Best Ethanol Stocks in India (2024)

Last Updated on May 15, 2024 by Aishika Banerjee

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.

Top 10 Ethanol Stocks in India based on 1Y Return

Note: The data on the list of ethanol making company share prices is dated 29th April, 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 Limited is an ethanol making company in India that manufactures sugar and distillery products. The Sugar segment includes products such as sugar, molasses, and bagasse, while the distillery segment includes products such as liquor and malt. Upon evaluating this small-cap ethanol stock on the Tickertape Scorecard, the company recorded quite high profitability scores. Further analysis on the scorecard shows that the stock has been one of the top-performing stocks, with a score of 10 in annualised returns and 10 in absolute returns. 

Gayatri Sugars Ltd

Gayatri Sugars Limited is an ethanol making company in India that manufactures sugar and related products. Its business segments comprise sugar and distillery, which produces ethanol, impure spirits, molasses, and bagasse. Evaluating the Tickertape scorecard for India’s ethanol-making company reflects a positive performance score of 8. Further analysis shows a positive overview of profitability and efficiency, with a score of 7.3 for both cash flow and net profit margin. 

Bajaj Hindusthan Sugar Ltd

Bajaj Hindusthan Sugar Limited, formerly Bajaj Hindusthan Limited, is a holding company that manufactures sugar, alcohol, and power. On Tickertape Scorecard, this sugar company reflects a positive profitability score. The stock has been performing well, with a healthy profitability score of 7/10. Furthermore, the stock is not in the overbought zone right now, making it an ideal time for investors to consider it. 

Sir Shadi Lal Enterprises Ltd

Sir Shadi Lal Enterprises Ltd is an ethanol company in India that manufactures sugar and alcohol products. The company operates in two segments: distillery and sugar. This ethanol company in India has reflected free cash flow growth of 17.57% over the last five years, significantly higher than the industry average of -9.2%. The stock is also not in the overbought zone, so now might be the ideal time to consider it. 

Khaitan (India) Ltd

Khaitan (India) Ltd is an Indian holding company that manufactures sugar for the Indian consumer market. The Tickertape Scorecard presents an insight into the company’s free cash flow growth, which has been 30.75% over the last 5 years, higher than the industry average of -9.2%. The stock also shows good signs of profitability, with a score of 6.9 overall in terms of profitability and efficiency. Furthermore, the stock is not in the overbought zone, making it a good time for investors to consider it. 

Rajshree Sugars & Chemicals Ltd

Rajshree Sugars & Chemicals Limited is an India-based company engaged in the sugar, distillery, power, and biotechnology business. The Company operates through three segments: sugar, Cogeneration, and Distillery. The Company has installed downstream industries for producing alcohol and cogeneration of power by using byproducts of the sugar industry, such as molasses and bagasse. The Tickertape Scorecard depicts a score of 7.1 in profit and 6.8 in cash flow. The stock is also not in the overbought zone, making it ideal for investors to consider. 

Magadh Sugar & Energy Ltd

Magadh Sugar & Energy Limited is an India-based company that manufactures sugar, ethanol, co-generation of power, and other products derived from sugar manufacturing. The Company operates through three segments: sugar, distillery, and co-generation. The Tickertape Scorecard reflects scores of 7.5 and 7.4 for profit and cash flow, respectively. The ethanol company share is currently underpriced and not in the overbought zone, making it ideal for investor consideration, at this point. 

KCP Sugar and Industries Corp Ltd

K.C.P. Sugar and Industries Corporation Limited manufactures sugar and its by-products, industrial chemicals, cogeneration, biotech, carbon dioxide and calcium lactate. The current ratio of 181.94% is quite high compared to the industry average of 97.98%. The Tickertape Scorecard of this company shows positive signs of profitability with an overall score of 7.2 in terms of profitability and efficiency . Furthermore, the stock is currently underpriced and not in the overbought zone, making it ideal for investor consideration, 

Sakthi Sugars Ltd

Sakthi Sugars Limited is in the sugar, industrial alcohol, power, and soya products industry. The ethanol company in India has had revenue growth at a yearly rate of 23.05%, which is significantly high compared to the industry average of 9.46%. Furthermore, the company’s market share has increased from 0.9% to 1.58% over the last five years. According to the Tickertape Scorecard, the company has a score of 8.1 in terms of profit and shows good signs of efficiency and profitability. The stock is also not in the overbought zone, making it ideal for investors to consider currently. 

Kothari Sugars and Chemicals Ltd

Kothari Sugars and Chemicals Ltd is an Indian company that produces plantation white sugar, alcohol, and power. Over the last five years, revenue has grown at a yearly rate of 16.28%, higher than the industry average of 9.46%. Furthermore, the company has also seen an increase in its market share from 0.48% to 0.64% over the last five years. The Tickertape Scorecard also shows positive scores for profitability and efficiency, with a score of 7.2. It is also currently in the underpriced and overbought zone, making it ideal for investors to consider. 

Top Ethanol Companies with Highest Net Income (Q)

Note: The data is dated 29th April 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 29th April, 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 green energy 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 renewable energy 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!

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 have a direct impact on 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.

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.
• Financial Evaluation: Companies with robust financial statements that maintain a healthy balance sheet and generate consistent revenue growth and profitability can act as key positive indicators.
• 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.

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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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