Top Ethanol Stocks in India 2024: Ethanol Companies to Add to Your Watchlist

Ethanol is no longer just a by-product of the sugar industry. It's a driving force behind the green energy revolution.

Produced from plant sources like sugarcane, corn, and wheat, ethanol is quickly becoming one of the most popular alternative fuels on the global stage.

With the world moving towards cleaner energy solutions and governments backing sustainable initiatives, the ethanol industry is experiencing a remarkable surge.

This wave of change has led to an impressive rally in ethanol-related stocks, with companies such as EID Parry witnessing their shares skyrocket by over 75% in just the past year.

India, has become a hotspot for ethanol growth, with the market reaching a staggering US$ 6,512.3 million (m) in 2023.

This rapid expansion is largely fuelled by the Indian government's aggressive push towards green energy.

Key initiatives, like the introduction of E20 compliance for new vehicles in 2023 and the promotion of Flex Fuel Vehicles, have significantly boosted the ethanol blending percentage from a mere 1.5% in 2013-14 to an impressive 10.7% in 2022.

As the ethanol market heats up, investors are taking note, eager to capitalise on this burgeoning sector. In this article, we'll explore the top ethanol stocks in India.

#1 EID Parry

First on the list is EID Parry.

EID Parry, a leading entity in the Indian ethanol industry and a subsidiary of the Murugappa Group, has established itself as a key player in sugar production and processing.

EID Parry made significant strides by becoming the first sugar manufacturer in India to produce ethanol from B-heavy molasses and sugar syrup at its Nellikuppam plant, a process validated by the National Sugar Institute in Kanpur.

The company actively produces ethanol, a renewable biofuel, from sugarcane molasses through its multiple distilleries across India.

EID Parry sources sugarcane molasses sustainably from its own sugar mills and other suppliers, contributing to the creation of cleaner fuels by blending ethanol with petrol.

The company has successfully expanded its ethanol manufacturing capacity to 417 KLPD, with further expansions of 165 KLPD at its Haliyal and Nellikuppam plants.

This will enhance the total capacity to 582 KLPD, positioning EID Parry among the largest ethanol manufacturers in South India.

In recent years, the company has seen co-generation and ethanol emerge as twin revenue-generating streams, with ethanol poised to be a major growth driver for its sugar business.

Looking ahead, EID Parry anticipates a significant increase in ethanol revenues, both in absolute terms and as a proportion of overall revenues.

The company expects this strategic restructuring of its revenue mix will lead to higher revenues, reduced working capital outlay, and enhanced overall profitability.

Additionally, the company operates in regions with minimal competition, possesses cutting-edge equipment to boost productivity, and has access to quality raw materials 5-6 months in advance, further strengthening its position in the ethanol market.

For more details, see the EID Parry company fact sheet and quarterly results.

#2 Bajaj Hindustan Sugar

Next on the list is Bajaj Hindustan Sugar.

Bajaj Hindustan Sugar Limited (BHSL), a subsidiary of the Bajaj Group, has been actively involved in the ethanol industry in India.

As the largest integrated sugar and ethanol manufacturing company in India, Bajaj Hindustan Sugar operates 14 sugar factories with a crushing capacity of 136,000 TCD.

Additionally, it runs six distilleries with a combined capacity of 800 KLD and cogeneration facilities producing 449 MW of power, all located in Uttar Pradesh.

The company is one of the leading domestic ethanol producers, generating approximately 38 million litres of ethanol annually.

Bajaj Hindustan Sugar supplies ethanol to major oil marketing companies and has been actively expanding its production capacity to meet the increasing demand driven by the government's Ethanol Blending Programme.

In FY24, the company made significant strides in ethanol production by prioritizing the use of B-heavy molasses, resulting in an estimated sacrifice of 16,788 MT of sugar production in favour of ethanol.

Additionally, the company crushed 31,320 MT of sugarcane for cane syrup dedicated to ethanol production, further solidifying its commitment to contributing to the renewable energy sector.

Going forward, the company plans to increase its ethanol production in India.

For more details, see the Bajaj Hindustan Sugar company fact sheet and quarterly results.

#4 Balrampur Chini Mills

Next on the list is Balrampur Chini Mills.

Balrampur Chini Mills Limited (BCML) is a Kolkata-based sugar producer that also produces ethanol.

BCML has four distilleries in Uttar Pradesh with a total production capacity of 560 kilo liters per day (KLPD).

The company's ethanol is primarily used to blend with petrol and is supplied to oil marketing companies. BCML accounts for about 5% of India's total ethanol production and over 30% of Uttar Pradesh's production.

Currently, the company has operations in 3 segments - sugar, distillery, and others. It has 10 sugar plants in Uttar Pradesh with a crushing capacity of 80,000 tonnes of cane per day, a distillery capacity of 1,050 KLPD, and a co-generation capacity of 175.7 MW.

Recently, the company has announced the setting up of a 320 KLPD distillery at its Maizapur unit and 170 distillery KLPD at Balramapur unit. These will run on sugarcane juice as raw material during the season and on grains during the off-season.

With this addition, the total distillation capacity of the company increased to 1,050 KLPD.

With expertise in ethanol manufacture, the company is pushing innovation boundaries with India's first industrial bioplastics plant.

This plant uses sugarcane as a raw material for polylactic acid (PLA) production, offering a plant-based alternative to traditional plastics. It is targeted for completion in 2027.

Currently, the company has plans to invest Rs 20 bn in the bioplastics unit. Balrampur Chini will leverage internal accruals of Rs 8 bn and manageable debt of Rs 12 bn to fund this investment.

For more details, check out Balrampur Chini Mills' factsheet and quarterly results.

#4 Dwarikesh Sugar

Next on the list is Dwarikesh Sugar.

It stands among prominent sugar companies based in Uttar Pradesh. Deriving an increasing proportion of its revenues from non-sugar businesses.

The non-sugar component of revenues comprised revenues from bio-energy businesses like ethanol manufacture and power co-generation.

Dwarikesh Sugar Industries Limited (DSIL) has expanded its ethanol production capacity to 337.5 kilo liters per day (KLPD) across two of its sugar units in Uttar Pradesh, marking a 10-fold increase from its initial 30 KLPD capacity in 2007.

The company operates two state-of-the-art distillery units: one in Dwarikesh Nagar with a capacity of 162.5 KLPD, and another in Dwarikesh Dham with a capacity of 175 KLPD, which was commissioned in FY23.

In response to directives mandating that sugar mills and distilleries stop using sugar syrup or sugarcane juice for ethanol production, both distilleries at Bundki (Dwarikesh Nagar) and Faridpur (Dwarikesh Dham) have ceased using sugarcane juice for this purpose.

However, since it is permitted to produce ethanol from B-heavy molasses, the company transitioned in December 2023 to using B-heavy molasses for ethanol production.

Going forward the company plans to increase its foothold in ethanol space.

For more details, see the Dwarikesh Sugar company fact sheet and quarterly results.

#5 Praj Industries

Next on the list is Praj Industries.

Praj Industries is a Pioneer in Ethanol Technology solutions that offers cutting-edge technologies to the distillery industry.

It is a leading biofuel technology company providing a number of processes and systems for ethanol and biodiesel production. It has a presence on five continents.

The company has over 70% of the market share in India for 2G ethanol technology and experience in installing projects in Africa and Southeast Asia and contributes about 10% of global ethanol production (excluding China).

Recently, Brazil-based renewable energy company Be8 entered into a license agreement with Praj.

This is to establish the process, design, and engineering of its first ethanol plant in Passo Fundo, Rio Grande do Sul, Brazil.

The ethanol plant is the first large-scale one in the state to produce biofuel with cereals. The new factory is expected to be operational in 2026.

Praj Industries, in June 2024 marked a significant milestone by inaugurating its first grain-based ethanol project in Brazil, the world's ethanol capital.

The company is involved in significant projects, such as building state-of-the-art modules for one of Europe's largest Blue Hydrogen projects and designing three alcohol-to-jet sustainable aviation fuel plants in the US.

Praj has also supplied a large alcohol-to-jet modular demonstration unit in the USA for converting Isobutanol to sustainable aviation fuel (SAF).

Additionally, a French company has contracted Praj to set up a greenfield plant in Ivory Coast, Africa.

Praj has seen significant growth in its domestic energy business, driven by starch-based ethanol plants, which comprise 90% of the domestic order book.

The company is engaging with several customers to transition from single-feedstock to multi-feedstock systems.

The R&D unit in Pune is pioneering sustainable aviation fuel (SAF) technology, inaugurating a pilot project in January 2024. It has also formed a JV with Indian Oil for biofuel production, a project established ahead of schedule compared to Brazil.

Its subsidiary Praj Gex X is taking a major step forward by setting up a Mangalore plant designed to cater to the growing Energy Transition and Climate Action (ETCA) segment.

This significant investment of Rs 1 bn is under construction and slated for completion in 2024. When fully operational, it can boost the company's revenue by Rs 20-25 bn.

For more details, see the Praj Industries company fact sheet and quarterly results.

#6 Globus Spirit

Next on the list is Globus Spirit.

Globus Spirits is a significant player in the Indian ethanol industry, leveraging its strong presence in the alcoholic beverages sector to expand into the production of ethanol.

The company operates one of the largest grain-based distilleries in India, which positions it uniquely within the industry, as most ethanol in India is produced from molasses, a byproduct of sugar production.

Globus Spirits produces ethanol as part of its broader portfolio, which includes both potable alcohol and industrial alcohol.

Globus Spirits' focus on grain-based ethanol production allows it to diversify its feedstock and not rely solely on sugarcane, making it resilient to fluctuations in sugarcane supply and prices.

The company has been steadily increasing its ethanol production capacity to meet the growing demand. It supplies ethanol to major oil marketing companies in India, contributing to the national goal of increasing ethanol blending in fuels.

On 28 March 2024, Globus Spirits commenced the commercial production of additional capacity at two of its existing units in Jharkhand and West Bengal.

This expansion increased the capacity of the Jharkhand unit from 140 KLPD to 200 KLPD and the West Bengal unit from 240 KLPD to 300 KLPD.

The additional capacity will be utilized for various products, including Extra Neutral Alcohol (ENA) and ethanol.

Looking ahead, Globus Spirits plans to further increase its manufacturing capacity.

For more details, see the Globus Spirits company fact sheet and quarterly results.

#7 Dhampur Sugar Mills

Next on the list is Dhampur Sugar Mills.

Dhampur Sugar Mills, a prominent player in the Indian sugar industry, has also made significant strides in the ethanol sector.

The company operates multiple sugar mills and distilleries, focusing on converting sugarcane byproducts, such as molasses, into ethanol.

In addition to reliance on cane for ethanol production, the company set up a 100 KLPD ethanol plant using maize/damaged food grain as feedstock.

At the end of FY24, it possessed a cane-crushing capacity of 24,000 tonnes per day and a distillery capacity of 350 KLPD. It added 100 KLPD distillery capacity at the start of FY24.

The company's co-generation capacity is 126.5 MW of which 5.5 MW was commissioned in FY24. It also produces 140 MT of Ethyl Acetate per day and 14,000 cases of potable spirits per day.

Dhampur Sugar Mills significantly ramped up its ethanol production in FY24 by nearly 28% from 931.08 lakh BL to 1,189.78 lakh BL.

The ethanol segment is the highest-earning business segment of the company.

The share of ethanol in the company's standalone revenue increased from 16.8% in FY23 to 24.7% in FY24. The share of ethanol in the company's standalone operating profit increased from 44.8% in FY23 to 48.2% in FY24.

For more details, see the Dhampur Sugar Mills company fact sheet and quarterly results.

#8 Shree Renuka Sugars

Next on the list is Shree Renuka Sugars.

As a subsidiary of Singapore-based Wilmar Sugar Holdings, Shree Renuka Sugars has established itself as one of the largest producers of both sugar and ethanol in the country.

The company is recognised for its pioneering use of sugarcane juice in ethanol production. A method that not only enhances its contribution to the ethanol-blending program but also helps manage its sugar inventories effectively.

As of March 2023, Shree Renuka Sugars operates with a significant ethanol production capacity of 1,250 kilo liters per day (KLPD), marking a substantial increase from its earlier capacity of 720 KLPD.

This expanded capacity supports various applications, including ethanol for blending with petrol, which aligns with the government's push towards increasing biofuel usage.

The company produces three main grades of ethanol: Absolute Alcohol (AA), Extra Neutral Alcohol (ENA), and Rectified Spirit (RS).

Shree Renuka Sugars supplies these different ethanol grades to a diverse range of industries. Its products are distributed across the oil marketing sector, where the company is a leading supplier, the potable alcohol industry, and the chemical industry.

Given its extensive role in supplying ethanol to major oil marketing companies in India, Shree Renuka Sugars is well-positioned to see an increase in supply numbers in the coming quarters, reflecting its growing influence in the renewable energy sector.

Going forward, the company plans to upgrade existing distilleries with advanced technology to improve efficiency.

For more details, see the Shree Renuka Sugars company fact sheet and quarterly results.

#9 Dalmia Bharat Sugar

Next on the list is Dalmia Bharat Sugar.

Dalmia Bharat Sugar, a prominent player in the Indian sugar industry, has been actively expanding its presence in the ethanol space.

The company efficiently utilises byproducts like molasses and bagasse, converting molasses into ethanol, a renewable fuel, while using bagasse to generate eco-friendly power.

During the last financial year, Dalmia Bharat Sugar increased its ethanol manufacturing capacity using grain as a feedstock at its Jawaharpur unit, expanding from 110 KLPD to 250 KLPD.

This strategic move reduces the company's reliance on the captive availability of cane syrup or molasses, allowing for a broader feedstock base that includes grain.

This flexibility strengthens the company's resilience and enhances its ability to meet production demands.

The ethanol produced by Dalmia Bharat Sugar is sold through a tender system to major oil marketing companies, including Indian Oil, Bharat Petroleum, and Hindustan Petroleum.

The company has also improved its ethanol output by adopting low-fuel technology, utilizing multi-vapour recompression-based distillation for greater efficiency.

With the Indian government committed to the long-term success of the Ethanol Blending Programme, which targets 20% blending of automotive fuel with ethanol by 2026, Dalmia Bharat Sugar is well-positioned to contribute significantly to this national goal.

Apart from that, it is the biggest sugar producer in the state of Uttar Pradesh (UP).

The company has five integrated plants, three in UP and two in Maharashtra with a cane crushing capacity of 35,500 TCD and a sugar production capacity of 700,000 MT per annum. It's the only company in India to have manufacturing facilities in two non-contiguous states in India.

It's also a major producer of green power in the sugar industry. Its sugar plants can produce 118 MW of bagasse-based power of which around 60 MW is exported to the grid.

Looking ahead, the company is focused on reducing its environmental footprint and promoting sustainability across its value chain.

It is exploring innovative farming practices, enhancing energy efficiency, investigating CO2 capture for bio-ethanol production, and optimising precision irrigation and treated wastewater reuse to increase its carbon footprint.

For more details, see the Dalmia Bharat Sugar company fact sheet and quarterly results.

#10 Triveni Engineering & Industries

Next on the list is Triveni Engineering & Industries.

A key member of the Triveni Group, the company operates with state-of-the-art distilleries across Uttar Pradesh, including facilities in Muzaffarnagar (MZN) with two sites, Sabitgarh (SBT), Milak Narayanpur (MNP), and Rani Nangal (RNG). These facilities collectively boast a significant distillation capacity of 860 KLPD.

Triveni Engineering & Industries' advanced distilleries are equipped to produce a range of products, including ethanol, Extra Neutral Alcohol (ENA), Rectified Spirit (RS), and Denatured Spirit (SDS). The company utilises a mix of sugarcane-based feedstocks and grain for its operations.

Additionally, Dried Distillers Grain with Solubles (DDGS), a co-product of the grain operations, is sold to premium institutions and has been well received in the market.

The company is fully committed to supporting the government's Ethanol Blending Programme (EBP), having achieved production of 184.4 million litres and sales of 182.7 million litres in FY24, both higher than the previous year.

Triveni Engineering & Industries supplies ethanol to major oil marketing companies and private players for blending with petrol.

As part of its long-term strategy, the company aims to further expand its ethanol business and actively contribute to India's EBP program and self-reliance goals.

Recently, Triveni Engineering & Industries commissioned a 200 KLPD multi-feed distillery at Rani Nangal, increasing its total distillation capacity to 860 KLPD, and reinforcing its role in the renewable energy sector.

For more details, see the Triveni Engineering company fact sheet and quarterly results.

Conclusion

India is poised to significantly boost its ethanol production to 9.90 bn litres by 2025, utilising grain and sugarcane as key feedstock.

This ambitious goal is central to the government's broader strategy to enhance energy security, reduce carbon emissions, and decrease dependence on fossil fuels.

With the target of achieving 20% ethanol blending with petrol by 2025, up from the current 10%, the ethanol sector is expected to witness substantial growth, presenting a lucrative opportunity for investors.

Ethanol has emerged as a significant contributor to the renewable energy sector, driven by government initiatives to promote higher ethanol blending, which reduces fossil fuel use and lowers pollution.

The Ministry of Petroleum and Natural Gas has been instrumental in supporting this growth by encouraging investments in ethanol production infrastructure and offering financial incentives to producers.

This has spurred public and private sector investments, particularly in regions with abundant grain and sugarcane production.

However, investors should be mindful of the cyclical nature of the sugar industry, which can impact ethanol production.

Additionally, regulatory changes, climate conditions, and fluctuating raw material costs can affect the profitability of ethanol-producing companies.

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