The Indian government is on the verge of blending 20% ethanol into automotive gasoline in order to minimise reliance on foreign exchange. As a result, the Indian ethanol sector has made great success in recent months, attaining a 10% ethanol blending rate five months ahead of schedule. However, in order to meet the government’s blending target, greater ethanol production capacity is required.
Here are three companies investing to boost ethanol production
EID Parry (India) Ltd
EID Parry is the largest sugar producer in South India, which is engaged in Sugar, Nutraceuticals, and ethanol production. It also has a significant presence in Biopesticides through its subsidiary, Coromandel International Limited.
The company belongs to the small-cap category with a market capitalization of Rs 8,232 crore. Shares closed at 463.75 apiece, down 1.30 percent on June 28 from the previous close price.
EID Parry intends to expand its ethanol and extra-neutral alcohol production capacities across its plants in order to benefit from the benefits of the green energy space. The company intends to invest Rs 286 crore to increase its ethanol production capacity to around 582 KLPD, and the distillery plant at Haliyal will be expanded to 120 KLPD from 50 KLPD capacity.
Revenue climbed by 50% year on year, rising from Rs 23,527 crore in FY 21-22 to Rs 35,243 crore in FY 22-23. Net profit increased by 18%, from Rs 1,572 crore to Rs 1,865 crore.
Triveni Engineering and Industries Ltd
Triveni Engineering and Industries Ltd is a sugar producer with a market leader in engineering business. Shagun is the brand name under which the company sells sugar. The business also operates in the Sugar, Water, Gears, Distillery, and Power generation.
The company belongs to the small-cap category with a market capitalization of Rs 6,120 crore. Shares closed at 279.60 apiece, down 2.49 percent on June 28 from the previous close price.
The company announced in February 2023 that it will shift 12% of its sugar production to ethanol. Triveni Engineering & Industries board of directors has approved a Rs 460 crore capital expenditure for two new ethanol facilities, increasing ethanol output from 660 KLPD to 1,110 KLPD.
The firm plans to grow its ethanol output from 18 million to 31 million litres by FY25, as well as to transform 4.5 million tonnes of sugar into ethanol.
The company’s revenue increased by 31 percent yearly, from Rs 4,290 crore in FY 21-22 to Rs 5,616 crore in FY 22-23. Net profit has grown by 387 percent, from Rs 364 crore to Rs 1,775 crore.
Hindustan Petroleum Corporation Limited (HPCL)
Hindustan Petroleum Corporation Ltd operates India’s largest lube refinery, company is engaged in the business of refining crude oil and marketing of petroleum products, production of hydrocarbons.
The company belongs to the Mid-cap category with a market capitalization of Rs 38,173 crore. Shares closed at 269.10 apiece, up 0.79 percent on June 28 from the previous close price.
In Himachal Pradesh, the company intended to construct a cutting-edge ethanol plant, with an INR 500 crore investment, this project will cover 30 acres. The government intends to invest 50% and provide assistance to the business throughout the production phase.
From FY 21–22 to FY 22–23, the company’s sales climbed by 26 percent annually, from Rs 3,49,913 crore to Rs 4,40,709 crore. In the same period, Net profit declined by 269 percent to a loss of Rs 9,841 crore.
Written by Omkar C
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