5 Ethanol stocks with PE below industry average to keep on your radar
India’s ethanol stocks with low P/E ratios offer growth potential amid rising biofuel adoption. Key players include E I D-Parry, Dalmia Bharat, DCM Shriram, Dhampur Sugar, and Avadh Sugar, focusing on ethanol expansion and renewable energy. Despite mixed financial performances, their alignment with government policies positions them to capitalize on India’s biofuel targets, offering compelling opportunities for investors.
Ethanol stocks with below-average PE ratios present compelling opportunities as India accelerates its biofuel adoption targets. With government mandates pushing for increased ethanol blending in fuel, companies in this sector are positioned for substantial growth. These undervalued stocks offer potential for significant returns as the industry expands to meet national energy goals.
1. E I D-Parry (India) Ltd
E I D-Parry (India) Ltd, part of the Murugappa Group, is a major player in India’s sugar and ethanol industries, tracing its roots back to 1788, making it one of the oldest companies in the country. Operating primarily in Tamil Nadu and Andhra Pradesh, E I D-Parry is involved in producing sugar, ethanol, and nutraceuticals Known for its focus on sustainability.
The company has a robust distillery capacity and has been progressively expanding its ethanol production. This aligns with India’s biofuel policy, where ethanol blending is encouraged as a renewable energy source. E I D-Parry continues to invest in green energy solutions, positioning itself as a forward-thinking company in the biofuels and sugar sectors.
E I D-Parry currently trades at a P/E of 15.90. Revenue from operations has decreased by 16.54 percent from Rs. 35,244 crore in FY23 to Rs. 29,413 crore in FY24. The company’s net profit has decreased from Rs. 1,828 crore in FY23 to Rs. 1,618 crore in FY24, which has fallen by 11.48 percent.
With a market capitalisation of Rs. 13,877 crores, E I D-Parry Limited’s share price closed at Rs. 782 per equity share.
2. Dalmia Bharat Sugar & Industries Ltd
Founded in 1935, Dalmia Bharat Sugar & Industries Ltd. (DBSIL) is a key entity of the Dalmia Bharat Group, with substantial sugar production operations in Uttar Pradesh and Maharashtra. With a cane crushing capacity of about 27,500 TCD, the company also produces ethanol, industrial alcohol, and generates power through cogeneration. DBSIL has recently expanded its distillery capabilities to cater to India’s growing demand for ethanol, aligning with sustainable and innovative practices.
The company emphasises operational efficiency and aims to strengthen its market presence, focusing on renewable energy integration. Dalmia Bharat’s commitment to sustainable growth positions it as a significant player within the evolving sugar and biofuel sectors.
Dalmia Bharat Sugar & Industries currently trades at a P/E of 12.24. Revenue from operations has decreased by 10.85 percent from Rs. 3,252 crore in FY23 to Rs. 2,899 crore in FY24. The company’s net profit has increased from Rs. 250 crore in FY23 to Rs. 272 crore in FY24, which has grown by 8.8 percent.
With a market capitalisation of Rs. 3,342 crores, Dalmia Bharat Sugar & Industries Limited’s share price closed at Rs. 413 per equity share.
3. DCM Shriram Industries Ltd
DCM Shriram Industries Ltd, founded in 1989, is a diversified company operating in sugar, fertilisers, and chemicals. Based in Uttar Pradesh, it has a strong ethanol production component, utilising both sugarcane and grains as feedstock. The company has consistently expanded its distillery operations, supporting India’s renewable energy objectives through ethanol production. With a commitment to sustainable agriculture, DCM Shriram is contributing to India’s biofuel agenda while ensuring robust financial health.
The company’s strategic growth in ethanol output not only enhances its renewable energy profile but also positions it as a reliable partner in advancing sustainable fuel alternatives within the sugar industry.
DCM Shriram Industries currently trades at a P/E of 11.4. Revenue from operations has decreased by 10.85 percent from Rs. 2,351 crore in FY23 to Rs. 2,083 crore in FY24. The company’s net profit has increased from Rs. 60 crore in FY23 to Rs. 115 crore in FY24, which has grown by 91 percent.
With a market capitalisation of Rs. 1,597 crores, DCM Shriram Industries Limited’s share price closed at Rs. 183.64 per equity share.
4. Dhampur Sugar Mills Ltd
Dhampur Sugar Mills Ltd, established in 1933, is among India’s leading integrated sugar producers, with substantial operations in Uttar Pradesh and Uttarakhand. It has a cane crushing capacity of over 20,000 TCD and produces ethanol through its distilleries, which have been expanded to meet the rising biofuel demand. Known for its innovation and sustainability focus, Dhampur Sugar invests in renewable energy, contributing significantly to India’s ethanol-blending programs.
The company’s integrated approach, involving sugar and ethanol production, aligns well with government policies promoting biofuels, making it a notable contributor to renewable energy and an industry leader in sustainable practices.
Dhampur Sugar Mills at a P/E of 16.09. Revenue from operations has decreased by 22.5 percent from Rs. 2,408 crore in FY23 to Rs. 1,864 crore in FY24. The company’s net profit has decreased from Rs. 111 crore in FY23 to Rs. 46 crore in FY24, which has fallen by 58.5 percent.
With a market capitalisation of Rs. 1,144 crores, Dhampur Sugar Mills Limited’s share price currently trades at Rs. 175 per equity share.
5. Avadh Sugar & Energy Ltd
Established in 1990, Avadh Sugar & Energy Ltd is an integrated sugar manufacturer in Uttar Pradesh specialising in sugar, ethanol, and power generation from bagasse. The company’s distilleries produce ethanol from B-heavy molasses and sugarcane juice, with plans for further capacity expansion to support India’s biofuel policies.
Avadh Sugar emphasises sustainable practices, focusing on renewable energy initiatives that align with government policies on biofuels. By increasing its ethanol production, the company enhances its contributions to the renewable energy sector and positions itself as a responsible player within the sugar and ethanol industries, catering to the growing demand for sustainable fuel alternatives in India.
Avadh Sugar & Energy currently trades at a P/E of 13.23. Revenue from operations has decreased by 3.7 percent from Rs. 2,798 crore in FY23 to Rs. 2,694 crore in FY24. The company’s net profit has increased from Rs. 100 crore in FY23 to Rs. 128 crore in FY24, which has grown by 28 percent.
With a market capitalisation of Rs. 1,130 crores, Avadh Sugar & Energy Limited’s share price currently trades at Rs. 564.50 per equity share.
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Source Link : Trade Brains
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