Who could gain from Centre's E100 fuel push? Markets see opportunities across sectors—See list

Auto, sugar, ethanol and biofuel-linked companies took centre stage on Dalal Street in Monday's trade after the Centre cleared norms for vehicles running on 100 per cent ethanol -- officially known as E100. The clearance to E100 marks a significant step in the country's push towards alternative fuels and lower dependence on imported crude oil. Union Minister Nitin Gadkari said last week that all auto makers can now introduce vehicles that run entirely on ethanol fuel under the newly approved framework.

The central government aims to create opportunities across the ethanol value chain, spanning automobile companies, ethanol producers, biofuel technology providers and fuel marketers.

E100 Push: Sectors gaining market attention

The move comes at a time when ethanol blends are estimated to have enabled savings to the tune of Rs 1 lakh crore in crude oil imports, following the removal of excise duty on higher ethanol-blended petrol, according to Zee Business research.

Analysts say that the move is set to translate to a more stable revenue stream for companies that have active long-term supply agreements with oil marketing companies (OMCs).

How much ethanol can sugar makers produce?

Source: Zee Business estimates

Maruti Suzuki, Hero MotoCorp, EID Parry, Renuka Sugars, Indian Oil shares in spotlight

Most sectors staged broad-based gains on Monday after Washington and Tehran announced a peace deal after nearly four months of the Middle East conflict, which began with joint American-Israeli strikes killing Iran's Supreme Leader on February 28.

Maruti Suzuki shares jumped as much as 4.5 per cent Rs 13,961 apiece on NSE while Hero MotoCorp rose 2.2 per cent to an intraday high of Rs 5,073.4. The Hyundai Motor India stock rose to as high as Rs 2,059, rising 3.5 per cent in intraday trade.

Maruti Suzuki has showcased a WagonR running on 100 per cent ethanol and is widely expected to further expand its flex-fuel portfolio. Hero recently rolled out its Splendor+ Flex Fuel and HF Deluxe Flex Fuel motorcycles -- both designed to operate on E100 fuel. Hyundai Motor has unveiled the Creta Flex Fuel prototype and is preparing for a commercial rollout. Other auto makers like Tata Motors, Mahindra & Mahindra and Toyota (unlisted) also have their flex fuel offerings in the pipeline.

Among the sugar and ethanol producers, Shree Renuka Sugars surged as much as 11.7 per cent and Bajaj Hindusthan Sugar soared 7.6 per cent. Others in the basket like EID Parry India, Triveni Engineering and Industries, Balrampur Chini and Dhampur Sugar Mills jumped around 3-6 per cent each.

The government's ethanol blending programme has encouraged sugar companies to diversify revenue streams beyond traditional sugar production, and analysts see a potential shift towards E100 vehicles strengthening the sector's long-term growth prospects.

Among OMCs, Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation shares also jumped, rising 4.8-5.5 per cent in intraday trade.

The three PSUs already play a central role in the country's ethanol blending programme and are set to be responsible for scaling fuel distribution infrastructure if E100 adoption gathers momentum.

Why ethanol-blended fuel matters to the economy and the markets

The country has been steadily increasing ethanol usage as part of its strategy to reduce crude oil imports, improve energy security and support farmers, in a broader push to reduce dependence on oil imports, cut emissions and support its sugarcane-based biofuel industry. While E20 fuel is currently being rolled out across the nation, the approval of E100 norms opens the door for a new category of vehicles capable of running entirely on domestically produced biofuel, say analysts.

Currently, most petrol sold in the country contains ethanol blends, with E20 fuel (20 per cent ethanol, 80 per cent petrol) being rolled out nationwide.The switch to E100 will allow auto makers to introduce vehicles designed to operate entirely on ethanol fuel, subject to compliance with the approved standards.

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