The ethanol industry in India
India has been blending ethanol with petrol to reduce dependence on imported crude oil. The blending rate has grown from 1.5% in 2013-14 to 20% in 2025-26. India reached the 20% target 5 years ahead of the original deadline.
Ethanol production capacity has also expanded, rising from 421 crore litres in 2014 to around 2,000 crore litres in 2026. This growth has encouraged sugar companies to invest in distilleries.
But the industry also faces uncertainty. If the government restricts the use of sugarcane juice and B-heavy molasses to make ethanol, it will affect raw material availability.
Overview of top 5 ethanol stocks
Here’s a quick look at the 5 companies with businesses linked to ethanol production:
Balrampur Chini Mills Limited
Balrampur Chini Mills makes sugar, ethanol and green power. It has a distillery capacity of 1.050 kilolitres per day (KLPD). The company uses molasses to produce ethanol and has also planned to use sugarcane syrup. Its large distillery business gives it a direct link to India’s petrol-blending program.
EID Parry (India) Limited
EID Parry makes sugar, ethanol and other alcohol products. Its distillery capacity reached 582 KLPD in FY26. During the year, it produced around 163.7 crore litres of alcohol, including ethanol and extra neutral alcohol (ENA). It can adjust its product mix based on market conditions.
Piccadily Agro Industries Limited
Piccadily Agro makes sugar, alcohol and spirits. Its distilleries produce ethanol and ENA, which is also used to make alcoholic beverages. In FY26, the company increased its distillery capacity to 450 KLPD. This includes a new 200 KLPD plant in Chhattisgarh.
Triveni Engineering and Industries Limited
Triveni Engineering operates in 3 main areas: sugar, distillery products and engineering. Its distilleries produce ethanol and other alcohol products. Ethanol made up 92% of its alcohol sales in the 3rd quarter of FY26.
Dalmia Bharat Sugar and Industries Limited
Dalmia Bharat Sugar makes sugar, ethanol and power. It has a distillery capacity of 950 KLPD, including grain-based and molasses-based facilities. It also generates electricity from bagasse, the fibrous material left after sugarcane is crushed. This gives the company more than one source of income.
Pros and cons of investing in ethanol stocks
Ethanol stocks have drawn more attention as the use of ethanol blending has increased. But there are a few important things to consider before investing.
The industry has room to grow, but not every company will benefit equally. A company may still struggle even when ethanol dem/and is strong.
How to pick the right ethanol stocks?
Don’t buy ethanol stocks just because the government is promoting ethanol or everyone else is buying them. Check these points first:
- Ethanol business: Find out how much of the company’s business comes from ethanol. Some companies depend more on sugar or other products.
- Distillery capacity: Check how much ethanol the company can produce and whether its plants are being used at proper capacity. A large plant is useful only if the company can sell its output.
- Raw material costs: Sugarcane, molasses, and grain prices affect production costs. Higher costs can reduce profits.
- Government rules: Ethanol prices and the types of raw materials allowed for production can change. These decisions may affect the company’s earnings.
- Sales and profits: Look at the company’s results over several years. Check whether higher revenue is leading to better profits.
- Cash flow: Check whether the company has enough cash to run its business and pay for expansion. Accounting profits alone do not tell the full story.
The bottom line
Ethanol stocks offer a direct exposure to India’s growing biofuel industry. However, investing in an individual stock may require studying a lot of factors. Moreover, if the particular company doesn’t perform well, your entire investments can get affected.
For a more diversified investment, you can look at mutual funds that invest in sugar or ethanol stocks. On the Millions app, you can start a SIP in a suitable scheme and invest a small amount regularly. However, don’t invest just because ethanol is in the news. Understand the sector and the risks involved before investing.
