Introduction
Ethanol is a versatile by-product produced by fermenting sugarcane juice. It has applications in various sectors, such as cosmetics, plastics, plasticisers, and polishes. The ethanol industry in India is experiencing a surge, with the government seeking to switch to cleaner energy alternatives. If you want to capitalise on this growing industry, you must watch out for the top ethanol-producing companies in India.
Ethanol market in India
Due to the rising stature of the renewable energy sector and the Indian government’s target to achieve 20% ethanol-blended petrol by 2025, the country’s ethanol stock market is on the rise. Many government initiatives to incentivise sugar mills and increase the production of ethanol have also emerged.
In 2023, the Indian ethanol market attained a valuation of USD 6,512.27 million. It is expected to continue growing at a CAGR of 9.16% and achieve a valuation of USD 4.15 billion by 2029. As a result, ethanol stocks present a unique opportunity, with investors showing a keen interest in the sector.
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Seven ethanol stocks you cannot miss out on​​​​​​​
1. Shree Renuka Sugars Ltd.
Shree Renuka Sugars is owned by the Singapore-based Wilmar Group. It produces, refines, and trades sugar and also produces ethanol. It is India’s largest ethanol producer and manufacturer and one of the leading ethanol-producing companies. Based in Mumbai, the company also produces and sells bio-pesticides and bio-fertilisers. As of March 7, 2024, Shree Renuka Sugars had a market capitalisation worth Rs. 9,716 crore.
2. Dalmia Bharat Sugar and Industries Ltd.
Dalmia Bharat Sugar and Industries was founded by Jaidayal Dalmia in 1935. It is based out of Uttar Pradesh and manufactures sugar, refractory products, power, industrial alcohol, etc. In 1939, Dalmia Bharat Sugar also ventured into the cement industry. It is one of the largest producers of sugar in India. The company’s market capitalisation as of March 7, 2024, was Rs. 3,195 crore.
3. Dhampur Sugar Mills Ltd.
Dhampur Sugar Mills Ltd. was established in May 1933 by the Goel family of Bareilly, Uttar Pradesh. It manufactures and sells sugar and also operates a paper unit in Sikandrabad. It also produces and sells chemicals like ethyl ethanol. Dhampur Sugar Mills Ltd. had a market capitalisation of Rs. 1,596 crore as of March 7, 2024.
4. Bannari Amman Sugars Ltd.
Bannari Amman Sugars is a major industrial conglomerate based out of Tamil Nadu. It is engaged in manufacturing and trading services, with a portfolio comprising sugars, granite, liquor, alcohol, wind power energy, etc. As of March 7, 2024, Bannari Amman Sugars reported a market capitalisation of Rs. 3,237 crore.
5. Triveni Engineering and Industries Ltd.
Triveni Engineering and Industries is a conglomerate operating in two business segments - agriculture and engineering. The agricultural segment focuses on the production of sugar, alcohol, and power, while the engineering segment focuses on power transmission, defence, and water and wastewater treatment solutions. The company’s market capitalisation as of March 7, 2024, was Rs. 7,293 crore.
6. Bajaj Hindusthan Sugar Ltd.
Bajaj Hindusthan Sugar produces sugar, power, and alcohol. It is a recognised sugar producer and the fourth largest in the country. It has 14 facilities in Uttar Pradesh. It was founded in 1931 and has its headquarters in Mumbai. Bajaj Hindusthan Sugar reported a market capitalisation of Rs. 4,234 crore as of March 7, 2024.
7. Dwarikesh Sugar Industries Ltd.
Dwarikesh Sugar Industries divides its operations into three segments - distillery, co-generation, and sugar. It manufactures sugar, power, ethanol, and sanitisers. It set up a new ethanol plant in Uttar Pradesh in July 2021. The market capitalisation of Dwarikesh Sugar Industries was Rs. 1,523 crore as of March 7, 2024.
Summary
The demand for ethanol is expected to increase in the future due to the government’s financial incentives and the awareness to opt for eco-friendly alternatives. This rising demand will have a positive impact on the stocks of ethanol-producing companies. The above-mentioned list comprises seven top ethanol stocks to buy in 2024. However, do your careful research to understand the inherent risks and market dynamics. The performance of the ethanol industry is closely linked to the sugar sector and the highly volatile oil prices.
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