The Indian green energy sector is thus increasingly in motion, primarily because of government efforts and increased investments. In India, total renewable energy capacity crossed 201.45 GW of which in the overall installed capacity in the country stood at 46.36%.
India has witnessed the highest year on year growth at 9.83 percent in renewable energy. And, talking of solar energy capacity, it has gone up by thirty times in the last 9 years. As of September 2024, it stands at 90.76 GW. The targets for India have been pretty aggressive in respect of achieving 500 GW of non-fossil fuel-based energy by 2030. The targets for India are set to be rather aggressive in relation to targeting 500 GW of non-fossil fuel-based energy by 2030.
In this rapidly evolving ecosystem, certain companies stand out for their pioneering contributions. Each brings a unique proposition, shaped by market strength, financial resilience, and innovation-led strategies. These stocks hold immense potential for investors seeking to align with India’s energy transition story
Here are the best green energy stocks in India based on market capitalisation( as of November 15,2024) to look at are:
| Company Name | Market Cap (₹ Cr.) | Current Price (₹) | High / Low (₹) | Stock P/E | Book Value (₹) | Dividend Yield (%) | ROCE (%) | ROE (%) | Face Value (₹) |
| Adani Green Energy Ltd | 2,36,068 | 1,490 | 2,174 / 910 | 183 | 66.8 | 0.00 | 9.81 | 17.1 | 10.0 |
| Tata Power Company Ltd | 1,29,299 | 405 | 495 / 257 | 34.1 | 105 | 0.49 | 11.1 | 11.3 | 1.0 |
| SJVN Ltd | 40,779 | 104 | 170 / 75.2 | 44.1 | 37.2 | 1.73 | 4.99 | 5.90 | 10.0 |
| KPI Green Energy Ltd | 9,858 | 751 | 1,118 / 373 | 42.5 | 150 | 0.05 | 21.6 | 29.6 | 5.0 |
| BF Utilities Ltd | 3,494 | 928 | 1,129 / 557 | 139 | 43.8 | 0.00 | 8.61 | 7.05 | 5.0 |
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- Adani Green Energy Ltd
Adani Green Energy is the market leader in India’s renewable energy business, with a great portfolio of solar and wind power projects. Its high market capitalisation reflects the dominance of this stock as well as robust support by the Adani Group. High P/E, however, signifies premium valuation for the stock and is in tune with the renewed focus of the Indian government on the country’s renewable energy agenda. - Tata Power Company Ltd
Tata Power has diversified energy portfolios with both renewable and thermal power. The company has been aggressively expanding into renewable space and EV infrastructure. Its steady ROCE and ROE make it an attractive choice for long-term investors seeking stability. - SJVN Ltd
SJVN specialises in hydroelectric power generation. It remains granted significant support from the government, after which the company has started to look at solar and wind energy projects, scaling up its renewable portfolio. This has a relatively low P/E ratio with stable dividend yield for a conservative investor. - KPI Green Energy Ltd
KPI Green Energy is a fast-growing company focused on solar power generation and independent power projects. It stands out for its impressive ROCE and ROE, which highlight its operational efficiency and profitability. Its smaller market cap positions it as a promising mid-cap player in the renewable energy space. - BF Utilities Ltd
BF Utilities operates in the infrastructure and renewable energy sector, particularly focusing on wind energy projects. Although the company has a smaller market capitalization and a higher P/E, there is still room for growth coupled with its strategic expertise in renewable infrastructure development.
India is doing even better to improve the prospects for the green energy industry because it is trying to do everything in its power to meet renewable energy targets by becoming carbon neutral by 2070, an attractive opportunity for investors to capitalise on this trend.
Also Read: Top Renewable Energy Stocks to Invest in India for 2024
Key factors to consider
When considering investments in best green energy stocks in India, several key factors can significantly influence decision-making and potential returns. Here’s a detailed overview:
1. Market trends
Understanding current market trends is essential for identifying growth opportunities. This includes analysing:
- Demand for Clean Energy: The increasing shift towards sustainable energy sources is a critical driver.
- Emerging Technologies: Innovations in renewable technologies can create new investment avenues and enhance company valuations.
2. Company fundamentals
Evaluating a company’s financial health is important for many reasons
- Revenue Growth and Profits: Corporations that have steady revenue growth and good profit margins are considered more solid.
- Low debt levels indicate the capacity of companies to be more firm against economic fluctuations.
3. Regulatory environment
Government policies significantly impact the renewable energy sector:
- Incentives and Subsidies: A clear understanding of the regulatory framework enables the identification of environmentally friendly investments, wherein governments offer incentives for renewable energy projects.
- Compliance with Environmental Laws: Companies observing strict regulations will likely not carry such legal issues that might have an adverse impact on the stock.
4. Technological advancements
Keeping up with the technological innovations is very important:
- Heavy investment in R&D: Those companies that invest heavily for research and development as a measure of cost savings or of new products and applications may, in the long term, be potential growth companies.
- Adaptation to New Technologies: Companies that adopt the latest technologies, such as energy storage or green hydrogen, will likely get an edge.
Check out: Best Green Hydrogen Stocks to Invest in India for 2024
5. Commitment to sustainability
Investors will have to look for companies showing a good commitment and dedication towards the reduction of their carbon footprints:
- Carbon Reduction Programs: Companies that are clearly visible in sustainability are considered accountable to the environment, and thus there is a possibility of enhancing the brand reputation and marketability.
6. Volatility and risk factors
Investing in top green energy stocks in India involves specific risks, among which the following might be included:
- Price Volatility: There may be chances of world energy prices as well as macro-economic conditions influencing the industry, giving an opportunity for price volatility.
- High capital expenditure: Many renewable projects require a high up-front investment, and risks remain if proper care is not exercised while handling investments.
Conclusion
Investment in renewable energy stocks in India is very promising but needs cautious considerations based on many factors. Market trends, company fundamentals, regulatory environments, technological advancements, sustainability commitments, financial stability, strategic partnerships, and risk factors can make for well-informed investor decisions that focus strictly on the goals of investment.
FAQs
- What are the best green energy stocks to buy in India?
India’s green energy sector is thriving, offering exciting investment opportunities. Leading the way is Adani Green Energy Ltd (₹2,36,068 Cr market cap) with a price of ₹1,490 and strong ROE of 17.1%. Tata Power (₹1,29,299 Cr) at ₹405 blends stability and growth. SJVN Ltd (₹104) offers attractive dividends at 1.73%. KPI Green Energy (₹751) shines with a 29.6% ROE. BF Utilities (₹928) remains a niche pick for long-term investors. Explore these stocks for a greener portfolio!
- What are the top 5 solar stocks to invest in India?
India’s solar energy sector offers promising stocks for sustainable growth. Zodiac Energy Ltd leads with a 1-year return of 222.85% and a market cap of ₹794.43 Cr. Alpex Solar Ltd, at ₹794.40, boasts a strong 1-year return of 129.96%. Surana Solar Ltd offers affordability at ₹55.07 with a 146.95% 1-year return. Urja Global Ltd is a value pick at ₹18.05, achieving a 98.35% return. Taylormade Renewables Ltd provides long-term growth potential in renewable innovation.
- Which company buys the most renewable energy?
Amazon is one of the largest buyers of renewable energy globally. In 2023, the company announced 74 power purchase agreements (PPAs) totalling 8.8 gigawatts (GW) across 16 markets, bringing its total corporate PPA portfolio to 33.6 GW. This makes Amazon the eighth-largest clean energy portfolio holder globally, slightly trailing NextEra Energy, which leads with 34.6 GW. While Amazon doesn’t own its renewable energy projects, it remains a significant buyer of solar and wind power to meet its sustainability goals.
- What is the IPO of renewable energy in 2024?
The IPO of NTPC Green Energy Limited is one of the notable renewable energy offerings in 2024. This wholly-owned subsidiary of NTPC Limited will launch its initial public offering on 19th November 2024. The price band for the IPO has been set between ₹102 and ₹108 per equity share. This move highlights the growing interest in clean energy investments and offers an opportunity for investors to engage in India’s expanding renewable energy sector.
- Which company is leading in green energy in India?
Adani Green Energy Limited (AGEL), also known as Adani Renewables, is a prominent energy transition company in India and one of the largest green hydrogen companies globally. With a project portfolio of 20,434 MW, AGEL plays a significant role in the country’s green energy landscape. As part of the Adani Group’s commitment to a more sustainable and environmentally friendly future for India, the company continues to lead in solar and wind power projects, positioning itself at the forefront of India’s renewable energy growth.
