India’s push to expand the availability of E85 fuel is opening up opportunities across the biofuel and automobile sectors.
The government has launched E85 at 48 fuel stations and plans to increase the network to 500 outlets by December 2026 and around 5,000 stations by the end of 2027.
The move forms part of a broader strategy to reduce crude oil imports and increase the use of cleaner fuels.
What is E85 fuel?
E85 contains around:
- 80-85 percent ethanol
- 15-20 percent petrol
The fuel is meant for flex-fuel vehicles (FFVs) and cannot be used in conventional petrol vehicles.
Flex-fuel vehicles are designed to operate on ethanol blends ranging from E20 to E100.
E85 has been introduced at a price nearly ₹20 per litre lower than conventional petrol.
Blending target moves higher
India’s ethanol blending level has risen sharply over the past decade.
Blending increased from 1.53 percent in 2014 to 20 percent in 2026.
Officials expect wider use of E85 and flex-fuel vehicles to push overall blending levels to around 26 percent by 2030-31.
Vehicle compatibility remains crucial
The success of E85 will depend on two factors:
- Expansion of fuel stations.
- Availability of flex-fuel vehicles.
Using E85 in standard petrol vehicles can affect performance and durability, making vehicle compatibility essential.
Automakers preparing for higher ethanol blends
Maruti Suzuki WagonR Flex Fuel
Maruti Suzuki has introduced the WagonR Flex Fuel, India’s first mass-market flex-fuel passenger vehicle.
The model can run on blends ranging from E20 to E100 and has been homologated for E85 fuel.
Hero Splendor+ Flex Fuel
Hero MotoCorp’s Splendor+ Flex Fuel supports ethanol blends between E20 and E85.
The motorcycle is powered by a 97.2 cc engine, producing:
- 6.3 kW of power.
- 8.3 Nm of torque on E85 fuel.
Hero HF Deluxe Flex Fuel
The HF Deluxe Flex Fuel also supports E20-E85 blends.
It comes with:
- Revised ECU.
- Upgraded fuel delivery system.
- Side-stand engine cut-off feature.
- Tubeless tyres.
Five stocks that could benefit
1. CIAN Agro Industries & Infrastructure Ltd
The company has exposure to ethanol through subsidiary Manas Agro Industries.
Its operations include:
- Sugar manufacturing.
- Distillery operations.
- Ethanol production.
It has also partnered with the Ram Charan Group to explore ethanol production using carbon dioxide.
Key metrics
- Market cap: ₹4,299 crore.
- Share price: Around ₹1,536.
- About 57% below its 52-week high of ₹3,633.
- P/E ratio: 19.3.
- Industry P/E: 18.4.
Financial performance
- Revenue rose from ₹490 crore to ₹656 crore, up 34%.
- Operating profit increased from ₹46 crore to ₹123 crore, up 167%.
- Net profit climbed from ₹8 crore to ₹64 crore, up 700%.
2. Praj Industries
Praj Industries supplies ethanol plant technology and bioenergy solutions.
Founded in 1983, the company serves customers in more than 100 countries.
Its business supports both grain-based and sugar-based ethanol production.
Key metrics
- Market cap: ₹6,104 crore.
- Share price: Around ₹332.
- About 35% below its 52-week high of ₹514.
- P/E ratio: 315.
- Industry P/E: 30.5.
Financial performance
- Revenue declined from ₹860 crore to ₹845 crore, down 1.7%.
- Operating profit fell from ₹75 crore to ₹23 crore, down 69%.
- Net profit dropped from ₹40 crore to ₹12 crore, down 70%.
3. Balrampur Chini Mills
Balrampur Chini Mills operates across sugar production, ethanol manufacturing and power generation.
The company has expanded its distillery capacity to tap opportunities arising from higher ethanol blending.
Key metrics
- Market cap: ₹11,407 crore.
- Share price: Around ₹540.
- About 14% below its 52-week high of ₹628.
- P/E ratio: 30.1.
- Industry P/E: 16.2.
Financial performance
- Revenue increased from ₹1,504 crore to ₹1,604 crore.
- Operating profit declined from ₹365 crore to ₹285 crore.
- Net profit fell from ₹229 crore to ₹160 crore.
4. Maruti Suzuki India
India’s largest passenger vehicle maker has introduced the WagonR Flex Fuel.
The model can operate on ethanol blends up to E100, positioning the company for the growth of flex-fuel mobility.
Key metrics
- Market cap: ₹4.20 lakh crore.
- Share price: Around ₹13,366.
- About 23% below its 52-week high of ₹17,372.
- P/E ratio: 28.6.
- Industry P/E: 28.5.
Financial performance
- Revenue rose from ₹40,920 crore to ₹52,462 crore, up 28%.
- Operating profit increased from ₹4,844 crore to ₹6,158 crore, up 27%.
- Net profit stood at ₹3,659 crore, compared with ₹3,911 crore a year ago.
5. Hero MotoCorp
Hero MotoCorp has launched two flex-fuel motorcycles:
- Splendor+ Flex Fuel
- HF Deluxe Flex Fuel
Both models support ethanol blends between E20 and E85.
Key metrics
- Market cap: ₹99,307 crore.
- Share price: Around ₹4,963.
- About 22% below its 52-week high of ₹6,390.
- P/E ratio: 17.
- Industry P/E: 35.4.
Financial performance
- Revenue increased from ₹9,970 crore to ₹12,978 crore, up 30%.
- Operating profit rose from ₹1,441 crore to ₹1,870 crore, up 29%.
- Net profit climbed from ₹1,169 crore to ₹1,474 crore, up 26%.
Why E85 matters
The expansion of E85 fuel infrastructure could benefit multiple segments.
These include:
- Ethanol producers.
- Sugar companies.
- Biofuel technology suppliers.
- Passenger vehicle makers.
- Two-wheeler manufacturers.
However, wider adoption will depend on how quickly flex-fuel vehicles become available and how rapidly the fuel network expands.
TL;DR
India plans to expand E85 fuel stations from 48 currently to about 5,000 by 2027. Companies linked to ethanol production and flex-fuel vehicles, including CIAN Agro, Praj Industries, Balrampur Chini Mills, Maruti Suzuki and Hero MotoCorp, could benefit from the transition.
AI summary
- India aims to expand E85 fuel outlets to 5,000 by 2027.
- E85 contains 80-85% ethanol and requires flex-fuel vehicles.
- Maruti Suzuki and Hero MotoCorp have launched flex-fuel models.
- Ethanol and sugar companies may benefit from rising demand.
- Vehicle compatibility will be key to wider adoption.
