List Of Ethanol Stocks In India: Recently, ethanol stocks were in the news for their phenomenal returns. The Indian ethanol industry has grown to a size of 3,200 tonnes in FY2022, with a growth rate of 5.6% CAGR until 2035 (Source – Chem Analyst).
Mainly the need for ethanol in fuel and beverages is one of the main causes of the growth of the industry altogether. With a predictive rise in demand for ethanol, all eyes are on the top companies in the sector. Specifically, the sugar companies. Yes, you read that right.
Ethanol is a by-product of sugar and a potential opportunity for the existing sugar/ethanol companies as another source of income. Ethanol is also used in alcoholic beverages, specifically beer, wine, and other spirits.
This means that the growing demand combined with the shift in lifestyle when it comes to the consumption of alcohol is also going to drive the ethanol industry. In this article, we’re going to talk about the top ethanol stocks in India.
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Ethanol & Its Uses
Ethanol is a blend of ethane and alcohol. It is produced by fermenting of sugars, yeasts, or through petrochemical processes. Ethanol was predominantly used in the medical industry as a disinfectant, an antiseptic, and a chemical solvent.
Over time, the uses of ethanol have expanded to various industries such as alcoholic beverages such as beers and wines, industrial applications, petroleum blends, and so on.
Some Widely Known Uses Of Ethanol:
- Anesthetic
- Antiseptic
- Disinfectant
- Fuel
- Recreation/Consumption
- Solvent
Top Ethanol Stocks In India – Table
The Government Of India has taken measures to promote the production and use of ethanol for different purposes, including the use of ethanol as a fuel AKA bio-ethanol fuels.
By doing so, the government expects the weight of the current fuel imports on the nation’s overall import bill to reduce by up to $4 billion dollars or ₹30,000 crores.
In 2022, India planned to introduce a 20 percent ethanol blended fuel in parts of the country by April 2023. The plan to fully implement it in the country is expected by 2025-26. (Times Of India)
Here are some of the top ethanol stocks in India, by market capitalization:
| S. No. | Company Name | Market Cap (Rs. In Cr.) | CMP |
| 1 | Shree Renuka | 11,281.00 | 53 |
| 2 | EID Parry | 9,563.76 | 538.75 |
| 3 | Balrampur Chini | 7,475.69 | 366.5 |
| 4 | Triveni Engineering | 6,613.21 | 273.55 |
| 5 | Bannari Amman Sugars | 3,424.40 | 2,730.85 |
| 6 | Dalmia Sugar | 2,869.70 | 354.55 |
| 7 | Bajaj Hindusthan | 1,935.20 | 15.15 |
| 8 | Dwarikesh Sugar | 1,822.76 | 96.8 |
| 9 | Andhrsugar | 1,757.22 | 129.65 |
| 10 | Dhampur Sugar | 1,485.42 | 223.75 |
1. Shree Renuka Sugars
The first company on our list of ethanol stocks in India is Shree Renuka Sugars. The company is one of the largest producers of sugar and ethanol in India.
They have a total of 8 facilities, which include 6 sugar plants and 2 refineries, all located in India. The company had a record of sugar cane crushed in FY 2022, 56,67,827 metric tonnes.
Shree Renuka sells sugar under their own flagship brand, “Madhur”. The by-product of their sugar manufacturing gives them ethanol and bagasse. They make specifically 3 types of ethanol – Absolute Alcohol, Extra Neutral Alcohol, and Rectified Spirit.
The ethanol is made in 3 distilleries, all located in the Northern region of Karnataka. At their peak productivity, they produce around 900 kilolitres per day.
The bagasse is used to generate electrical and thermal energy in their power plants, located in close proximity to the sugar plants.
| CMP | ₹ 53.0 | Market Cap (Cr.) | ₹ 11,292 Cr. |
| EPS | ₹ -0.26 | Stock P/E | – |
| ROCE | – | ROE | – |
| Face Value | ₹ 1.00 | Book Value | ₹ -4.37 |
| Promoter Holding | 62.5 % | Price to Book Value | – |
| Debt to Equity | – | Dividend Yield | 0.00 % |
| Net Profit Margin | -2.00 % | Operating Profit Margin | 6.53 % |
Shree Renuka Sugars is a mid-cap sugar manufacturer, with a market cap of ₹11,292 Crores. It is also the biggest sugar stock by market capitalization on our list of ethanol stocks in India.
For the financial year 2022, Shree Renuka posted revenues of ₹6,431 crores, with an operating profit margin of 6 percent. For the year ending FY 2022, they posted net losses of – ₹137 crores. Due to losses, many ratios for the stock are negative, such as net profit margins, EPS, and net profit margin.
Shareholding shows that the company’s promoters increased their stake from 58.3 percent in June 2020 to 62.48 percent. The 5-year returns of Shree Renuka Sugars make it a multi-bagger sugar and ethanol stock, giving a staggering return of 265.8%.
2. EID Parry
Part of the centuries-old Murugappa group, EID Parry (India) is the oldest sugar manufacturer in India. It was founded in 1788 and is currently headquartered in Chennai, India. The company has a dominant position in South India.
The company has 13 plants and a distillery capacity of 297 KLPD (Financial Statements FY 2022). EID Parry manufactures and sells sugar under its own flagship brand, “Parry’s”.
Besides producing sugar and ethanol, the company also has a power generation business and the production of nutraceuticals.
| CMP | ₹ 543 | Market Cap (Cr.) | ₹ 9,631 Cr. |
| EPS | ₹ 59.1 | Stock P/E | 9.29 |
| ROCE | 37.1 % | ROE | 18.5 % |
| Face Value | ₹ 1.00 | Book Value | ₹ -4.37 |
| Promoter Holding | 44.5 % | Price to Book Value | – |
| Debt to Equity | 0.4 | Dividend Yield | 2.02 % |
| Net Profit Margin | 6.75 % | Operating Profit Margin | 9.37 % |
Financial Performance Of EID Parry
EID Parry (India) is a small-cap sugar manufacturing company, with a market capitalization of ₹9,631 crores. FY 2022 was one of the best years for the company as reflected in its annual report.
They posted record sales of ₹23,528 crores, the highest in the company’s recent history. Naturally, their operating profits (₹2,382 crores) and net profits (₹1,574 crores) are also at a record high.
The stock P/E of EID Parry is 9.29, much lower than that of its industry at 15.4, hinting at an undervaluation of its share price. The company’s ROE (18.5 percent) and ROCE (27.1 percent) make it one of the best performers in the industry.
The D/E ratio of EID Parry is around 0.4, which is within the ideal range. The promoters of EID Parry, The Murugappa group, own 44.5 percent of the company.
There has been a minute selling of promoter stakes. As of September 2020, the promoters held 44.7 percent. The 5-year returns of EID Parry are around 65.7 percent in green, slightly lower than its peers.
3. Balrampur Chini Mills
At #3, we have Balrampur Chini Mills. The company was founded in 1975, and they started their business through sugar manufacturing. Headquartered in Kolkata, the company owns 10 sugar factories, four distilleries, and ten cogeneration units.
Of the total revenues, the majority comes from sugar production (80.6 percent) and distilleries (18.9 percent), according to their FY 2022 report. Their distilleries have a capacity of 560 KLPD.
Financial Performance Of Balrampur Chini Mills
| CMP | ₹ 363 | Market Cap (Cr.) | ₹ 7,407 Cr. |
| EPS | ₹ 14.1 | Stock P/E | 25.6 |
| ROCE | 16.1 % | ROE | 17.3 % |
| Face Value | ₹ 1.00 | Book Value | ₹ 135 |
| Promoter Holding | 42.4 % | Price to Book Value | 2.69 |
| Debt to Equity | 0.18 | Dividend Yield | 0.69 % |
| Net Profit Margin | 9.60 % | Operating Profit Margin | 9.78 % |
Balrampur Chini is a small-cap sugar and ethanol stock with a market cap of ₹7,407 crores. FY 2022 saw the company post its highest 10-year revenues at ₹4,846 crores.
However, sales growth has stagnated as it has more or less been the same for 3 consecutive financial years. The same pattern can be seen for the net profits as well, which was ₹ 465 crores for FY 2022, and an operating profit margin of 15 percent.
The company has a good ROE (17.3 percent) and ROCE (16.1 percent), well within the ideal figures. The company has also managed its debt well, with a D/E ratio of 0.18. Coming to the stock price, its P/E is slightly high at 25.6 when compared to that of its industry (15.4).
Now, coming to the shareholding of Balrampur Chini: 42.4 percent of the company is owned by the promoters. They have upped their stake by almost 1 percent between 2021 and 2022. Balrampur Chini is one of the best-performing ethanol stocks in India, giving a 227 percent return in 5 years.
4. Triveni Engineering Industries
Triveni Engineering is a 91-year-old sugar and ethanol company. It was incorporated in 1932 as The Ganga Sugar Corporation.
They have a diversified business, operating in four different sectors – Sugar Manufacturing, Ethanol Production, Power Transmission, and Waste Water Treatment. The company’s sugar and ethanol operations are integrated, like most sugar and ethanol stocks in India.
Financial Performance Of Triveni Engineering Industries
| CMP | ₹ 272 | Market Cap (Cr.) | ₹ 6,575 Cr. |
| EPS | ₹ 70.8 | Stock P/E | 16.8 |
| ROCE | 21.1 % | ROE | 24.8 % |
| Face Value | ₹ 1.00 | Book Value | ₹ -4.37 |
| Promoter Holding | 62.5 % | Price to Book Value | 1.98 |
| Debt to Equity | 0.26 | Dividend Yield | 0.00 % |
| Net Profit Margin | -2.00 % | Operating Profit Margin | 6.53 % |
Triveni Engineering is a small-cap ethanol stock, with a market cap of ₹6,575 crores. The diversified company has a multi-faceted business model, operating in both consumer goods and engineering operations. FY2022 saw them post sales of ₹4,291 crores, down from ₹4,674 crores in FY2021.
But with an improved operating margin of 15 percent, the company’s net profits for FY2022 were ₹424 crores against FY2021’s net profits of ₹295 crores.
The company has a positive ROE and ROCE of 24.8 percent and 21.1 percent respectively. Its P/E ratio of 16.8, brings it quite close to its Industry P/E of 15.4. The company has also maintained an ideal D/E ratio of 0.26.
The shareholding pattern of Triveni Engineering shows a drop in promoter holding. As of the quarter ending September 2022, the promoters held 68.25 percent.
In the following quarter of December 2022, that figure dropped to 61.22 percent. Triveni Engineering is one of the best-performing ethanol stocks in India, giving an immense return of 372.7 percent return in 5 years.
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In Closing
Ethanol is a multi-purpose by-product of sugar production, and that is why almost all ethanol-making companies are primarily sugar-making companies. This provides them with a double advantage of selling sugar and also producing ethanol as a profitable by-product.
The widespread usage of ethanol provides a business opportunity, both domestically and internationally to these ethanol stocks in India. That’s all for this article. We hope you found it informative and interesting. As always, Happy Investing!
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