Best Green Hydrogen Stocks in India 2024

Green hydrogen is a clean source of energy that is taking center stage, as India is on a quest for energy self-reliance. It is called green hydrogen because it is produced through water electrolysis, using renewable energy sources. This process generates no polluting emissions.

India has set ambitious goals of reducing its reliance on foreign energy by 2047 and achieving net-zero emissions by 2070. The country is currently taking steps to embrace green hydrogen energy technologies. So, as a good investor, investing in green hydrogen stocks will give you an excellent opportunity to be part of the journey. 

In this article, we will discuss the best green energy stocks in India, provide an industry overview, and explain how to invest in them. So let’s get started

List of Best Green Hydrogen Stocks in India 2024

Best Green Hydrogen Stocks - Overview

1) Jindal Stainless Ltd

Jindal Stainless Ltd is one of the leading manufacturers of stainless steel products. They have a wide range of sheets, coils, and plates used in different industries like automotive, construction, and consumer goods. The company is focused mainly on sustainability and innovation. 

Jindal Stainless just started Haryana's premier green hydrogen project in Hisar. They aim to chop down annual carbon emissions by 2,700 metric tonnes - summing up to 54,000 tonnes over two decades, all while saving water with smart floating solar panels. As of 31st July, they were sitting pretty with a market cap of Rs 60,975 crore, having revved their revenues by 25.08% each year for the last five years. That’s leagues beyond the industry average of 13.9%.

Key Metrics:

• Market Cap (As of July 10, 2024): Rs 60,975 crore

• Return on Capital Employed (ROCE): 22.3%

• Annual Revenue Growth (Last 5 Years): 25.08%

• Industry Average Growth: 13.9%

• Additional Info: Market share increased from 2.57% to 4.52%

2) Oil and Natural Gas Corporation Ltd (ONGC)

The ONGC is a major player in India's energy sector. They produce around 71% of the country's oil and natural gas. The company is heavily involved in onshore and offshore exploration and production activities. Their plan is to annually put about Rs 850 billion into 2 million tonnes of green ammonia by 2035. They want to achieve their net-zero carbon emission goal by 2038, and the plan is to invest Rs 2 lakh crore to set up green hydrogen plants and cut gas flaring to zero. Their market cap was about Rs 4,20,433 crore as of July 2024.

Key Metrics:

• Market Cap (As of July 10, 2024): Rs 4,20,433 crore

• Return on Capital Employed (ROCE): 18.4%

• Additional Info: Produces about 71% of India's domestic output

3) Reliance Industries Ltd

Reliance Industries Ltd is a diversified conglomerate with interests in petrochemicals, refining, oil, telecommunications, and retail. They have consistently pushed the boundaries of innovation and business transformation. For instance, they plan to convert about 5,000 ICE trucks to run on green hydrogen this year.

Reliance is changing the game. Under Mukesh Ambani’s leadership, they pledge to switch from grey to green hydrogen by 2025. They even rolled out India’s maiden hydrogen-powered truck in cahoots with Ashok Leyland. Their towering market cap as of July was Rs 20,37,085 crore.

Key Metrics:

• Market Cap (As of July 10, 2024): Rs 20,37,085 crore

• Return on Capital Employed (ROCE): 9.99%

4) Indian Oil Corporation Ltd (IOCL)

IOCL is one of the leading players in India's oil refining and marketing sector. They operate a vast network of refineries and pipelines across the country. The company is dedicated to sustainable energy practices and innovation, and it plans for green hydrogen to be 50% of its overall output in five to ten years and 100% by 2040.

IOCL’s free cash flow has grown by 5.27% in the last five years, drastically outshining the industry average drop of -67.93%. Lastly, as of July 2024, their market cap was Rs 2,56,541 crore.

Key Metrics:

• Market Cap (As of July 10, 2024): Rs 2,56,541 crore

• Return on Capital Employed (ROCE): 21.1%

• Industry Cash Flow Growth: -67.93%

• Free Cash Flow Growth: 5.27%

5) NTPC Ltd

NTPC Ltd is the largest energy conglomerate in India. They primarily generate and sell electricity to state utilities. The company is committed to ensuring that there is a reliable power supply and sustainable energy practices. They already have 3.4 GW of renewable energy capacity in India. However, the company is targeting 60 GW of renewable energy by 2032. They already have a project pipeline of about 22 GW of renewable energy.

As of July, their market valuation clinches at Rs 4,03,381 crore. The stock has a fundamental score of 7.11 and, over the past five years, has boasted revenue growth at an annual rhythm of 13.79%, which is more than the industry average. Their market share also increased from 63.03% to 65.96%.

Key Metrics:

• Market Cap (As of July 10, 2024): Rs 4,03,381 crore

• Return on Capital Employed (ROCE): 10.4%

• Annual Revenue Growth (Last 5 Years): 13.79%

• Industry Average Growth: 12.11%

• Additional Info: Market share increased from 63.03% to 65.96%

What is Green Hydrogen?

Green hydrogen is created by splitting water (H2O) into hydrogen and oxygen through a process called electrolysis. It is powered by renewable energy sources like wind and solar. Unlike traditional methods, the production of green hydrogen doesn’t rely on fossil fuels, which makes it a cleaner alternative.

Green Hydrogen Industry in India

India has taken a bold step with the National Green Hydrogen Mission launched in 2022, aiming to achieve an annual production of 5 million metric tons of green hydrogen. To make it even better, they came up with plans to add 125 gigawatts capacity of renewable energy. Additionally, India's Union Budget for the fiscal year 2024-25 allocated about Rs 600 crore to fuel these initiatives, which is higher than the previous budget of Rs 297 crore.

With the government's strong push for the mission, the green energy sector is thriving in India. Many companies are investing heavily in green hydrogen technologies and infrastructure, recognizing its potential to revolutionize the energy sector. Here are some of the benefits driving companies to invest in this promising field:

Environmental Benefits

• It helps significantly reduce carbon emissions. Adopting green hydrogen could save around 830 million tonnes of CO2 yearly.

• India’s goal is to have net-zero emissions by 2070. This is to help them enhance environmental sustainability.

Economic Benefits

• With green hydrogen, the dependency on imported fossil fuels will be reduced, and this will promote energy independence.

• It has opened up (and will still bring more) new job opportunities in renewable energy sectors, boosting economic growth.

With all the positivity surrounding this initiative and the fact that the government is actively pushing it, it is the right time to invest in green hydrogen stocks in India.

Things to Consider Before Investing in Green Hydrogen Stocks

Now that we've discussed the industry overview, let’s discuss the factors to analyze before investing in the best green hydrogen stocks in India:

Market Potential

The level of government backing, such as grants, tax laws and other variables impacting the hydrogen industry should be evaluated.

Company Fundamentals

You should analyse the company’s financial position, and whether the firm can generate good revenues and profits through their operations.

Supply Chain Management

Analyze the accessibility and origins of hydrogen production considering that any disruption in this would affect the company’s potential for growth.

Global Energy Transitions

Understand the long-term adaptability of hydrogen energy by the global nations. Hydrogen energy will be subject to risks if other renewable energy sources gain popularity.

Risk Factors

Changes in environmental regulations, carbon emissions and other policies could affect the overall profitability of the hydrogen companies.

How to Invest in the Green Hydrogen Stocks in India?

Now that we’ve explored the factors to consider before investing, let’s review the steps for investing in top hydrogen stocks:

1. One must research and find the Best Green Hydrogen stocks in the market

2. Evaluate and assess your risk appetite and fix your financial goals

3. Shortlist the stocks based on your fundamental and technical analysis

4. Open Demat account and trading account through a trusted stockbroker

5. Invest in the shortlisted stocks and monitor them regularly

Conclusion

In this article, we discussed the best green hydrogen stocks in India. These companies are making waves with their bold carbon-cutting project and growth in market cap. Many top companies are investing a lot in green ammonia, while others are aiming to achieve a hydrogen-fueled future. They have a very good cash flow growth with great market value. These are promising companies as they are performing with tangible, measurable growth and initiatives. 

You'll find many more green hydrogen stocks on the Rupeezy’s trading app, each brimming with potential. Check it out and choose wisely because these stocks could fuel your portfolio's growth just as they fuel India's energy revolution.