Top 6 Green Energy Stocks in India for 2024
Created on 01 Mar 2022
Wraps up in 9 Min
Read by 96.9k people
Updated on 04 Jan 2024
The Indian Economy is primarily driven by non-renewable fossil fuels. Despite having an abundant source of green energy at our disposal, the usage of these sustainable sources has not been very immediate.
The recent decision to achieve a 10% ethanol infusion in petrol, as well as increasing said infusion to 20% by the year 2030, shows that the government is aware of the issue this poses and wants to change the same.
But reducing petrol usage will not quite solve the problem posed by fossil fuels. From an ecological perspective, they cause an increment in the carbon emissions of the country. From an economic point of view, India’s inability to domestically produce petrol makes it dependent on imports, which also takes away its ability to set the fuel price.
The solution to this problem is a shift to alternate, green energy. Often described the same as renewable energy, green energy comes with a major difference. On top of being renewable, green energy cause no/negligible harm to the environment.
This can be explained via the example of burning wood for renewable energy. Although wood can be grown, they also contribute towards the rise in pollution. Thus, not all renewable energy falls under the category of green energy.
The government is not unaware of the plan to improve the usage of green energy and is actively trying to make its power production domestic and, thus, more feasible.
Again, from an ecological perspective, the government aims to achieve net-zero carbon emissions by 2070. Towards the same direction, the organisations engaged in the production of renewable energy have increased the total capacity by 250% from 2014 to end 2023.
List of Green Energy Stocks in India
Well, before we pick winners, let’s meet some of the competitors. These are some of the major companies participating in the green/renewable energy race.
- Adani Green Energy Pvt Ltd
- Gita Renewable Energy Ltd.
- SJVN Ltd.
- JSW Energy Ltd.
- Borosil Renewables Ltd.
- Waaree Renewable Technologies Pvt Ltd
- KPI Green Energy Ltd.
- GAIL India
- Indian Oil Corporation Ltd
- NTPC Ltd
- ReNew Power
To know which of these companies are the real “powerhouses”, read on and find the Top 6 Green Energy stocks.
What are Green Energy Stocks?
To better understand the need for green energy, we must first understand its counterpart. Fossil fuels are made from dead organic matter found in the earth’s crust. This organic matter is rich in carbon and hydrogen and releases energy when burned.
Fossil fuels are comprised of coal, oil and natural gas. They are the most prevalent fossil fuels due to their abundance, efficiency, and relatively cleaner burning. But these benefits come at a cost. Although natural gas is the cleanest fossil fuel, when burned at massive rates like the present, the cumulative release of pollutants mitigates this benefit. Coal and oil already have the “unclean” tag on them, which means they release the most contaminants among all fossil fuels.
Fossil fuels are also non-renewable, which means that although they occur naturally in the planet’s crust, the rate at which they are replenished is less than the rate at which they are consumed.
Thus, to serve as a solution on these two troubled fronts, green energy was discovered or, rather, popularised; to shift the world’s need from the current sources of energy. Green energy is an umbrella term that comprises all the sources of energy that have little-to-negligible emissions and are renewable. Solar, wind, hydroelectric and geothermal are the most common sources of green energy.
Future Prospects of Green Energy Stocks in 2024
According to the Central Electricity Authority, India’s power requirement is projected to reach 817 GW by the year 2030. To put this in perspective, India’s highest power demand for 2022 was recorded on 9th June at 210 GW. The Government of India also aims to achieve a target of fulfilling 50% of this demand through renewable energy sources.
The Indian Government has also planned to increase the renewable energy production capacity to 500 GW by 2030 to fulfil the above-mentioned demand. For reference, the renewable energy production capacity was around 10 GW in 2005, which was increased to around 100 GW by December 2021. That’s growth by a whopping 16.6% CAGR in 16 years.
This opens up a huge opportunity for organisations to capitalise on. Various companies have been created anew or as subsidiaries of existing corporations to profit from this rising need for alternative energy.
Not only is profit the incentive for this switch, but owing to the ill effects of fossil fuels, various governments are also pushing for the switch from non-renewable to renewable energy sources.
For instance, the Indian Government allocated ₹19,500 crore for a Production Linked Incentive scheme in order to boost the production of high-efficiency solar modules.
“Go Green” is not just a domestic movement anymore, either. The alternate/non-conventional energy sector has received an inflow of $11.62 billion from April 2000 to March 2022. India is still seen as a potential player in the renewable energy market as the rulers of UAE committed to invest $75 billion to establish a partnership in clean energy.
Investing in green energy stocks can be a way to:
- Support the transition to a sustainable future. 🔄
- Potentially benefit from the growing demand for renewable energy. 💰
- Diversify your investment portfolio. ✖️
Plus, you would be giving a thumbs up to the new and clean era with a healthy and sustainable environment.
Amidst hundreds of such companies existing and thriving, finding the right stock to add to one’s portfolio can be difficult. The stocks included in this list are chosen not only for their financials but also for their future plans and growth prospects.
The ESG, i.e., Environmental, Social, and Governance ratings, also played a major role in selecting these stocks.
Let’s check out which stocks made up the Green Energy Stocks list for 2024. This year, we are bringing the stocks with a slight twist. You see, many investors prefer to invest only in large-cap or mid-cap companies. On the other hand, there are some who don't touch a large-cap stock throughout their investment journey.
Based on your preference, we have some good options for Green Energy stock for you.
Large-Cap Green Energy Stocks:
For companies with a market capitalisation of ₹50,000 crore and more, here are some of the promising options:
Adani Green Energy Ltd. (AGEL)
AGEL is a leading Indian renewable energy company developing and operating utility-scale grid-connected solar and wind farm projects nationwide. It is also the largest renewable energy player in India, boasting aggressive expansion plans and strong financial performance.
With a revenue growth of 82.89% for the past 3 years, Adani Green Energy has been a regular in the list of top green energy stocks. It also has a CRISIL AA rating with a ‘Stable’ status as per ESG.
Gautam Adani’s plan to invest ₹9,350 crore in Adani Green Energy to fund capex plans and reduce debt has also aired the possibilities of a promising year.
Here are the Company Essentials with the most-reviewing financial figures from Ticker by Finology: ⬇️
Founded in 2015, Adani Green has rapidly grown to play a key role in the country's transition to a clean energy future.
Established in 1975, NTPC has been the backbone of India's power sector, operating a diverse portfolio of coal, gas, hydropower, and renewable energy projects.
The largest power utility in India, NTPC Ltd., is increasing its focus on renewables. With a “CRISIL AAA” rating, NTPC Ltd. maintains a 'Stable' status as per the ESG rating.
NTPC Ltd. is planning a 1500 TW solar power generation project for 2024 in addition to its ongoing 800 MW solar projects. It is also focusing on various wind projects for 1200 TW, 1110 TW, 1000 MW, and 1080 MW, among others.
Take a look at the company’s financials portraying its significance in the energy sector:
NTPC has a reputation for providing reliable and affordable electricity to over 85% of the country's population, ensuring energy security and promoting sustainable development in India.
Mid-Cap Green Energy Stocks:
For the companies with market capitalisation in the range of ₹10,000 to ₹50,000 crore, here are the best 2 options:
The main strengths of SJVN Ltd. are its strong focus on hydropower and healthy dividend payout. A leading Indian hydropower company, SJVN Ltd. is generating clean and renewable electricity from projects across the Himalayas and beyond.
Incorporated in 1988, SJVN plays a significant role in India's hydropower sector, operating and developing large-scale projects with a focus on sustainability.
SJVN recently bagged a 100 MW solar project, which boosted its share price and made it a good choice among its fellow mid-cap peers.
Take a peek at its essential figures and fundamentals from the below image:
The company has maintained effective average operating margins of 75.86% in the last 5 years. When seen from ESG POV, a rating of CRISIL AA+ and a ‘Stable’ status gives the stock a solid standing.
JSW Energy Ltd.
Diversified power company with ambitious renewable energy targets and attractive valuations, but execution risk remains. A diversified Indian power company, JSW Energy generates, transmits, and trades electricity through a mix of thermal, hydro, and solar power plants.
Part of the JSW Group, JSW Energy is a key player in India's energy sector, with a growing presence in renewable energy sources alongside its established thermal power generation.
Profitably, JSW Energy’s shares saw a significant rise with the commission of 51 MW wind power capacity by its wholly-owned steps-down subsidiary. This development took JSW Energy’s total current installed capacity to 6,822 MW.
Check out the Company Essentials and measure the stock to see whether it’s fit for your portfolio:
Small-Cap Green Energy Stocks:
With a market capitalisation of ₹10,000 crore and below, small-cap green energy stocks can also be a profitable investment. Here are 2 of my preferences for 2024:
KP Energy Ltd.
A leading Indian wind energy company, KP Energy provides turnkey solutions for wind farm development and operations across the country.
Established in 2010, KP Energy has carved a niche as a wind power EPC contractor, partnering with developers and investors to bring wind farms to life.
KP Energy received an order from Aditya Birla Renewable Energy Ltd. The development of a 23.1 MW wind capacity for the wind-solar hybrid project will be undertaken by KP Energy.
It’s one of the new additions to the Green Energy Stocks list when compared to 2023, and the fundamentals below will prove why:
From project development, engineering, procurement, and construction to operation and maintenance, KP Energy offers a comprehensive suite of services for the wind energy sector.
Borosil Renewables Ltd.
Leading the way in India's solar energy sector, Borosil Renewables is manufacturing high-performance solar glass for photovoltaic modules.
Part of the renowned Borosil Group, Borosil Renewables leverages its glass expertise to produce world-class solar glass, essential for efficient solar power generation.
A 25% rise in its consolidated net profit to ₹30.47 crore has played a significant role in making this company a valuable addition to the energy sector.
Take a look at the Consolidated Company Essentials, which provide an insight into the stock’s fundamentals:
Committed to promoting clean energy adoption and technological advancements, Borosil Renewables plays a crucial role in powering India's solar ambitions.
The Bottom Line
As time progresses, people’s needs and necessities will develop and change. If not for people’s needs, the available resources on the planet will fluctuate. Businesses need to change and grow accordingly to keep up with these changes. Not only will old businesses change, but new ones will also emerge to capitalise on these changes.
The efforts by the various players in the industry are not in vain either, as India ranks 4th in overall renewable energy capacity as well as wind power capacity. In terms of solar power capacity, India ranks 5th worldwide.
No wonder India is seen as a power hub when it comes to renewable energy. Even Ernst & Young’s Renewable Energy Country Attractive Index for the year 2021 ranks India in the 3rd position.
As an investor, staying aware of these developments to keep an eye out for shares with potential seems like a good idea.
Which shares do you think will benefit the most from this rising need for Green Energy? Tell us in the comments section below.
Until then, happy investing.
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