Best Ethanol Stocks in India You Must Invest In 2024

The ethanol stocks in India are witnessing a significant surge. This surge is driven by the Indian government's regulations and incentives for blending ethanol into gasoline. From 1.5% ethanol 2 decades ago to 20% by 2025, the government aims to achieve this target under the Ethanol Blended Petrol (EBP) scheme.

The Indian ethanol market itself is expected to reach $4.15 billion in market value by 2029. This rise in the Indian ethanol industry and consumption offers a favorable investment opportunity for investors and traders.

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Topics Covered

  • What is the Ethanol Stock Market in India?
  • List of the Best Ethanol Stocks in India
  • Why Invest in Ethanol Stocks?
  • Challenges Associated with Ethanol Stocks Investing
  • Conclusion

What is the Ethanol Stock Market in India?

India's renewable energy policy and rising demand for cleaner fuel alternatives are the prime reasons for the rise in India's ethanol industry. Ethanol is produced from sugarcane and maize. Its diverse industrial applications include fuel additives.some of the top companies seeing outstanding development.

As stated by the International Energy Agency, India is expected to overtake the US and Brazil as the world's 3rd largest ethanol economy by 2026. That's why Indian investors and traders are finding the stocks of firms engaged in ethanol production and marketing to be an attractive investment option.

 

Advantages of Investing in Ethanol Stocks

Ethanol stocks have the potential to gain from the global shift towards greener energy sources. The other important advantages of investing in ethanol stocks in India are:

  1. High Demand: Ethanol is in demand as the global carbon reduction movement continues. Biofuel regulations by India are adding more to this consumption.
  2. Backed by Government: The government has established financial support programs to expand India's capacity for ethanol production. This is further fueling Ethanol  consumption.
  3. Eco-friendly: It proves to be hazardous due to its clean burning characteristics and limited emissions of greenhouse gasses. That's why many businesses have already started using it to produce and manufacture goods.
  4. Portfolio Diversification: Investing in Ethanol stocks can yield significant advantages in terms of diversification. By diversifying, ethanol stocks can reduce market volatility and risk.

 

List of the Best Ethanol Stocks in India

All these advantages allow investors and traders to gain from its high demand and surge. Among various advantages, investing in ethanol stocks also protects your portfolio against inflation. If you want to make the most of them, here are the top 10 ethanol stocks in India stocks you must keep an eye on:

Company Name

Market Capital (Cr)

Share Price

Bannari Amman Sugars Ltd

₹3,280

₹2,717.45

E I D-Parry (India) Ltd

₹11,324

₹628

Avadh Sugar & Energy Ltd

₹1,280

₹625.6

Dalmia Bharat Sugar and Industries

₹3,333

₹404.55

Balrampur Chini Mills Ltd

₹7,739

₹381.45

Triveni Engineering and Industries

₹7,677

₹348.05

Dhampur Sugar Mills Ltd

₹1,652

₹249.3

Dwarikesh Sugar Industries Ltd

₹1,540

₹80.9

Shree Renuka Sugars Ltd

₹10,631

₹49

Bajaj Hindusthan Sugar Ltd

₹4,962

₹37.45

 

FIGURES CHECKED BY ALMONDZ GLOBAL SECURITIES RESEARCH TEAM.

 

Why Invest in Ethanol Stocks?

By 2021–26, the demand for ethanol blending is expected to increase from 425 crore liters to 1,016 crore liters, a CAGR of 25.1%. With the rising consumption comes the opportunity for investors and traders to gain significantly from it. This alone is a strong argument why you must invest in ethanol stocks in India. Besides all these, it offers a chance to diversify your investments by including a new asset class in your holdings.

Top Ethanol Stocks in India: An Overview

The listed below are the top ethanol stocks in India. Here is why these stocks rank among them on the NSE:

  • Dwarikesh Sugar Industries: Dwarikesh Sugar is handling 1.54 lakh farmers ranging from different three locations over 1.17 lakh hectares of sugarcane. The sugarcane that is required is around 382 lakh quintals.
  • Balrampur Chini Mills Limited: The company runs a sugar power plant simultaneously as an in-house source of power generation and any bagasse produced is sold to the market. Being able to process sugarcane with 80,000 tonnes every day, the production capacity of the distillery is 1,050 kilolitres and generates energy of 175.7 megawatts
  • Triveni Engg: The firm is going to cease 4.5 million tons of sugar for the ethanol production program which counts to about 12% of the whole company’s sugar yield. In addition, the program works on expanding the ethanol capacity of 10 E85 pumps from 660 kiloliters per day to 1,100 kiloliters per day.

 

Performance Parameters of Ethanol Shares

The price of ethanol stocks in India is affected by numerous factors. You must consider all these factors before adding them to your portfolio:

  • Crude Oil Prices: If crude oil prices plummet, ethanol stock prices will drop significantly.
  • Government Policies: Companies that produce ethanol may receive tax breaks and subsidies from the government, which might raise the price of ethanol shares.
  • Weather: Extreme weather events like floods and droughts can impact agricultural yields, which can depress ethanol output and stock values. 
  • Ethanol Production Capacity: The price of ethanol shares rises when an ethanol-producing business meets the demand for ethanol and has a bigger production capacity.

 

Challenges Associated with Ethanol Stocks Investing

Investing in ethanol stocks carries a number of risks and challenges in addition to possible benefits. These include:

  • Oil Prices: Blending biofuels will become less necessary as oil prices decline. 
  • Regulatory Risks: The policies and regulations of the Indian government, such as requirements for biofuel and subsidies, have a significant impact on the ethanol business.
  • Commodity Price: Corn, sugarcane, and sugar prices are strongly related to those of ethanol.
  • Competition: As more and more sugar firms enter the ethanol manufacturing market, there is a shortage of space in this industry. 

 

How to Invest in Ethanol Stocks in India?

Online brokerage, direct investment, and ETFs are the three best ways to invest in ethanol stocks in India. If you want to experience a seamless trading experience, you can also invest in ethanol stocks through Almondz Trade. We offer:

  • Scanner Feature: You can scan the ethanol stocks to know everything about them.
  • Script Overview: It lets you monitor the price and charts on particular ethanol stocks.
  • Guest User Login: You can surf your renewable energy watchlist without opening your demat account.

 

Conclusion

The Indian ethanol market is a good investment, but investors must carry out thorough research. Government policies, rising petroleum consumption, and the nation's move to renewable energy sources support this sector's long-term growth. However, commodity price volatility and market dynamics must be considered. Indian investors have the opportunity to earn substantial returns from the burgeoning ethanol stock market by remaining well-informed and diversifying their portfolios.

 

Disclaimer: This blog is posted solely for educational purposes. The securities mentioned are examples and not recommendations. It is based on various secondary sources from the internet and is subject to change. Kindly consult an expert before making any related decisions.

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