Earlier Ethanol Fuel Stations, Now Excise Duty Relief: 4 Sugar Stocks to Watch Amid India's Ethanol Push

#2 Dwarikesh Sugar Industries

Next on the list is Dwarikesh Sugar Industries.

Over the past three decades, the company has grown into a leading player in India's sugar industry. Dwarikesh has built a diversified product portfolio comprising sugar, ethanol, and co-generated power, with three manufacturing units located in Central Uttar Pradesh.

According to company's Q4 & FY26 investor presentation, strengthening its presence in the ethanol space, Dwarikesh Sugar Industries has an ethanol production capacity of 337.5 KLPD, with capacities of 162.5 KLPD at its Dwarikesh Nagar unit and 175 KLPD at its Dwarikesh Dham unit.

In FY26, the company produced 60.3 m litres of ethanol across both its distilleries, reflecting a 10% year-on-year increase from 55.0 m litres in FY25.

During the same period, sugar production increased 13% year-on-year to 2.37 m quintals, primarily due to ethanol production being entirely based on B-heavy molasses in FY26, resulting in lower sacrifice of sugar output compared with FY25.

With the Ministry of Finance extending excise duty exemptions to higher ethanol-petrol blends such as E22, E25, E27, and E30, Dwarikesh Sugar Industries remains a sugar stock to watch amid the ethanol sector rally. Following the announcement, the company's shares gained over 2.7% in trade.

For more details, see the DWARIKESH SUGAR company fact sheet and quarterly results.

#3 Bajaj Hindusthan Sugar

Next on the list is Bajaj Hindusthan Sugar.

Bajaj Hindusthan Sugar is one of India's leading integrated sugar and ethanol companies and a key entity of the Bajaj Group. The company operates 14 sugar plants across Uttar Pradesh, accounting for nearly 14% of the state's sugarcane crushing capacity, while also generating surplus power through bagasse-based cogeneration.

The company has built a strong presence in the ethanol segment with a flexible multi-feedstock strategy, enabling production from C-heavy molasses, B-heavy molasses, and sugarcane juice.

Having pioneered India's fuel ethanol programme, Bajaj Hindusthan has significantly expanded its ethanol manufacturing capacity from 38 m litres annually to around 218 m litres per year.

With one of the largest ethanol capacities in the sugar industry and a diversified integrated business model, Bajaj Hindusthan Sugar remains a sugar stock to watch amid the government's push towards higher ethanol blending.

Following the news, shares of the company surged over 1.5%.

For more details, see the BAJAJ HIND. SUGAR company fact sheet and quarterly results.

#4 Dalmia Bharat Sugar

Last on the list is Dalmia Bharat Sugar.

Dalmia Bharat Sugar and Industries is one of the leading sugar producers in Uttar Pradesh, operating three integrated plants with a total cane crushing capacity of 35,500 TCD and a sugar production capacity of 7 lakh MT per annum.

The company has also strengthened its presence in the green fuel segment with an ethanol production capacity of 240 KLPD. It manufactures fuel-grade anhydrous ethanol used for blending with petrol, supplying it to oil marketing companies through annual tenders

The company's ethanol production is supported by a diversified feedstock mix, including B-heavy molasses, sugarcane juice, and grain, aligning with India's biofuel and ethanol blending initiatives.

With its integrated sugar operations and strong ethanol manufacturing capabilities, Dalmia Bharat Sugar remains a sugar stock to watch amid the government's push towards higher ethanol blending.

Following the update the shares of company jumped over 1.5% intraday.

For more details, see the DALMIA BHARAT company fact sheet and quarterly results.

Conclusion

The ethanol segment has emerged as a key growth avenue for sugar companies, helping them diversify their revenue streams beyond traditional sugar operations.

Moreover, amid the ongoing geopolitical tensions and disruptions in global oil supply chains, India's focus on reducing dependence on crude oil imports has gained further importance, bringing greater attention to domestic alternative fuels such as ethanol.

With continued government support for higher ethanol blending, companies with significant ethanol capacities, flexible feedstock options, and integrated operations remain sugar stocks to watch.

However, investors should also assess factors such as financial strength, operational efficiency, and valuations before taking any investment decision.

Investors should evaluate the company's fundamentals, corporate governance, and valuations of the stock as key factors when conducting due diligence before making investment decisions.

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