According to stock market experts, these industrial alcohol maker stocks are surging today because of the new announcement by the Government of India (GoI) in regard to ethanol blending price. On Wednesday last week, Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi approved hike in the cost of ethanol procured by the public sector oil marketing companies (OMCs) from distilleries. This is going to benefit industrial alcohol maker companies in India. 

 

 

 

Market experts said that Dalal Street is discounting on the benefit these companies are expected to benefit and advised investors to add Praj Industries and Global Spirits stocks in their portfolio as there are limited companies on Dalal Street that deals in industrial alcohol.

 

What's is fueling industrial alcohol stocks?

On why industrial alcohol maker companies are skyrocketing today, Avinash Gorakshkar, Head of Research at Profitmart Securities said, "The Cabinet Committee on Economic Affairs has given its approvalfor a hike in the cost of ethanol procured by the public sector oil marketing companies (OMCs) from distilleries. After this nod, price of ethanol from C-heavy molasses have gone up from ₹46.66 to ₹49.41 per litre. The price of ethanol from B-heavy molasses has been hiked from ₹59.08 per litre to Rs60.73 per litre as well. This hike is going to benefit industrial alcohol maker companies like BCL Industries, Global Spirits and Praj Industries. as such companies are limited on Dalal Street, these stocks have surged voer 5 per cent during early morning deals."

 

On how these industrial alcohol maker companies would benefit from this GoI's decision, Vaibhav Kaushik, Research Analyst at GCL Broking said, "Due to rise in ethanol prices, companies other than rice makers, who produce ethanol from the broken rice, would be a major beneficiaries as GoI has barred rice maker companies to sell molasses for ethanol blending. As demand for molasses for ethanol blending are rising continuously, these limited companies are expected to report improved margins and order book in upcoming quarters."

 

Stocks to buy today

On stocks to buy today, Vaibhav Kaushik advised investors to add Global Spirits shares and Praj Industries stocks in one's portfolio.