Energy stocks have gradually become a favourable choice for investors. In India, energy sector stocks mix green energy and fossil fuels. The best stocks to invest in are in the oil and gas space as it is the most populated space, holding a substantial market cap and weight in the index. Given their high profitability, the government highly regulates oil marketing companies, which eventually causes stock performance to rise and fall.
Also read: Top Renewable Energy Stocks To Invest in India in 2024
The list of the top 10 energy sector stocks in India
The energy sector stocks offer great investment and return values for new and experienced stock market investors. Upcoming is the top-performing energy stocks based on market cap value (as of Nov 14, 2024)
| Company Name | Market Cap | Stock P/E |
| Reliance Industries | 17,15,224 crore | 25.2 |
| ONGC | 3,15,577 crore | 7.56 |
| NTPC | 3,61,675 crore | 16.4 |
| Adani Green Energy | 2,36,613 crore | 18.4 |
| Power Grid Corp | 2,90,182 crore | 18.6 |
| IOCL | 1,90,340 crore | 11.1 |
| Adani Power | 2,11,688 crore | 16.8 |
| Tata Power | 1,29,397 crore | 34.1 |
| Gail (India) | 1,24,217 crore | 10.8 |
| BPCL | 1,29,313 crore | 9.68 |
A quick overview of the best energy stocks
Upcoming is a quick overview that you need to consider reading before investing in the energy sector stock.
- Reliance Industries
Reliance Industries offers a wide range of services in India’s energy sector. The company, owned by Mukesh Ambani, has the largest refinery complex in the world. It was established in Jamnagar and is known for contributing significantly to its revenue. Reliance has also pursued multiple renewable projects following government regulations, elevating a bright future for the company and potential investors.
- ONGC
ONGC (Oil & Natural Gas Corporation) is India’s largest oil extraction company. It is mostly engaged in producing and developing crude oil, natural gas, and other value-added products. ONGC’s business predominantly revolves around exploration and production. ONGC has been operating global wells and has joint ventures with various countries around the world.
- NTPC
NTPC is one of India’s largest and top power generation and sale companies, with its well-established hydroelectric, thermal, and cycle power stations. Today, NTPC plays a core part in the power generation sector by emphasising thermal power, which serves the overall purpose of creating complete energy security in India.
- Adani Green Energy
Adani Green Energy Corporation, developed by the Adani Group, is one of the worldwide leaders in electrical energy suppliers. The company concentrates on wind and solar power, projected with its installed base operating, to create renewable energy assets.
- Power Grid Corporation of India
Power Grid Corporation of India has a place among the largest electric power transmission facilities in the country. They are known for coordinating, planning, managing, and supervising interstate power transmission systems. The company plays a crucial role in ensuring safe and efficient electricity transportation takes place throughout the country.
- IOCL
IOCL (Indian Oil Corporation Ltd) is one among the prominent oil companies in India holding a strong franchise base in terms of oil retaining, oil refining, and distribution. The company has been making an attractive dominance in refining its business and is known for providing valuable dividend yield and returns to its investors.
- Adani Power
Adani Power is among the largest private thermal power producers in India. Its major vision is to create a transformative force in power generation that will further empower lives and contribute to sustainable and stable energy creation. The company has consistently dominated the energy sector stocks with its reliable and affordable power resources.
- Tata Power
Tata Power, integrated and known as one of the largest power companies in India, has a valuable power supply chain for both conventional and renewable energy. It provides distinct power services along with innovative customer solutions that include EV charging stations and solar rooftops.
- GAIL (India)
GAIL (India) Limited is a leading natural gas processing and distribution company. Its broad business units allow it to be involved in various subsectors: transmission services, liquid hydrocarbons, natural gas marketing, and more. Its overall transmission business is highly focused on LPG (Liquid Petroleum Gas) and natural gas.
- BPCL
BPCL (Bharat Petroleum Corporation Limited) is an integrated oil and gas company with a wide marketing, refining, and exploration footprint. The company has both domestic and external operations and supports the country’s general prosperity and development in the energy sector.
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Things you must have in mind before investing in energy stocks
Given the global shift toward renewable energy, investing in India’s best energy sector stocks can sound promising. Yet, investing in energy stocks of any size has its set of investment risks. Before investing in energy stocks of any size, you need to understand some factors that can highly influence their performance in real-time.
Government regulation
Most of the energy sector companies established in India get regulated by the government, which indeed affects the performance of the energy sector stocks. The government regulates this sector to ensure utmost safety is guaranteed for both the environment and the consumers. The Coal Gasification Committee was set up to manage and prioritise coal gasification projects. This particular move made the best and top energy sector stocks in India invest more in the latest technology to comply with the regulations. This kind of immediate investment shall reduce the profit levels of investors.
Weather conditions
Existing weather conditions can also affect the performance of India’s best energy sector stocks, especially those in the renewable energy sector. Extreme weather events like floods and hurricanes can influence the energy sector stocks, as they highly affect energy plants. Infrastructure damage and energy supply need a correction, and it can also be felt in the stock market.
Also Read: Best Financial Stocks To Invest In India in 2024
To wrap it up
In conclusion, the energy sector in India offers a wide variety of investment possibilities, from oil and gas companies to newly emerged green energy stocks. Given the current market risks, any size of investment in India’s best energy sector stocks offers potential high returns. As an investor, you will contribute to a sustainable future by picking energy stocks over others.
FAQs
- Which energy stock is best to buy now in India?
The ideal energy stock to invest in India varies based on factors such, as market capitalization earnings per share ratio, and ROI considerations. Reliance Industries stands out due to its energy range encompassed by petrochemicals and refining activities alongside investments in renewable energy sources. ONGC maintains a position in the oil and gas industry due to its cash flow and dividend distributions. For those seeking returns, in power generation sector investments NTPC is a dependable option.
- Which energy stock pays the highest dividend?
Among the Indian energy sector’s dividend yields, NTPC Ltd. is well-known for providing one of the highest. Over the past 12 months, NTPC Ltd. has announced an equity dividend of ₹8.00 per share. Dividend-seeking investors find the state-owned power-generating firm appealing since it regularly pays large payouts. Two more prominent high-dividend energy equities are Power Grid Corporation of India and Coal India. Both of these firms offer consistent income through monthly dividend payouts because of their solid market positions and steady earnings.
- What is the fastest-growing energy market?
Particularly solar and wind power, the renewable energy sector is India’s fastest-growing market for fuels. India is fast increasing its renewable capacity in line with the government’s drive for greener energy and ambitious targets under the National Action Plan on Climate Change. Driven by technology developments, rising investments, and sensible legislative frameworks, the sector is expanding faster than conventional fossil fuels. This expansion fits India’s will to reach net-zero emissions by 2070.
- Which energy is the future for India?
India’s energy scenario will be shaped going ahead by renewable energy, particularly solar energy. Given enough sunlight, India is capable of leading the planet in solar energy output. In India, renewables will define energy going forward. The government gives obtaining 500 GW of non-fossil fuel capacity by 2030 a top priority. Investment in technology innovation is much supported. Helping India satisfy its energy needs would depend much on solar and wind power.
- Which is the largest energy company in India?
Among India’s energy companies, Reliance Industries is the biggest. It runs operations in several fields, including refining, petrochemicals, oil and gas exploration, and renewable energy. Through its creative and sustainable energy solutions, Reliance Industries plays an important part in India’s energy industry, so supporting both domestic energy demands and worldwide markets.
