3 Stocks to Watch as India Proposes New Vehicle Rules for Higher Ethanol-Blended Fuels

#2 EID Parry

EID Parry is a leader in the sugar industry with significant presence in ethanol blending.

As of early 2026, the company has significantly expanded its distillery capacity to capitalise on the government's mandate to reach 20% ethanol blending in petrol.

The company has six sugar factories across South India with a capacity to crush 40,800 TCD, generate 140 MW of power and five distilleries with a capacity of 582 KLPD.

EID Parry Financial Snapshot

On the financial front, EID reported sales of Rs 103,156 m vs Rs 87,204 m YoY. Net profits of EID Parry were placed at Rs 4,370 m vs Rs 4,240 m YoY.

As far as the sugar production is concerned, the company produced about 1.39 LMT during the quarter against 1.07 LMT of the corresponding quarter of the previous year.

The average selling price was around Rs 40 against Rs 37.69 in the corresponding quarter in the previous year.

EID Parry's prospects appear steady, driven by growth in ethanol, integrated sugar operations, and its valuable stake in Coromandel International. The company also benefits from expansion into branded foods and nutrition products. Ethanol blending policies in India could support earnings over time.

#3 Dalmia Bharat Sugar and Industries

Next on our list is the stock of Dalmia Bharat Sugar.

Dalmia Bharat Sugar & Industries is an integrated sugar company and part of the Dalmia Bharat Group. It's engaged in sugar manufacturing, ethanol/distillery operations, and power generation through cogeneration plants. The company has sugar mills mainly in Uttar Pradesh and Maharashtra.

Dalmia Bharat Sugar Financial Snapshot

On the financial front, the company's total revenue stood at Rs 6,980 m, showing 17% YoY growth. Net profits of Dalmia Bharat Sugar were Rs 1,700 m, up 17%.

The net profits rose despite lower cane crush and higher cost of production for sugar. This was due to cane price increases in Maharashtra and Uttar Pradesh.

Moving ahead, the board has approved the installation of 13 TPD Compressed Bio Gas project at the Kolhapur plant with expected commissioning by November 2026.

The company is also undertaking capital expenditure for the installation of steam-saving equipment at the Jawaharpur plant. This initiative is expected to reduce steam consumption by 10%, resulting in significant bagasse savings.

Conclusion

Ethanol-based stocks can offer opportunities due to India's push for fuel blending, reduced crude imports, and strong demand from oil marketing companies.

Sugar mills with distillery units may benefit through diversified revenue and improved margins.

However, these stocks are policy-driven and can face risks from changing government pricing, feedstock shortages, overcapacity, and volatile sugar cycles.

Investors should focus on fundamentally strong companies with low debt, efficient operations, and businesses beyond ethanol.

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