Top Ethanol (Sugar) Stocks to Buy in NSE India (2024)
Ethanol is a by-product of the sugar industry. A variety of plant sources, such as sugarcane, corn, and wheat, produce this renewable fuel. A blend of gasoline and a clean-burning fuel is used to reduce harmful emissions from vehicles. People consider ethanol a biofuel, and it is one of the most widely used alternative fuels in the world.
Additionally, ethanol producers primarily produce ethanol from sugarcane molasses in India and use it as a fuel additive to gasoline. Thus, due to the rising demand for cleaner energy sources and the government’s shift towards sustainable and green energy sources, the ethanol industry in India is slowly gaining momentum.
As a result, the stock market has shown a keen interest in ethanol stocks, and the ethanol share prices of ethanol-producing companies in India have risen significantly over the years. In this blog, we will explore ethanol stocks in India and how to invest in them.
Top 10 Ethanol Stocks in India Based on 1-yr Return
| Company Name | Market Cap (in Cr) | Share Price | PE Ratio | 1Y Return (%) |
|---|---|---|---|---|
| Piccadily Agro Industries Ltd | ₹7,239.12 | ₹767.35 | 65.96 | 681.38 |
| Sir Shadi Lal Enterprises Ltd | ₹208.87 | ₹397.85 | -22.75 | 194.59 |
| SBEC Sugar Ltd | ₹314.75 | ₹66.05 | -25.99 | 88.07 |
| Khaitan (India) Ltd | ₹49.29 | ₹103.76 | 36.51 | 83.97 |
| Kesar Enterprises Ltd | ₹164.00 | ₹162.70 | 1.96 | 76.57 |
| KCP Sugar and Industries Corp Ltd | ₹628.83 | ₹55.46 | 9.50 | 70.65 |
| E I D-Parry (India) Ltd | ₹14,359.52 | ₹808.75 | 15.96 | 60.07 |
| Bajaj Hindusthan Sugar Ltd | ₹4,981.14 | ₹39.05 | -57.65 | 56.51 |
| Magadh Sugar & Energy Ltd | ₹1,198.92 | ₹850.80 | 10.30 | 46.22 |
| Balrampur Chini Mills Ltd | ₹11,555.19 | ₹572.75 | 21.62 | 42.79 |
Disclaimer: Please note that the above list is for educational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing.
Note: The data on this list of ethanol production companies in India is from 12th September 2024. The data on this list has been taken from the Tickertape Stocks Screener, using the following parameters:
- Sub-sectors: Consumer Staples > Sugar
- 1-yr Return: Sorted from highest to lowest
🚀 Pro Tip: You can use Tickertape’s Stock Screener to research and evaluate stocks with over 200+ filters and parameters.
Top Ethanol Stocks in India: An Overview
Piccadily Agro Industries Ltd
Piccadily Agro Industries Ltd, established in 1994, is an Indian company primarily engaged in sugar manufacturing and its by-products. The company operates in two segments: sugar production, including molasses and bagasse, and the manufacturing of liquor. As of 12th September 2024, the company had a market capitalisation of Rs. 7,239.12 cr., and its share price closed at Rs. 767.35. Over the last 5 years, the company’s revenue has grown at a yearly rate of 16.33%, higher than the industry average of 9.08%, and its market share increased from 0.67% to 0.91%.
Sir Shadi Lal Enterprises Ltd
Sir Shadi Lal Enterprises Limited was originally established as “The Upper Doab Sugar Mills Limited” in 1933 by Rt. Hon’ble Sir Shadi Lal. The ethanol manufacturing company in India was renamed in 1982. After the passing of Lala Rajendra Lal in 1985, Lala Narendra Lal took over, leading the company through significant growth. As of 12th September 2024, Sir Shadi Lal Enterprises Ltd had a market capitalisation of Rs. 208.87 cr., and its share price closed at Rs. 397.85. Over the last 5 years, the company’s debt-to-equity ratio has been -9.23%, lower than the industry average of 104.56%.
SBEC Sugar Ltd
Incorporated in 1991, SBEC Sugar Limited began producing high-quality white crystal sugar in 1994. The company’s plant is situated in the sugarcane-rich region of Western Uttar Pradesh, with a daily crushing capacity of 4,800 metric tonnes of sugarcane. The firm benefits from advanced sugar manufacturing technology, supported by its promoter company, a global leader in project design, engineering, and consultancy. As of 12th September 2024, SBEC Sugar Ltd had a market capitalisation of Rs. 314.75 cr., and its share price closed at Rs. 66.05. Over the last 5 years, the company’s revenue has grown at a yearly rate of 9.42%, higher than the industry average of 9.08%.
Khaitan (India) Ltd
Khaitan (India), established in 1936 and part of the Khaitan Group, expanded through a merger with Khaitan Agro Complex in January 1994. The company is involved in cultivating sugarcane and producing crystal sugar, which is marketed under the Khaitan brand. As of 12th September 2024, Khaitan (India) Ltd had a market capitalisation of Rs. 49.29 cr., and its share price closed at Rs. 103.76. The company had 1-yr returns of 83.97 and a PE ratio of 36.51.
Kesar Enterprises Ltd
Kesar Enterprises (KEL), formerly known as The Kesar Sugar Works, was established in August 1933 and is part of the Kilachand Devchand group. Currently led by Harsh R Kilachand, the Chairman and Managing Director, KEL is involved in producing sugar, industrial alcohol, and country liquor. As of 12th September 2024, Kesar Enterprises Ltd had a market capitalisation of Rs. 164.00 cr., and its share price closed at Rs. 162.70. The ethanol making company in India had a return on equity (ROE) of 66.48%, and its net profit margin is 13.41%.
KCP Sugar and Industries Corp Ltd
KCP Sugar and Industries Corporation Limited was established in 1995 through a Scheme of Arrangement with ‘The KCP Ltd’, approved by the High Court of Madras. The company primarily manufactures sugar and industrial alcohol. In 1996, it increased its acetic acid production capacity to 3,300 metric tonnes. As of 12th September 2024, KCP Sugar and Industries Corp Ltd had a market capitalisation of Rs. 628.83 cr., and its share price closed at Rs. 55.46. Over the last 5 years, the company’s debt-to-equity ratio has been 64.16%, lower than the industry average of 104.56%.
E I D-Parry (India) Ltd
EID Parry (India) Ltd is one of India’s largest business groups, known for manufacturing and marketing a diverse range of products, including sugar, bio-pesticides, and nutraceuticals. The company has established a global presence through partnerships with organisations like the Sugarcane Research Institute in Australia, the Sugar Processing Research Institute in Louisiana, Tate and Lyle International in the UK, and Mitr Phol Sugar Corporation in Thailand. As of 12th September 2024, E I D-Parry (India) Ltd had a market capitalisation of Rs. 14,359.52 cr., and its share price closed at Rs. 808.75. Over the last 5 years, the company’s revenue has grown at a yearly rate of 12.26%, higher than the industry average of 9.08%, and its market share increased from 29.31% to 33.31%.
Bajaj Hindusthan Sugar Ltd
Bajaj Hindusthan Sugar Limited (BHSL), established on 23rd November 1931 and headquartered in Mumbai, is a leading sugar and ethanol producer in India and part of the Bajaj Group. Originally named Hindusthan Sugar Mills Limited, BHSL operates 14 sugar plants across Uttar Pradesh. As of 12th September 2024, Bajaj Hindusthan Sugar Ltd had a market capitalisation of Rs. 4,981.14 cr., and its share price closed at Rs. 39.05. The company had 1-yr returns of 56.51 and a low PE ratio of -57.65.
Magadh Sugar & Energy Ltd
Magadh Sugar & Energy Limited (MSEL), part of the K K Birla Group of Sugar Companies, was established on 19th March 2015. Operating in India, MSEL focuses on the production and sale of sugar and its by-products, such as molasses, bagasse, press mud, denatured spirits (including ethanol), and power. As of 12th September 2024, Magadh Sugar & Energy Ltd had a market capitalisation of Rs. 1,198.92 cr., and its share price closed at Rs. 850.80. Over the last 5 years, the company’s debt-to-equity ratio has been 103.2%, lower than the industry average of 104.56%.
Balrampur Chini Mills Ltd
Balrampur Chini Mills Limited (BCML), established on 14th July 1975, began its cane crushing operations at its Balrampur plant with a capacity of 800 tonnes per day. In 1990, the company acquired a controlling stake in Babhnan Sugar Mill Limited, followed by Tulsipur Sugar Company Limited in 1998. As of 12th September 2024, Magadh Sugar & Energy Ltd had a market capitalisation of Rs. 11,555.19 cr., and its share price closed at Rs. 572.75. Over the last 5 years, the company’s debt to equity ratio has been 55.29%, lower than the industry average of 104.56%.
How to Invest in Ethanol Stocks in India?
Investors like you who are interested in sustainable and alternative energy sources are choosing to invest in ethanol company shares, making it a popular choice. Thus, there are several ways to invest in the top ethanol stocks in India, including:
- Online Brokerage: Many online brokerage platforms offer access to a range of ethanol stocks in India, including producers and manufacturers. Before making investment decisions, you can research and compare different top ethanol stocks in India.
- Direct Investment: You can also consider investing directly in ethanol listed companies in India through private equity or venture capital firms. This option is typically reserved for high-net-worth individuals and institutional investors.
- ETFs: Another way to invest in the top ethanol stocks India is through exchange-traded funds (ETFs) that specialise in alternative energy or renewable energy stocks. These funds typically hold a diversified portfolio of ethanol stocks, offering you exposure to portfolio investing and management.
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Ethanol Sector in India
The use of ethanol as a fuel dates back to the early 20th century when it was first used in the United States as a fuel additive to increase octane ratings and reduce air pollution. In the 1970s, India started producing ethanol from sugarcane primarily for industrial purposes. However, the Indian government recognised the potential of ethanol as a renewable fuel in the early 2000s, and since then, the production and use of ethanol have been steadily increasing.
The International Energy Agency states India is predicted to become the world’s third-largest ethanol economy by 2026, surpassing the United States and Brazil. Currently, the ethanol stocks market in India is on the rise, with several ethanol manufacturing companies in India involved in the production and sale of ethanol. The Indian government has set a target of achieving 20% ethanol blending with petrol by 2025, which is expected to boost the demand for an ethanol-making company in the coming years. This has led to a surge in the share ethanol prices of ethanol-producing companies in India, with investors showing keen interest in this sector.
What are Ethanol Stocks?
Ethanol stocks are shares in companies that produce, manufacture or distribute ethanol fuel. Ethanol is mainly derived from corn, sugarcane, and other plant materials and is commonly blended with petrol to create a cleaner-burning fuel. These companies can include agricultural firms growing raw materials, manufacturers operating ethanol plants, and energy firms distributing the final product.
Investing in ethanol stocks means buying shares in companies that could benefit from increasing ethanol fuel demand. Government policies, global energy needs, and environmental concerns often influence this demand. Additionally, the price of ethanol and its related products impacts the value of these stocks.
Why Invest in Ethanol Stocks?
Investing in ethanol stocks offers several compelling benefits. Firstly, it provides an opportunity to diversify your investment portfolio, mitigating the impact of market volatility and risk by adding a different asset class to your holdings. Additionally, ethanol, being a commodity, can serve as a hedge against inflation. As the prices of commodities like ethanol tend to increase with inflation, investing in the top ethanol stocks in India can help protect your capital’s purchasing power during times of rising prices.
Performance Parameters for Ethanol Shares in India
Here are some of the main factors that may affect the performance of ethanol sector stocks in India:
Government Policies
Governments can provide subsidies and tax incentives to ethanol-producing companies, which can increase ethanol share prices. In India, the government has introduced policies like the National Biofuel Policy and the Ethanol Blending Program. These aim to promote the use of biofuels and reduce dependence on crude oil.
Crude Oil Prices
Ethanol is often used as a substitute for gasoline. So when crude oil prices rise, ethanol becomes more popular, which can increase the ethanol making company share prices in India. The inverse is also true. When crude oil prices fall, the decrease in demand leads to a decline in the share prices of ethanol related stocks in India.
Weather Conditions
Ethanol is produced from crops like corn, sugarcane, and wheat. These crops are highly susceptible to weather conditions. Droughts, floods, and other extreme weather events can reduce crop yields, leading to a decrease in ethanol production and lower stock prices.
Ethanol Production Capacity
Ethanol production capacity is a critical factor affecting ethanolshare prices. Thus, an ethanol-producing company has a higher production capacity and can meet the demand for ethanol, leading to an increase in ethanol share prices.
Exchange Rates
Many ethanol blending companies in India export their products to other countries, and fluctuations in exchange rates can affect their revenue. Thus, a decrease in the local currency makes exports more competitive and boost revenue. Leading to an increase in ethanol share prices.
Advantages of Investing in Ethanol Stocks
Investing in ethanol stocks in India can offer you several benefits. Ethanol, a renewable fuel produced from plant matter, has gained popularity as an alternative to fossil fuels. Some of the advantages of investing in the top ethanol stocks in India include:
- Environmentally Friendly: Ethanol is a clean-burning fuel that emits fewer greenhouse gases and pollutants than traditional gasoline. As a result, ethanol shares are popular among investors who are environmentally conscious. Also, who wants to support ethanol making companies in India that promote sustainable practices.
- High Demand: Experts expect the demand for ethanol stocks to increase significantly in the coming years due to the rising need for alternative fuels. Ethanol producers in India and other countries are in an ideal position to benefit from this trend. Thus, this makes investing in ethanol stock a potentially lucrative opportunity.
- Government Support: To promote the use of ethanol as a fuel source many governments around the world offer incentives and subsidies. Thus, government support can help reduce the risks associated with investing in ethanol stocks and make them a more attractive option for you.
Challenges Associated with Ethanol Stocks Investing
Investing in ethanol stocks can offer lucrative opportunities for you, but there are several challenges associated with it. Some of the significant challenges that you might face while investing in ethanol stocks in India include:
- Fluctuating Prices: The commodity price of corn highly influences ethanol stocks since it is the primary source of ethanol production. The prices of corn and ethanol are volatile and can fluctuate significantly, thus, making it challenging for you to predict future returns of even the largest producer of ethanol in India.
- Competition from Alternatives: Other alternative sources of fuel, such as electric vehicles and hydrogen fuel cells, intensely compete with ethanol producers and manufacturers in India. This competition can limit the demand for ethanol shares and simultaneously impact the growth potential of even the largest ethanol producing company in India.
- Political and Regulatory Risks: Ethanol stocks are also vulnerable to political and regulatory risks. Changes in government policies and regulations can have a significant impact on even the biggest ethanol producers in India. Ethanol investors need to keep track of changing regulations, tax incentives, and subsidies that may impact the industry and thereby even the biggest ethanol producer in India.
To Wrap It Up…
To conclude, the ethanol companies have played a crucial role in the Indian economy as well as lifestyle. Thus, these companies have expanded their production capacities and increased their market presence. India is home to several leading ethanol companies, making a significant mark in the global ethanol industry in India. Rising global demand has driven the Indian ethanol market to new heights, with an anticipated CAGR of 9.16%. By 2029, the market is projected to reach $4.15 billion. Investors should conduct thorough research into this promising industry before making any investment decisions.
Frequently Asked Questions About Ethanol Stocks in India
Compared to crude oil and other fuels, Ethanol stands as a more environmentally friendly energy source, leading to higher demand, particularly in nations like China with a growing preference for biofuels.
The future of ethanol sector in India is bright. Government policies, demand for eco-friendly fuel, and increasing use of excess grains and sugarcane are driving the growth of ethanol sector in India.
Here is an ethanol stocks list in India consisting of the top 5 ethanol stocks in India based on their 1-yr returns:
1. Piccadily Agro Industries Ltd
2. Sir Shadi Lal Enterprises Ltd
3. SBEC Sugar Ltd
4. Khaitan (India) Ltd
5. Kesar Enterprises Ltd
Note: The data on this list of top ethanol producing companies in India was taken on 12th September 2024.
If you have the financial resources to support yourself, Ethanol stocks can be a great investment. However, one must evaluate their investment goals and risk appetite before investing.
Ethanol, as a more environmentally friendly energy source compared to crude oil and other fuels, experiences increased demand. However, investors must evaluate both growth potential and challenges before investing in an ethanol making company.
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