest producers of ethanol, and the biggest ethanol producer in India is rapidly expanding its capacity. As global demand for biofuels increases, Indian ethanol production companies are well-positioned to capture a larger share of the market, ensuring sustained growth for investors.

Attractive Investment Opportunities

For investors interested in smaller companies with high-growth potential, ethanol penny stocks in India and the top 10 ethanol stocks under 10 rs NSE offer low-cost entry into this growing market. These ethanol penny stocks could provide significant returns as the ethanol sector continues to expand.

Factors to Consider Before Investing in Ethanol Stocks

When considering investing in ethanol stocks, you may want to keep in mind several key factors:

• Ethanol Production Costs: Costs are influenced by raw material prices, operational expenses of ethanol plants, and technological innovations that improve production efficiency.
• Government Policies and Incentives: Policies promoting ethanol use, subsidies, and mandates for blending ratios could significantly affect the growth of ethanol stocks in India.
• Market Demand and Price Fluctuations: The demand for ethanol across various sectors and fluctuations in ethanol prices, driven by supply-demand dynamics and crude oil prices, can impact the profitability of ethanol companies.
• Technological Advancements: Companies that leverage advanced technologies to boost production efficiency or create new applications for ethanol may have better growth potential.
• Company Financials and Market Position: Assessing a company’s financial health, revenue, profit margins, debt levels, and growth prospects can help you find ethanol stocks that fit your investment strategy.
• Environmental and Sustainability Concerns: Investing in companies that prioritise eco-friendly practices in ethanol production may align with your interest in sustainability.

Advantages of Investing in Ethanol Stocks

Since ethanol is a renewable fuel, the shift in the energy sector towards renewable energy sources can propel the rise in ethanol consumption in the near future. Here are some of the reasons to explore ethanol stocks in India – 

• Government-Backed: The government considers ethanol a suitable alternative to fossil fuels and has introduced financial assistance schemes to increase ethanol production capacity in India. Consequently, ethanol company stocks can be attractive for long-term investors. 
• Environment-Friendly: Ethanol is less harmful than other fuels. It is a clean-burning fuel that emits greenhouse gases and pollutants within a specified limit. Therefore, it is considered the fuel for the future, with many companies already incorporating ethanol into production and manufacturing products.
• High Demand: For the above-mentioned reasons, ethanol is in demand, which experts believe is expected to increase significantly in the coming years. As a result, ethanol companies in India are in an ideal position to benefit from this trend, which makes investing in ethanol stocks in India a potentially lucrative opportunity.

Challenges of Investing in Ethanol Stocks in India

Even though there is a growing trend in ethanol consumption in India, there are several challenges associated with it. Such as, 

• Fluctuating Prices of Commodities: Ethanol is produced by fermenting the sugar in the starches of grains such as corn, sorghum, and barley. Any change in the prices of these commodities will directly impact the prices of ethanol production. 
• Rise of Other Fuel Sources: Electric vehicles and hydrogen fuel cells, among other alternative fuel sources, pose strong competition for ethanol producers and manufacturers in India. The rising demand in EV can potentially constrain the demand for ethanol, thereby affecting the growth prospects of ethanol stocks.
• Political and Regulatory Risks Surrounding Ethanol: Shift in government policies and regulations can substantially influence the ethanol industry. Therefore, investors in ethanol stocks should stay vigilant about evolving regulations, tax incentives, and subsidies that could potentially affect the sector.

Ethanol Sector in India

The ethanol sector in India is poised for significant growth as of 2024, driven by government initiatives aimed at achieving a 20% blending target with petrol by 2025. This ambitious goal is part of India’s broader strategy to enhance energy security and reduce carbon emissions. Currently, the average ethanol blending rate stands at approximately 11.6%, with expectations for increased production and supply from both sugarcane and grain sources.

India’s ethanol production is primarily derived from sugarcane molasses, with major players including Bajaj Hindusthan Sugar, Balrampur Chini Mills, and Shree Renuka Sugars. These companies are among the top ethanol manufacturers in India, contributing significantly to the sector’s growth. The market for ethanol stocks in India has gained traction, attracting investors looking for opportunities in renewable energy. Notable stocks include Piccadily Agro Industries and Triveni Engineering & Industries, which have shown promising performance due to rising demand.

The ethanol making process involves fermenting sugars extracted from crops, making it a renewable fuel alternative. As the sector expands, the government has introduced various policies to support ethanol production, including subsidies and tax incentives for ethanol producing companies in India. This has led to a surge in share prices for many ethanol-related stocks, as investors anticipate robust growth in this segment.

Challenges remain, including fluctuating commodity prices and competition from electric vehicles. However, the outlook for the ethanol sector is optimistic, with projections indicating that India could become the world’s third-largest ethanol economy by 2026. As such, investing in ethanol company stocks presents a unique opportunity for long-term growth amidst a transitioning energy landscape.

Who Can Invest in Ethanol Stocks?

Ethanol stocks in India may appeal to various types of investors:

• Retail Investors: Those looking to diversify their portfolio and gain exposure to the biofuel sector might consider ethanol stocks, given the focus on alternative energy for long-term growth.
• Institutional Investors: Mutual funds, pension funds, and insurance companies may find ethanol stocks attractive for long-term investments due to the growth potential in renewable energy.
• Ethical and Sustainable Investors: Investors interested in ethical investing might choose ethanol shares, as ethanol is a cleaner, renewable alternative to fossil fuels.
• High-Risk Takers: Those with a higher risk appetite may consider ethanol stocks, including penny stocks, for potentially higher returns, while being aware of the volatility and risks involved.

Things to Consider Before Investing in Ethanol Stocks

Here are some of the key things to evaluate before investing in ethanol stocks – 

• Research Industry Leaders: Identify ethanol companies in India that are at the forefront of ethanol production, as they typically boast superior infrastructure, technology, and market penetration.
• Government Policy Analysis: Gain insights into how governmental policies, including subsidies and ethanol blending mandates, impact the industry. Ethanol Stocks aligning well with such policies may present more promising opportunities.
• Supply Chain Reliability: Prioritise companies with a stable supply of raw materials, such as sugarcane, to mitigate the risk of production disruptions.
• Diversification Strategy: Explore companies with diversified interests beyond ethanol, providing stability against potential market volatility in the ethanol sector.
• Analyst Ratings and Reports: By evaluating analyst ratings on Tickertape, you can gain hindsight into experts’ perspectives on the stock’s potential.
• Historical Performance Review: While past performance doesn’t guarantee future results, understanding a stock’s historical performance can offer valuable insights.
• Investor Sentiments Monitoring: Stay attuned to overall investor sentiment regarding the ethanol industry and specific stocks to gauge market perception and potential trends. To monitor investor sentiment on Tickertape, you can refer to 1-day daily volume. Any change in the percentage of daily volume can offer insight into the investors’ buying and selling behaviour.

Conclusion

India boasts a robust presence of ethanol companies, many of which rank globally among the foremost ethanol producers. The heightened demand for ethanol globally has propelled the Indian ethanol market to new heights, with projections indicating a remarkable CAGR of 9.16%. It is projected that by 2029, the Indian ethanol market is set to achieve a market value of $4.15 billion.

However, since ethanol is a by-product of sugar, running a detailed analysis of the companies before investing is essential. For this purpose. #TickertapeHaiNa! Tickertape Stock Screener offers 200+ filters, custom filters, custom universe, and more to analyse any stock thoroughly. Moreover, with Tickertape, you can identify the intrinsic value, dubbed as the true value of a stock, with the pro version.

Frequently Asked Questions About Ethanol Stocks

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Harshit Singh

Content Strategist at Tickertape

Hey there, I’m Harshit Singh Mahey! With eight years of experience as a Content Strategist, I’ve had the pleasure of working with a Fortune 100 company and building three successful startups from the ground up.

As an investment fanatic, I’ve dabbled in early-stage startups, mutual funds, gold, stocks, smallcases, and real estate to identify which assets generate the highest ROI. At Tickertape, I’m dedicated to presenting my learning and providing insightful suggestions to help my readers make sound investment decision.

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