Top Ethanol Stocks in India: The energy demand in our country is continuously rising due to an expansion in the economy, population growth, evolving lifestyles, and rising spending power. Observing the increasing demand prevailing in India’s economy and similarly on a global level, the Ethanol producing companies have a huge scope of operations over the near future. It’s time to grab the opportunities and eventually become self-sufficient.
Here in this article, we will have a walkthrough about what we mean by Ethanol, Industry Overview and finally laying the top ethanol stocks in India.
What is Ethanol?
Before we dive deeper, let us first know what is ethanol. It is an organic compound colorless liquid with a characteristic wine-like odor and pungent taste. It is a psychoactive recreational drug and the active ingredient in alcoholic drinks and is naturally produced by the fermentation process of sugars by yeasts or via petrochemical processes such as ethylene hydration.
It is also considered an agricultural by-product which is mainly obtained from the processing of sugar from sugarcane but could also be procured from other sources such as rice husk or maize. Currently, Ethanol makes up 10% of the petrol we use in our vehicles on a daily basis.
Industry Overview
India imports around 80% of its crude oil which makes it one of the largest petroleum product importers in the world. Around 98% of the fuel requirement in the road transportation sector is been met by fossil fuels and the remaining 2% by biofuels.
With such increasing demand, it becomes necessary to look for in-house production to save on resources. The Indian government is considering several solutions to the oil and petroleum imports, including increasing renewable energy output, using Ethanol as a substitute for gasoline, and so forth.
The National Policy on Biofuels, in 2018, provided an indicative target of 20% ethanol blending under the Ethanol Blended Petrol (EBP) Programme by 2025. India has adopted ethanol blending in petrol in order to reduce vehicle exhaust emissions. India’s net import of petroleum was millions of tonnes.
Most of the petroleum is used by vehicles and therefore a successful 20% ethanol blending program will be able to save a lot of capital, foreign exchange rather, and efforts put in for the nation.
‘Centrum Broking’ noted that the demand for ethanol blending is estimated to reach 1,016 crore liters from the current 425 crore liters over ESY21-26 clocking a CAGR of 25.1 percent.
Top Ethanol Stocks In India
Following are India’s top Ethanol stocks on the basis of their Market cap. We will race through an overview of the operations of each of the companies, and their financials and conclude with observations on how viable and promising the industry looks to be in the near future.
Top Ethanol stocks in India #1 – Shree Renuka Sugars
Key Metrics
| CMP | ₹ 47.20 | Market Cap (Cr.) | ₹ 10,763 |
| EPS | ₹ -0.39 | Stock P/E | 0 |
| RoCE | 8.13% | RoE | 0.00% |
| Promoter Holding | 62.48% | Book Value | ₹ -4.37 |
| Debt to Equity | -2.94 | Price to Book Value | -4.26 |
| Net Profit Margin | -2.13% | Operating Profit Margin | 6.54% |
Shree Renuka Sugars Limited, established in the year 1995, is a Small Cap company (having a market cap of Rs 10,300 Crore) involved in the business of global agribusiness and bio-energy corporation.
The Company is one of the largest sugar producers in the world and the leading manufacturer of sugar in India. The company operates eleven mills globally (four in Centre-South Brazil and seven in India) with integrated ethanol and power co-generation capacity. It also has two large port-based sugar refineries in India.
Digging into the financials of the company, it can be observed that the company is striving hard to increase its customer base by increasing sales from Rs 5,648.52 crores in FY20-21 to Rs 6,432.63 crores in FY21-22. Despite that fact, the company has not been successful in generating profits out of its operations and thus PAT figures are in red as the company has widened its losses to Rs 137 crores in FY21-22 compared with a loss of Rs 117 crores in FY20-21.
Top Ethanol stocks in India #2 – E.I.D. – Parry (India) Limited
Key Metrics
| CMP | ₹ 524 | Market Cap (Cr.) | ₹ 9,569 |
| EPS | ₹ 60.33 | Stock P/E | 8.84 |
| RoCE | 39.56% | RoE | 31.81% |
| Promoter Holding | 44.55% | Book Value | ₹ 323 |
| Debt to Equity | 0.15 | Price to Book Value | 1.51 |
| Net Profit Margin | 6.68% | Operating Profit Margin | 11.16% |
E.I.D. – Parry (India) Limited, established in 1788, and incorporated in 1975, is a Mid Cap company (having a market cap of Rs 9,471 Crore) engaged in the business of Sugar and Nutraceuticals. Headquartered in Chennai, the Company is a part of the INR 570 Billion Murugappa Group, one of India’s leading business conglomerates.
The Company holds the distinction of setting up India’s first sugar plant at ‘Nellikuppam’ in 1842 and even today strives hard to pioneer new paths in each of its businesses.
Amongst the leading sugar manufacturers in India, E.I.D. Parry’s 9 sugar plants are spread across various regions of Karnataka, Andhra Pradesh, and Tamil Nadu which contain state-of-the-art plants with a total sugarcane crushing capacity of 40,300 MT per day (TCD) and a Distillery capacity of 297 KL per day across units are located at Nellikuppam, Pugalur, and Sivaganga in Tamil Nadu, Sankili in Andhra Pradesh and across various regions in Karnataka.
Having a look at the financials of the company, it has achieved a great increase in revenue as well as net profit on a YoY basis. Revenues shifted from Rs 18,595 crores in FY20-21 to Rs 23,532 crores in FY21-22. Net profits, with the same alignment, saw a shift from Rs 998 crores in FY20-21 to Rs 1,573 crores in FY21-22.
Top Ethanol stocks in India #3 – BALRAMPUR CHINI MILLS
Key Metrics
| CMP | ₹ 376 | Market Cap (Cr.) | ₹ 8,009 |
| EPS | ₹ 13.38 | Stock P/E | 29.94 |
| RoCE | 15.76% | RoE | 16.80% |
| Promoter Holding | 42.43% | Book Value | ₹ 135 |
| Debt to Equity | 0.44 | Price to Book Value | 2.9 |
| Net Profit Margin | 9.34% | Operating Profit Margin | 9.84% |
Balrampur Chini Mills Limited, founded in 1975, is one of the largest sugar manufacturing companies in India. It is one of the first sugar companies in the country to diversify its business from sugar to distillery and cogeneration.
With deep and profound sectorial understanding, the Company’s innovative ways to approach manufacturing processes have enabled them to successfully create a wide range of products ranging from Molasses, Alcohol, Ethanol, and Bagasse to Power Generation.
The Company is led by Mr. Vivek Saraogi who is the former President of the Indian Sugar Mills Association, under whom t the Company soared to new heights. Balrampur Chini possesses a cane crushing capacity of 77,500 tonnes per day, a distillery capacity of 1050 KL per day, and a saleable co-generation capacity of 175.7 megawatts.
Looking at the financials of the company, it has consistently been able to grow its revenue figures over a period of the last 3 financial years, i.e., from Rs 4,741 crores in FY19-20 to Rs 4,846 crores in FY21-22. In spite of such a positive scenario with the revenues, the company has been up to the mark when it comes to the PAT numbers.
Rather, they have reported a downfall in the numbers after the covid year passed which is Rs 460 crores in FY20-21 and Rs 453 crores in FY21-22.
Top Ethanol stocks In India #4 – TRIVENI ENGINEERING & INDUSTRIES
Key Metrics
| CMP | ₹ 286 | Market Cap (Cr.) | ₹ 6,349 |
| EPS | ₹ 78.15 | Stock P/E | 3.71 |
| RoCE | 18.97% | RoE | 21.07% |
| Promoter Holding | 61.23% | Book Value | ₹ 137 |
| Debt to Equity | 0.82 | Price to Book Value | 2.38 |
| Net Profit Margin | 7.77% | Operating Profit Margin | 10.3% |
Triveni Engineering & Industries Ltd, incorporated in the year 1932, is a Small Cap company (having a market cap of Rs 6,349 Crore). It is one of the largest integrated sugar manufacturers in India and a market leader in their engineering businesses and involved in the business of power transmission, water & wastewater treatment solutions, and defense.
Going through the financials of the company, the revenues of the company have shown a downfall from Rs 4,674 crores in FY20-21 to Rs 4,291 crores in FY21-22. On the other side, the net profit figures reported has an opposing effect with profits of Rs 293 crores in FY20-21 v/s Rs 365 crores in FY21-22.
Top Ethanol stocks in India #5 – BANNARI AMMAN SUGARS
Key Metrics
| CMP | ₹ 2,850 | Market Cap (Cr.) | ₹ 3,635 |
| EPS | ₹ 93.90 | Stock P/E | 31.17 |
| RoCE | 6.64% | RoE | 5.76% |
| Promoter Holding | 58.70% | Book Value | ₹ 1,167 |
| Debt to Equity | 0.67 | Price to Book Value | 2.29 |
| Net Profit Margin | 4.00% | Operating Profit Margin | 11.06% |
Bannari Amman Sugars is one of the largest Industrial Conglomerates in South India with a wide range of services which includes manufacturing, trading, and Service activities. Manufacturing and trading activities mentioned comprise sugar, alcohol, liquor, granite, etc.
The main focus area of the company is with respect to organized business growth through value-based management which in turn contributes to a better society.
Evaluating the financials of the company, it has been able to report healthy revenue figures post covid with Rs 1,563 crores in FY20-21 and Rs 1,998 crores in FY21-22. Net profit figure, in a contrast, has gone down from Rs 92 crores in FY20-21 to Rs 80 crores in FY21-22.
List of Top Ethanol Stocks in India
Following is the tabular representation of the top 10 Ethanol stocks in India primarily on the basis of Market Capitalization.
| Sr No | Company Name | CMP (Rs) | Market Cap (Rs Cr) |
|---|---|---|---|
| 1 | Shree Renuka Sugars Ltd. | 47 | 9,563 |
| 2 | E.I.D. - Parry (India) Ltd. | 524 | 9,135 |
| 3 | Balrampur Chini Mills Ltd. | 376 | 7,379 |
| 4 | Triveni Engineering & Industries Ltd. | 286 | 6,903 |
| 5 | Bannari Amman Sugars Ltd. | 2,750 | 3,448 |
| 6 | Dalmia Bharat Sugar And Industries Ltd. | 328 | 2643 |
| 7 | Bajaj Hindusthan Sugar Ltd. | 13 | 1,692 |
| 8 | Andhra Sugars Ltd | 119 | 1615 |
| 9 | Dwarikesh Sugar Industries Ltd. | 88 | 1,665 |
| 10 | Dhampur Sugar Mills Ltd. | 218 | 1449 |
Conclusion
In this article, we looked at the top ethanol stocks in India. In addition to that, we also looked at the other stocks that are engaged in the production of ethanol. Observing the plethora of resources the companies are equipped with and the matching opportunities they could get to perform their operations, it can prove to be a great benchmark setter throughout the globe and create an image over a global platform.
That’s all for this article. Do you hold any of these ethanol stocks? Let us know in the comments below.
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