The Indian government is on a path of blending 20% ethanol into automobile gasoline in order to reduce dependency on foreign funds. As a result, the Indian ethanol sector has had a significant rise in recent months, achieving a 10% ethanol blending rate five months ahead of plan. However, in order to fulfill the government’s blending aim, more ethanol production capacity is necessary.
As per reports, India’s ethanol market demand was 3250 million liters in FY2021 and is expected to reach 5412.06 million liters by FY2030, to rise at a CAGR of 8.25 percent by FY2030.
Here are three Ethanol stocks with net profit CAGR of up to 72%
EID Parry (India) Ltd
The company belongs to the small-cap category with a market capitalization of Rs 9,309 crore. Shares closed at 524 per share up 1.20 percent on Friday from the previous close price.
The company’s revenue has increased from Rs 15,373 crore in FY 18-19 to Rs 35,244 crore in FY 22-23 during the past three years. During the same period, net profit increased from Rs 517 crore to Rs 1,828 crore, accounting for 29 percent of the 5-year CAGR.
EID Parry plans to develop its ethanol and extra-neutral alcohol production capacity throughout its plants in order to benefit from the green energy space.
The business planned to invest Rs 286 crore to expand its ethanol production capacity to roughly 582 KLPD, while the distillery facility at Haliyal would be extended to 120 KLPD from 50 KLPD capacity.
EID Parry is South India’s largest sugar producer, producing sugar, nutraceuticals, and ethanol. It also has a substantial position in biopesticides through its subsidiary, Coromandel International Limited.
Triveni Engineering and Industries Ltd
Triveni Engineering and Industries shares closed at Rs 381.30 on Friday, up 0.70 percent from the previous close price. The company has a market capitalization of Rs 8,358 crores.
The company’s revenue has increased from Rs 3,370 crore in FY 18-19 to Rs 5,617 crore in FY 22-23 during the past three years. During the same period, net profit increased from Rs 119 crore to Rs 1,792 crore, accounting for 72 percent of the 5-year CAGR.
The Company shares have delivered a 39 percent return in the last six months and 41 percent in a year.
Presently, the company has a distillation capacity of 660 KLPD, and the company board has approved a Rs 460 crore capital expenditure for two new ethanol facilities to increase ethanol output to 1,110 KLPD.
The company planned to expand its ethanol output from 18 million to 31 million liters by FY25, as well as to transform 4.5 million tonnes of sugar into ethanol.
Triveni Engineering and Industries Ltd. is an Integrated and diversified conglomerate in the business of sugar, ethanol, and engineering.
Dalmia Bharat Sugar & Industries Ltd
The company belongs to the Small-cap category with a market capitalization of Rs 3,702 crore. Shares closed at 456.55 a share, up 1.44 percent on Friday from the previous close price.
The company’s revenue has increased from Rs 2,244 crore in FY 18-19 to Rs 3,252 crore in FY 22-23 during the past three years. During the same period, net profit increased from Rs 134 crore to Rs 250 crore, accounting for 14 percent of the 5-year CAGR.
The Dalmia Bharat recently commissioned a 110 KLPD grain distillery in Jawaharpur (UP), increasing the overall distillery capacity of the company to 710 KLPD.In addition, the company’s Nigohi (UP) 250 KLPD grain-based distillery is planned to be operational by the end of FY24.
The Company shares have delivered a 31 percent return in the last six months and 34 percent in a year.
Dalmia Bharat Sugar & Industries is engaged in the manufacturing of sugar, generation of power, manufacturing of Industrial alcohol, and manufacturing of refractory products.
Written by Omkar Chitnis
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