Top 5 Stocks Benefiting from India’s Ethanol Expansion Push to look out for

SYNOPSIS: India’s ethanol blending push toward E20 is creating opportunities for ethanol ecosystem companies. The article shows a few players that are expanding distillery capacity, improving ethanol mix, and strengthening global biofuel capabilities to benefit from rising demand.

Over the past decade, India has steadily accelerated its efforts to blend ethanol with petrol, turning it into one of the country’s key initiatives in the energy transition journey. What initially started as a step to reduce dependence on imported crude oil has gradually evolved into a broader policy framework that also supports the country’s long-term energy security goals.

Reflecting this progress, the Ministry of Petroleum and Natural Gas issued a fresh notification on 17th February 2026, allowing oil companies to sell Ethanol Blended Motor Spirit (EBMS) with an ethanol content of up to 20 percent (E20). This new directive will come into effect from 1st April 2026, replacing the earlier 2021 notification that allowed blending of up to 10 percent ethanol.

The impact of the programme is already becoming visible. Between FY15 and FY25, ethanol blending by public sector oil marketing companies helped India save more than Rs. 1.4 lakh crore in foreign exchange, largely by reducing the country’s reliance on crude oil imports.

In the same period, the initiative helped substitute around 245 lakh metric tonnes of crude oil, which in turn reduced carbon emissions by nearly 736 lakh metric tonnes. To put that into perspective, this environmental benefit is roughly equivalent to planting around 30 crore trees.

Given that India still imports close to 80 percent of its crude oil requirements, the ethanol blending programme is expected to remain a major policy focus in the coming years. As the country gradually moves toward 20 percent ethanol blending, this shift is also creating a structural opportunity for companies involved in ethanol production and its broader supply chain. Let’s take a closer look at the following five companies that could benefit from India’s growing ethanol blending push:

Balrampur Chini Mills Limited 

With a market cap of Rs. 9,722 crores, the stock closed in the red at Rs. 481.4 on BSE, down by around 0.5 percent on Friday. Balrampur Chini Mills Limited (BCML), one of the largest integrated sugar manufacturing companies in India and India’s second largest private sector sugar company, is engaged in the business of production of sugar, ethanol and co-generated power. In FY 24-25, the sugar segment contributed 77.16 percent of the company’s revenues, while the distillery segment accounted for 22.53 percent.

During Q3 FY26, the company reported sugarcane crushing of around 387.6 lakh quintals, marking an increase of about 8.4 percent year-on-year. This growth was mainly supported by the early start of operations at some plants and improved capacity utilisation. At the same time, gross sugar recovery (C-heavy terms) saw a marginal improvement of 8 basis points to 10.63 percent. Despite a reduction in the overall sugarcane cultivation area, the company expects its crushing volumes to remain higher due to additional cane allocation by the state government.

Currently, BCML operates 10 sugar factories across Uttar Pradesh, with a combined sugarcane crushing capacity of 80,000 tonnes per day (TCD). Alongside this, the company has distillery operations with a capacity of 1,050 kilolitres per day (KLPD) and cogeneration power capacity of 175.7 MW (saleable). In addition to its existing operations, the company is also working on setting up India’s first Poly Lactic Acid (PLA) plant with a capacity of 80,000 tonnes per annum, which could open up opportunities in biodegradable materials.

BCML first entered the industrial alcohol and ethanol segment in 1995 with the commissioning of its initial distillery. Since then, the company has steadily expanded its distillery operations, converting molasses into ethanol to cater to the growing demand from oil marketing companies while also strengthening its profitability and cash flows.

At present, the company operates five distilleries located at Balrampur, Babhnan, Mankapur, Gularia, and Maizapur, with a combined ethanol production capacity of 1,050 KLPD. The plants are capable of producing ethanol from multiple feedstocks, including B-heavy molasses, C-heavy molasses, sugarcane juice or syrup, and grains. Over time, ethanol has emerged as a central pillar of the company’s overall business strategy.

BCML has also significantly expanded its ethanol capabilities over the past few years. Between 2018 and 2023, the company invested around Rs. 700 crore, which helped triple its distillery capacity. The plants have been designed with flexible feedstock capabilities, allowing the company to operate efficiently and remain eligible for various government tenders.

For FY26, the company expects ethanol sales to reach around 26–27 crore litres, with the production mix estimated to be 65 percent from B-heavy molasses, 25 percent from C-heavy molasses, and 10 percent from syrup. However, recent policy decisions have created challenges for the profitability of the ethanol segment.

To ensure operations continue during the sugar off-season, the company also produces ethanol using grain-based feedstocks. Even here, certain challenges remain. For example, despite having the capacity to produce around 5 crore litres of maize-based ethanol, the government accepted tenders for only about 3.15 crore litres. Additionally, the profitability of this route is closely tied to fluctuations in maize prices, which can impact margins.

Praj Industries Limited 

With a market cap of Rs. 5,792 crores, the stock closed in the green at Rs. 315.1 on BSE, up by over 1 percent on Friday. Praj Industries Limited (PIL) is an industrial biotechnology company and engineering company. It has a diverse portfolio comprising bio-energy solutions, critical process equipment & modularisation, breweries, zero liquid discharge systems and high purity water systems.

The company holds around 10 percent of the global ethanol production market share, and its operations are broadly divided into three major revenue-generating segments: Bio Energy, which contributes about 71 percent of revenue, followed by Engineering at 18 percent, and High Purity Solutions, which accounts for the remaining 11 percent.

Among these, Bio Energy remains the company’s core business. The segment focuses on providing end-to-end solutions for first-generation (1G) and second-generation (2G) ethanol plants, along with Compressed Bio-Gas (CBG) projects. In addition to conventional biofuels, the company is also working on next-generation “Future Fuels”, including Sustainable Aviation Fuel (SAF), marine biofuels, and bio-hydrogen, with the long-term goal of supporting carbon-neutral transportation solutions.

On the global front, the company has partnered with Sweden-based Sekab to deploy its Celluniti technology, which enables the conversion of forest residues such as softwood into ethanol. This solution is primarily targeted at the European market, where demand for advanced biofuels continues to grow. The company is also helping existing ethanol plants enhance their profitability by installing specialised modules that enable the extraction of high-value co-products.

Meanwhile, the company’s ‘Grain-to-Ethanol’ technology is gaining increasing traction in international markets. In Brazil, for instance, it is supporting the industry in adopting a dual-feed ethanol production model, where maize is used alongside traditional sugarcane as feedstock. Beyond Brazil, the company is also expanding its low-carbon ethanol footprint in the United States and has secured orders for new ethanol plants in Paraguay, Colombia, Argentina, and parts of East Africa, strengthening its global presence in the biofuels sector.

Triveni Engineering and Industries Limited 

With a market cap of Rs. 7,880.3 crores, the stock closed in the green at Rs. 360 on BSE, up by over 5 percent on Friday. Triveni Engineering and Industries Limited is one of the largest integrated sugar & ethanol manufacturers & engineered-to-order turbo gearbox manufacturers in the country, and a leading player in the water and wastewater management business. During Q3 FY26, ethanol constituted 92 percent of alcohol sales, compared to 89 percent in Q3 FY25.

The company operates a network of advanced distilleries across Uttar Pradesh, including two facilities in Muzaffarnagar (MZN) along with plants in Sabitgarh (SBT), Milak Narayanpur (MNP), Rani Nangal (RNG), and Shamli. These facilities are capable of producing a range of products such as ethanol, Extra Neutral Alcohol (ENA), Rectified Spirit (RS), and Denatured Spirit (SDS). To maintain operational flexibility, the company uses a combination of sugarcane-based and grain-based feedstocks for its distillery operations.

The company has also expanded its presence in the sugar and ethanol segment through strategic acquisitions. On 11th March 2024, Triveni acquired a 25.43 percent equity stake in Sir Shadi Lal Enterprises Limited (SSEL). This was followed by an additional acquisition of 36.34 percent stake on 20th June 2024, taking the total shareholding to a controlling level and making SSEL a subsidiary of the company. SSEL operates two manufacturing units in Uttar Pradesh and is engaged in the production of sugar and ethanol/alcohol, further strengthening Triveni’s footprint in the sector.

Gulshan Polyols Limited

With a market cap of Rs. 971 crores, the stock closed in the green at Rs. 155.65 on BSE, up by around 0.13 percent on Friday. The business portfolio of Gulshan Polyols Limited covers starch, starch sugars, calcium carbonate, alcohol & ethanol business, agro based animal feed & on-site PCC plants with production facilities at Muzaffarnagar (UP), Bharuch (Gujarat), Dhaula Kuan (Himachal Pradesh), Abu Road (Rajasthan), Patiala (Punjab), Tribeni (West Bengal), Amlai & Borgaon (MP) and Goalpara (Assam). 

The company is India’s leading manufacturer of ethanol/bio-fuel, grain and mineral-based speciality products, with a 60 KLPD Ethanol & Distillery facility in Madhya Pradesh, along with a larger 500 KLPD plant also located in Madhya Pradesh. Additionally, it has a 250 KLPD facility in Assam, highlighting its geographic diversification and strong production capabilities in the ethanol segment.

EID Parry (India) Limited

With a market cap of Rs. 14,162 crores, the stock closed flat at Rs. 796.2 on BSE, down by around 0.01 percent on Friday. Founded in 1788, EID Parry Limited, a part of the Murugappa Group, operates across the sugar & biofuel and consumer products sectors and is one of India’s largest and most diversified business conglomerates.

It holds the distinction of setting up India’s first sugar plant in Nellikuppam in 1842 and has since remained a leader in driving innovation across its various businesses. The contribution of ethanol to the company’s overall revenue has grown from 15 percent in FY19 to 21 percent in FY25, reflecting a steady increase in its share.

EID Parry operates six sugar plants and one independent distillery across South India. These facilities are located in Nellikuppam, Pugalur, and Sivaganga in Tamil Nadu; Sankili in Andhra Pradesh; and Bagalkot, Haliyal, and Ramdurg in Karnataka. Together, these plants possess a total sugarcane crushing capacity of 40,800 TCD, a cogeneration capacity of 140 MW, and a distillery capacity of 582 KLPD. 

Additionally, the company operated specialised manufacturing plants for micro-algal production in Oonaiyur and Saveriyarpuram, Tamil Nadu, as a part of its nutraceuticals business. The company capitalises on its ethanol and Extra Neutral Alcohol (ENA) production capabilities to support the growing green energy sector.

Written by Shivani Singh

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