In the midst of high fuel prices and rising global warming concern, Ethanol blended fuel is highly popularized in many countries including India. As a result Ethanol production throughout the World has picked up massive pace in recent years.
The uncertainties and undesirable sanctions on the war-prone countries or regions, the best example would be the Russia-Ukraine War, have led to increasing in production pressure among oil producing countries due to a sudden rise in demand. This has led to unpreventable demand inflation.
India being the third largest consumer of oil in the world are among them whose economy has been negatively hit by the fuel prices hike. Which ultimately forced India to look for alternate sources of energy and one among them is Ethanol-blended petrol. This could lighten the cost of oil burden in the country’s economy.
What is Ethanol Blending?
Ethanol (C2H5OH) is a biofuel that is naturally produced by fermenting sugar. While it is mostly made by extracting sugar from sugarcane, other organic matter such as food grains can also be used to make it.
India has launched the Ethanol Blended Petrol (EBP) programme, which mixes this biofuel with gasoline to reduce the use of fossil fuels.
Let’s have a look at some of the top companies contributing to Ethanol production.
Top Ethanol Stocks in India
1. Shree Renuka Sugars
Shree Renuka Sugars Ltd is a sugar value-chain agribusiness and bioenergy corporation. It generates sugar, ethanol, and power, among other things. To manufacture sugar, the company has state-of-the-art fully integrated sugar mills. Molasses, bagasse, and press mud are byproducts that are used to make value-added products.
| Market Cap.(cr) | 9,131 |
| Dividend yield(%) | 0 |
| ROE(%) | 6.23 |
| CMP(Rs) | 42.9 |
2. Balrampur Chini Mills
Balrampur Chini Mills Limited (BCML) is India’s largest integrated sugar company. The Company’s allied businesses include distillery operations and power cogeneration.
BCML is one of the country’s most efficient integrated sugar producers. In recent years, the Company has increased its capacity through well-planned capacity expansion projects and acquisitions of existing companies.
| Market Cap.(cr) | 7,445 |
| Dividend yield(%) | 0.68 |
| ROE(%) | 17.3 |
| CMP(Rs) | 369 |
2. Dwarikesh Sugar Industries
Dwarikesh Sugar Industries Ltd is primarily involved in the production of sugar and related products. It has a significant presence in industries such as sugar manufacturing, power generation, and ethanol/industrial alcohol production.
| Market Cap.(cr) | 1,577 |
| Dividend yield(%) | 2.39 |
| ROE(%) | 24.8 |
| CMP(Rs) | 83.8 |
Currently, the company has three manufacturing plants in Uttar Pradesh (2 in Bijnor & 1 in Bareilly). It had begun a 175 KLPD distillery project at Dwarikesh Dham, with commercial production beginning in July 2022.
3. Bajaj Hindustan Sugar
Bajaj Hindusthan Sugar Limited (BHSL) was founded in 1931 as “The Hindustan Sugar Mills Limited”. With fourteen sugar plants with an aggregate sugarcane crushing capacity of 1,36,000 TCD, six distilleries with an aggregate capacity to produce Industrial Alcohol of 800 kilolitres per day, and fourteen co-generation plants with a total power generation capacity of 449 MW, the company is one of India’s leading sugar and ethanol manufacturing companies.
| Market Cap.(cr) | 1,609 |
| Dividend yield(%) | 0 |
| ROE(%) | -0.14 |
| CMP(Rs) | 12.6 |
4. Triveni Engineering and Industries
Triveni Engineering and Industries Ltd is primarily an integrated sugar manufacturing company that also manufactures high-speed gears and implements projects in the fields of water and waste-water treatment, as well as pollution control.
The company is one of the largest domestic sugar manufacturers, with a combined capacity of 61,000 TCD, 104.5 MW of power co-generation, and 660 KLPD of distillery capacity spread across seven locations in Uttar Pradesh.
| Market Cap.(cr) | 5,883 |
| Dividend yield(%) | 1.22 |
| ROE(%) | 24.8 |
| CMP(Rs) | 266 |
5. Dalmia Bharat Sugar and Industries
Dalmia Bharat Sugar & Industries is primarily involved in the production of sugar, the generation of electricity, the production of industrial alcohol, and the production of refractory products. The company diverted around 25% of total sugar towards ethanol in 2022, the highest in the industry.
| Market Cap.(cr) | 2,565 |
| Dividend yield(%) | 1.26 |
| ROE(%) | 13.3 |
| CMP(Rs) | 317 |
6. Dhampur Sugar Mills
Dhampur Sugar Mills (Dhampur) is one of India’s largest integrated sugarcane processing companies. They have expanded their portfolio beyond sugar to include renewable power, fuel ethanol, alcohol, extra neutral alcohol, alcohol based chemicals, and biofertilizers as a result of their continuous and often pioneering efforts to harness the full potential of sugarcane.
| Market Cap.(cr) | 1,415 |
| Dividend yield(%) | 2.82 |
| ROE(%) | 11.7 |
| CMP(Rs) | 213 |
7. Uttam Sugar Mills
Uttam Sugar Mills Ltd. manufactures sugar, industrial alcohol, and generates electricity. The company has a capacity of 23,750 TCD for aggregate cane crushing, a capacity of 103 MW for co-generation, and a capacity of 200 KLPD for ethanol production. It operates four sugar plants, one in Uttarakhand and three in Uttar Pradesh.
| Market Cap.(cr) | 882 |
| Dividend yield(%) | 0.87 |
| ROE(%) | 33.1 |
| CMP(Rs) | 231 |
Benefits of Ethanol
There are several benefits involved with production of Ethanol. Let’s discuss the same below.
- Cost Effective measure: As compared to the other biofuels, Ethanol is cheap and easily available. This is the reason why the government is stressing much on Ethanol Blended Petrol as it reduces the financial stress on the economy of the country.
- Reduces Pollution: The combustion of Ethanol only releases carbon dioxide and water which do not support global warming. Therefore it can be said that Ethanol blended fuel would be partially eco-friendly.
- Easily available: Elements such as plants or corps, sugarcane which are required to produce Ethanol are easily available. This ultimately makes ethanol cheap and efficient fuel to produce.
- Enhancing Farmer’s Income: As discussed above the production of Ethanol is largely dependent on feedstocks, sugarcane etc. Therefore, the farmers who are engaged in production of such crops have witnessed a surge in their incomes.
- Government Grants and Subsidies: As the government is heading towards Ethanol blended fuel. It has launched various subsidies required to boost Ethanol Production in the country. For example, the Jharkhand government is providing a 25% subsidy on capital investment in order to attract investors to invest in Ethanol Production Projects. Likewise, many state governments realizing the future potential of Ethanol have launched various subsidies or schemes to support its production in the state.
Conclusion
After reading the preceding article, we can conclude that India is on the path towards renewable and sustainable energy, and ethanol has proven to be a key ingredient in kicking off the process.
The use of blended ethanol will not only strengthen the country’s finances but will also help Indians become more financially stable.
