Top 5 Ethanol Stocks in India to Watch for in 2024
With the demand for renewable energy rising, ethanol stocks have become a profitable investment option in India. This detailed guide highlights the leading ethanol companies in India and offers useful information for investors who want to tap into this growing market.
Table of Contents
Understanding Ethanol
Ethanol is an alcohol that can be used as both fuel and solvent. It is a clear colorless liquid with a slight sweet smell. Produced by fermenting and distilling grains, fruits or vegetables that contain sugar or starch, it finds applications across several industries including cosmetics, pharmaceuticals and personal care products.
Top 5 Ethanol Stocks in India
1. Shree Renuka Sugars Ltd
NSE Symbol: RENUKA
Market Cap | ₹ 9,387 Cr. | Book Value | ₹ -4.37 |
Stock P/E | – | Return on equity | – |
ROCE | 6.23 % | High / Low | ₹ 68.8 / 36.4 |
Debt to equity | – | Dividend Yield | 0.00 % |
EPS | ₹ -0.39 | Face Value | ₹ 1.00 |
Profit Var 5Yrs | 13.6 % | Promoter holding | 62.5 % |
The company is headquartered at Mumbai (Maharashtra) and happens to be the largest ethanol manufacturer of India. It has an installed capacity of daily refining 4000 tonnes of sugar & 600 kilolitres per day distillery which makes it one of the most important players in Indian Ethanol Market. Moreover they also generate electricity from bagasse, a sugarcane by-product thereby adding more value to their operation.
2. EID Parry (India) Ltd
NSE Symbol: EIDPARRY
Market Cap | ₹ 8,320 Cr. | Book Value | ₹ 323 |
Stock P/E | 7.90 | Return on equity | 18.5 % |
ROCE | 37.1 % | High / Low | ₹ 673 / 433 |
Debt to equity | 0.40 | Dividend Yield | 2.35 % |
EPS | ₹ 60.4 | Face Value | ₹ 1.00 |
Profit Var 5Yrs | 12.1 % | Promoter holding | 44.5 % |
EID Parry was established way back in 1842 AD making it one among oldest companies as well as pioneers within the Sugar Industry not only in India but across the globe too . With cutting edge technology combined with total sugarcane crushing capacity per day being around 40,300 MT , they are well positioned to take advantage from current boom happening around Ethanol production process itself while also increasing much visibility towards shares prices due becoming major contributor towards this sector very soon indeed.
3. Balrampur Chini Mills Ltd
NSE Symbol: BALRAMCHIN
Market Cap | ₹ 7,994 Cr. | Book Value | ₹ 135 |
Stock P/E | 29.5 | Return on equity | 17.3 % |
ROCE | 16.1 % | High / Low | ₹ 526 / 307 |
Debt to equity | 0.18 | Dividend Yield | 0.63 % |
EPS | ₹ 13.2 | Face Value | ₹ 1.00 |
Profit Var 5Yrs | -5.46 % | Promoter holding | 42.4 % |
Founded during 1975 AD , Balrampur Chini Mills happens to be among biggest Sugar Company In India having diversified its business into distillery along with co generation which includes total number plants situated at Uttar Pradesh. Their distilleries collectively have capacity around 520 KLPD thereby making them a prominent player in the Indian Ethanol Market.
4. Triveni Engineering and Industries Ltd
NSE Symbol: TRIVENI
Market Cap | ₹ 5,935 Cr. | Book Value | ₹ 137 |
Stock P/E | 15.2 | Return on equity | 24.8 % |
ROCE | 21.1 % | High / Low | ₹ 374 / 211 |
Debt to equity | 0.26 | Dividend Yield | 1.20 % |
EPS | ₹ 70.8 | Face Value | ₹ 1.00 |
Profit Var 5Yrs | 5.73 % | Promoter holding | 61.0 % |
Triveni Engineering is one of the largest integrated sugar manufacturers in India having been incorporated back in 1932 AD . Besides producing ethanol, they also deal with power transmission, water as well as waste water treatment solutions among others which places them strategically within this sector.
5. Bannari Amman Sugars Ltd
NSE Symbol: BANARISUG
Market Cap | ₹ 3,400 Cr. | Book Value | ₹ 1,167 |
Stock P/E | 28.9 | Return on equity | 5.88 % |
ROCE | 6.75 % | High / Low | ₹ 3,194 / 1,951 |
Debt to equity | 0.58 | Dividend Yield | 0.37 % |
EPS | ₹ 93.9 | Face Value | ₹ 10.0 |
Profit Var 5Yrs | -10.9 % | Promoter holding | 58.7 % |
Being a leading industrial conglomerate located within South India , Bannari Amman Sugars undertakes various manufacturing activities , trading activities as well service oriented ones too . They are driven by a value based management approach towards organized business growth thus putting themselves closer towards realizing success within ethanol market space.
A Detailed Look at The Indian Ethanol Market
The production of ethanol in India has seen a tremendous increase due to the high demand for renewable energy. This part will discuss these drivers for growth and give an overview of where the Indian ethyl alcohol market stands today.
Government Support and Ethanol Blending Targets
By 2025, India is hoping to achieve a petrol ethanol blend rate of 20%, which goal has since shot up demand for this type fuel stock. In order to promote its use as fuel additive so that it can reduce dependency on crude oil among other things; governments also offer subsidies or any form of financial aid available at their disposal to all known companies involved with producing ethanol will have them supported accordingly.
Renewable Nature of Ethanol
Ethyl alcohol is produced from plants hence considered clean energy. It does not pollute the environment because when burnt, it emits less carbon dioxide gas which cause global warming than any other non-renewable source like coal or petroleum products such as gasoline do during combustion process itself only where certain limits apply.
Reduction in Oil Imports
Furthermore, mixing petrol with alcohol more can decrease India’s dependence on foreign oils, and eventually save a lot of foreign exchange. Continuous works in this line may be productive.
This approach is not only commercially viable but also politically advantageous. It might help to foster good relations with nations like Nigeria that heavily depend on crude oil exports as their main source of revenue; such countries would now be able to dispose off surplus production within the country thereby cutting down on imports from abroad.
Supposing emergencies arise, the effects are likely to be less serious because usually there is some amount of locally produced supplies available locally.
Increase in Ethanol Stocks
Investors have shown great interest towards buying shares related to businesses linked to ethanol as witnessed notable rise prices said stocks across Indian market driven by general industry sentimentality backed up relative performance expectations which only tend to keep growing better and more favorable towards them going forward hence attracting huge interest from potential players looking enter such lucrative areas sooner later.
Tips for Choosing the Right Ethanol Stocks
If you want to invest in this sector, here are some tips that can help you make an informed decision:
Financial Performance: Evaluate the company’s financial health by looking at its profitability and ability to manage debts.
Management Expertise: Study how experienced is the management team when it comes dealing with challenges associated with operating within the ethanol industry.
Government Policies Impact: Understand whether there are any government incentives or regulations affecting production levels of ethyl alcohol because alignment between these policies may affect business performance either positively or negatively.
Supply Chain Stability: It is significant to establish the supply lines of raw materials necessary for any enterprise before injecting money; this is to prevent them from collapsing. Failure to which may lead to a loss of investment since at any stage along the supplier chain from the manufacturer through any middleman or directly down different sources (intermediaries) things might break. But still these impacts would not be too serious in most cases as some supplies can usually be found locally thereby saving time and resources spent on searching overseas or elsewhere.
Conclusion
Investing in stocks related to Ethanol may prove to be lucrative but there are certain things that should be taken into account like financial performance, market position and growth prospectus etc. associated with such entities before making any decisions about where exactly to put one’s money at stake. Similar to other investments; this too has some risk involved therefore it becomes necessary for investors undertake thorough research while also consulting experts if need arises.
Disclaimer: Any stocks mentioned are not recommendations, so it is important to do your own research before investing. Market investments come with risk; please read the documents carefully before making a decision. Risk Disclosure Document should be read before making an investment in Equity Shares, Derivatives or other instruments like Mutual Funds etc as they are subject to market risks and there is no guarantee that objectives will be achieved. Senthilstocktrader does not guarantee any returns and past performance may not necessarily be indicative of future results.
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