Scarce resources have always been a significant investment destination due to their demand. One such sector is energy. It is one of the most focused sectors on the geo-political and national level. Therefore, investors were expecting significant reforms for the sector in the Budget 2025.
However, the reforms were only made regarding the nuclear energy mission, renewable and clean energy initiatives, etc. The markets didn’t seem to receive this well, and the energy stocks tumbled significantly during and post the Budget 2025 announcements.
Despite this pressure, energy investments are a significant investment destination due to their market viability. Therefore, investors can explore the best energy stocks for diversifying their portfolios.
Dive deeper into the industry: The role of the energy sector in powering India’s growth.
Energy industry: Investment in black gold!
The industry as a whole is a cohort of different commodities like oil, gas, power, petroleum, etc. Post-Budget 2025, the energy stocks were adversely affected due to moves like LPG subsidies and pressure on government revenue due to tax reliefs.
Moreover, the selloff pressure was evident in the indices like NIFTY energy and NIFTY oil and gas. The NIFTY energy index was down by nearly 5.06% at the market closing on February 3, 2025. NIFTY oil and gas was also down on the same day.
However, investors can benefit from this down market to find a low-cost but fundamentally strong investment opportunity.
Explore more: Top Renewable Energy Stocks to Invest in India for 2024
Best energy stocks in India
Here are the top energy stocks curated based on their market capitalisation and ranked based on their return on equity for 1-year as of February 7, 2025.
| Particulars | Market Capitalisation (in ₹ crores) | Return on Equity | Price to Earnings ratio (in times) | Debt to Equity ratio (in times) |
| NTPC | 3,07,238.9 | 13.6% | 13.9 | 1.4 |
| Power Grid Corporations | 2,58,835.8 | 19.0% | 16.7 | 1.3 |
| Adani Power | 1,90,456.7 | 57.1% | 14.7 | 0.6 |
| Adani Green | 1,56,692.5 | 14.7% | 107.6 | 6.3 |
| Tata Power | 1,17,188.9 | 11.2% | 30.2 | 1.7 |
Adani Power Ltd
Spanned across 7 Indian states, the thermal power plants are the key strengths of the company’s portfolio. It has a capacity of 17.55 GW power generation and is the largest private thermal producer in India. The company has generated significant returns for its investors in recent years. Its shares are trading at ₹494.1 as of February 7, 2025.
Financial Analysis
| Particulars | 9M FY 2025 | FY 2024 | FY 2023 |
| Revenue from operations(in ₹ crores) | 41,965.7 | 50,351.3 | 38,773.3 |
| Earnings Per Share | 25.7 | 51.6 | 24.5 |
| Net Profit (in ₹ crores) | 10,150.3 | 20,828.7 | 10,726.6 |
Key Performance Highlights
- Its net profit has been growing at nearly 33.5% compounded annual growth rate in the past 3 years.
- Compared to the current capacity of 31 GW, the company is expected to unlock the potential of 49 GW by FY 2032.
- Its 9M power generation has increased by 20% in FY 2025 compared to FY 2024.
- The company is rated AA-/Positive by CRISIL.
Power Grid Corporation of India Ltd
The company has been operating in the power transmission sector for the past 35 years. Apart from that, the company operates in the telecom sector, specific consultancy, smart meter solutions, energy audit, solar power generation, etc. As of January 2025, it currently has ₹1.43 lakh crores of projects in hand. The company’s share is trading at ₹278.1 as of February 7, 2025.
Financial Analysis
| Particulars | 9M FY 2025 | FY 2024 | FY 2023 |
| Revenue from operations(in ₹ crores) | 30,448.9 | 43,391.6 | 42,635.9 |
| Earnings Per Share | 11.8 | 16.5 | 16.2 |
| Net Profit (in ₹ crores) | 11,017.4 | 15,377.4 | 15,335.5 |
Key Performance Highlights
- The company is expected to expand its capex by nearly 215 times up to 2027-32.
- Its net profit has grown 40.5% as of FY 2024 in the last 5 years.
- It has the largest electricity transmission utility in the country and is rated as AAA/Stable by CRISIL.
- The operating cash flow has decreased by 7.3% in FY 2024.
Adani Green Energy Ltd
Renewable energy is one of the most futuristic industries for India. Being a significant part of the Adani group, Adani Green has a robust portfolio of 20.4 GW projects. The company generates 66% solar energy up to Q2 FY 2025 and is expected to grow this capacity by nearly 8% by 2030. As of February 7, 2025, its share is trading at ₹989.5.
Financial Analysis
| Particulars | 9M FY 2025 | FY 2024 | FY 2023 |
| Revenue from operations(in ₹ crores) | 8,254 | 9,220 | 7,776 |
| Earnings Per Share | 7.1 | 6.2 | 5.4 |
| Net Profit (in ₹ crores) | 1,618 | 1,260 | 973 |
Key Performance Highlights
- The company’s net profit has grown by nearly 30% in FY 2024.
- 92% of the company’s contracts are long-term, 25-year fixed tariff power purchase contracts.
- India’s renewable energy capacity is expected to increase by 24% up to 2030.
- Its share has dived down by nearly 57% from September 2024.
- NTPC Ltd
Popularly known as NTPC, the National Thermal Power Corporation, the company is actively generating electricity from coal, gas, hydro, nuclear, etc. It is a public sector unit and has an installed capacity of 76 gigawatts. Over the 29 years of its operations, the company has spanned 97 locations in India. The company’s stock is trading at ₹316.8 as of February 7, 2025.
Financial Analysis
| Particulars | 9M FY 2025 | FY 2024 | FY 2023 |
| Revenue from operations(in ₹ crores) | 1,26,099.0 | 1,61,985.0 | 1,63,769.7 |
| Earnings Per Share | 14.3 | 18.6 | 17.7 |
| Net Profit (in ₹ crores) | 13,871.2 | 18,079.3 | 17,196.7 |
Key Performance Highlights
- The company plans to expand its capacity to 130 GW by 2032.
- Its sales have grown by 63% in the past 5 years.
- The company successfully launched an IPO for its subsidiary NTPC Green Energy in November 2024.
- Its integrated energy supply for major Indian states has helped the company to consistently achieve a net profit margin above 10% in recent years.
Tata Power Company Ltd
The company has a capacity of 25.6 GW of power generation and operates in conventional and renewable energy generation space. In the renewable energy sector, it majorly produces solar and wind power. Its shares are trading at ₹367.1 as of February 7, 2025.
Financial Analysis
| Particulars | 9M FY 2025 | FY 2024 | FY 2023 |
| Revenue from operations(in ₹ crores) | 48,382.6 | 61,448.9 | 55,109.1 |
| Earnings Per Share | 11.4 | 11.0 | 3,809.6 |
| Net Profit (in ₹ crores) | 3,469.2 | 4,280.1 | 8.1 |
Key Performance Highlights
- Its operating cash flows have surged by nearly 75% in FY 2024.
- The company’s operations are spanned outside India in countries like Bhutan, Georgia, Indonesia and Zambia.
- It has successfully established 5,500 public electric vehicle charging points across the country.
- Overall, the company has been growing at a decent pace in recent years, and its net profit has surged by 26% CAGR in the past 5 years.
Peer Analysis
| Particulars | P/BV (in times) (Ind. avg = 1.8 ) | Good/ Bad | Operating Profit Margin (Ind. avg = 42.1) | Good/ Bad | EV/ EBITDA (in times)(Ind. avg = 16.5) | Good/ Bad |
| NTPC | 1.8 | 👍 | 28.1 | 👎 | 9.1 | 👍 |
| Power Grid Corporation | 2.8 | 👎 | 84.8 | 👍 | 9.2 | 👍 |
| Adani Power | 3.4 | 👎 | 38.5 | 👎 | 9.1 | 👍 |
| Adani Green | 14.8 | 👎 | 75.1 | 👍 | 23.6 | 👎 |
| Tata Power | 3.4 | 👎 | 18.2 | 👎 | 11.0 | 👍 |
Summing up!
The energy sector was one of the negatively affected sectors post-Budget 2025. However, energy stocks are crucial due to their scarce availability and humongous demand. Therefore, investors can explore some of these conventional and renewable energy stocks to diversify their portfolios. It can be a futuristic investment for the upcoming years.
Also, read about The renewable energy industry in India: A game-changer for the environment
