Best Ethanol Stocks in India to Invest in 2024

Last Updated on Sep 1, 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 30th August 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

Piccadily Agro Industries Ltd

Piccadily Agro Industries Ltd was incorporated in 1994 and operates primarily in the agro-industrial sector, focusing on manufacturing and marketing alcoholic beverages and sugar. The company has diversified its operations into the distillery segment and is also involved in the co-generation of power.

As of 30th August 2024, the market capitalisation of Piccadily Agro Industries Ltd stands at Rs. 7,196.67 cr., with a closing price of Rs. 800.95. The stock has a PE ratio of 65.57. Over the past year, the company has delivered a return of 593.10%.

Sir Shadi Lal Enterprises Ltd

Sir Shadi Lal Enterprises Ltd, established in 1933, is engaged in the production of sugar, molasses, and alcohol. It operates a sugar mill, distillery, and power generation units. The company is known for its long-standing presence in India’s sugar industry.

The market capitalisation of Sir Shadi Lal Enterprises Ltd is Rs. 202.73 cr., and the stock’s closing price is Rs. 400.65. The PE ratio is -22.08. Over the last year, the company achieved a return of 200.22%.

Kesar Enterprises Ltd

Kesar Enterprises Ltd was founded in 1933 and operates in the sugar industry. The company is engaged in the manufacturing and sale of sugar, alcohol, and other by-products. It also operates in the warehousing sector. The market capitalisation of Kesar Enterprises Ltd is Rs. 162.94 cr., with a closing price of Rs. 168.95. The company’s PE ratio stands at 1.95, and its 1-year return is 106.29%.

SBEC Sugar Ltd

SBEC Sugar Ltd was incorporated in 1991 and primarily operates in the production of sugar and its by-products. The company manages sugar mills and has a presence in the northern region of India. The market capitalisation of SBEC Sugar Ltd is Rs. 309.85 cr., with a closing price of Rs. 68.27. The PE ratio of the company is -25.59. Over the past year, SBEC Sugar Ltd has delivered a return of 95.06%.

Magadh Sugar & Energy Ltd

Magadh Sugar & Energy Ltd, incorporated in 1932, is a major player in the sugar industry, involved in manufacturing sugar, ethanol, and power generation. The company operates several sugar mills across India. Magadh Sugar & Energy Ltd has a market capitalisation of Rs. 1,230.48 cr., and the stock’s closing price is Rs. 903.85. The PE ratio is 10.57, and the 1-year return stands at 85.01%.

KCP Sugar and Industries Corp Ltd

KCP Sugar and Industries Corp Ltd, founded in 1995, is engaged in the manufacturing of sugar, ethanol, and related products. It is one of the leading sugar producers in India, operating in both domestic and international markets.

The market capitalisation of KCP Sugar and Industries Corp Ltd is Rs. 610.47 cr., with a closing price of Rs. 55.20. The company’s PE ratio is 9.23, and it has achieved a 1-year return of 75.80%.

Bajaj Hindusthan Sugar Ltd

Bajaj Hindusthan Sugar Ltd was established in 1931 and is one of the largest sugar manufacturing companies in India. The company is involved in the production of sugar, ethanol, and power and operates several sugar mills in the country.

The market capitalisation of Bajaj Hindusthan Sugar Ltd stands at Rs. 5,196.71 cr., with a closing price of Rs. 42.65. The PE ratio is -60.14, and the company has delivered a 1-year return of 74.80%.

E I D-Parry (India) Ltd

E I D-Parry (India) Ltd, founded in 1788, is a leading player in the sugar industry. The company manufactures sugar, bioproducts, and fertilisers and has a significant presence in India’s agri-business sector. E I D-Parry (India) Ltd has a market capitalisation of Rs. 14,474.05 cr., with a closing price of Rs. 829.40. The stock’s PE ratio is 16.09, and the 1-year return is 74.06%.

Khaitan (India) Ltd

Khaitan (India) Ltd was established in 1936 and operates primarily in the manufacturing of sugar and related products. The company has diversified its operations into various agro-industrial sectors over the years. The market capitalisation of Khaitan (India) Ltd is Rs. 48.94 cr., with a closing price of Rs. 98.06. The PE ratio is 36.25, and the stock has provided a 1-year return of 69.36%.

Shree Hanuman Sugar & Industries Ltd

Shree Hanuman Sugar & Industries Ltd was founded in 1932 and is involved in the manufacturing and marketing of sugar and its by-products. The company operates sugar mills and has been part of India’s sugar industry for several decades. The market capitalisation of Shree Hanuman Sugar & Industries Ltd is Rs. 16.11 cr., with a closing price of Rs. 8.88. The PE ratio is -61.98, and the 1-year return is 68.82%.

Top Ethanol Companies with Highest Net Income (Q)

Note: The data is dated 30th August 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 30th August 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!

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.

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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