Best Green Energy Stocks in India 2024

In recent years, green energy stocks have attracted the interest of investors due to changes in government policies aimed at the sector and their strong performance. The government has taken various measures and rolled out several initiatives that highlight its commitment to a greener future. This shift from traditional power generation to green energy is also likely to provide investors with great investment opportunities in the stock market. In this article, we will be taking a look at the top green energy stocks in India. Keep reading to find out!

What are the Prospects for Green Energy in India? 

Did you know that India ranks as the seventh largest energy-producing and generating country in the world? On the other hand, India is also the fifth-largest oil and seventh-largest gas importer globally. This is further expected to increase considering that the country’s energy demand for the next ten years is projected to be among the highest in the world.   

According to the Planning Commission, the country’s energy requirements are expected to grow from 5.6% to 6.4% p.a in the coming years. The share of oil imports is also expected to increase to 90% of the demand by 2030 from the current level of 73%. 

Luckily, India’s environment also provides other environment-friendly alternatives that have the potential to meet the future energy needs of the country. The government has particularly been interested in the green energy sector. This is because the sector growth would mean India would not have to rely on imports to fulfill its energy requirements. This would not only benefit the country environmentally but also economically. The last year’s budget has clearly shown the government’s focus on the green energy sector.

Let’s discuss a list of green energy stocks in India, including their prices and other essential details.

List of 5 Best Energy Stocks in India

Green Energy Stocks in India - Overview

1. NTPC Ltd.

NTPC is an Indian public-sector undertaking company that generates and sells bulk power (energy) to state power utilities. The company has also shown a special focus on green energy through its subsidiary NTPC Green Energy. 

The company currently plans a capital expenditure of 10,0000 Cr. on renewable energy this year and will further increase this to Rs.15,000 to 20,000 Cr. next year. Furthermore, NTPC also plans to list its green energy subsidiary in the Indian stock market through an IPO in the financial year 2025. Let’s have a closer look at its financials.

The market cap of NTPC currently stands at ?3,39,917 Cr. which makes it the largest company in the power sector that has a special focus on green energy. The company’s price-to-earnings (PE) ratio currently stands at 17.4. This is lower than the industry PE ratio which is currently at 24, this shows that the stock is currently trading cheaper in comparison to its peers in the industry. 

If we take a look at the profits of the company over the last few years, the company’s total sales have increased from Rs.100,287 Cr. in 2019 to Rs.176,207 Cr. in 2023 with an annual growth rate of 15%. The company’s profits for the same period have increased from Rs.14,034 Cr. to Rs.17,121 Cr. for the same period with an annual growth rate of 9%. Considering the capital intensity of the sector NTPC has managed to have a healthy debt-to-equity ratio of 1.45. 

2. Adani Green Energy Ltd.

Adani Green Energy Ltd. (AGEL) is a part of the Adani Group and is engaged in renewable power generation and other ancillary activities. AGEL develops, builds, owns, operates and utilises utility-connected solar power, wind power and hybrid projects. It currently has its presence across 91 locations in India.

The company has set up big goals for its renewable energy development. Adani Green Energy is India’s largest renewable energy company and is the world’s 2nd largest solar PV developer in the world. The company is currently in plans to develop a 30 GW renewable energy park in Khavda, Gujarat. This is expected to power 16.1 million homes each year. The company already produces 7,393 MW through solar, 1,401 MW through wind, and 2,140 using hybrid sources through its various locations in India. Now let’s have a closer look at its financials.

AGEL currently has a market cap of Rs.282,465 Cr. Its PE ratio however has been a point of concern as it currently stands at 172 which is significantly higher than the industry PE which is currently 24. 

If we take a look at the sales, they have grown from Rs.2,058 Cr. in 2019 to Rs.7,792 Cr. in 2023. This shows that its revenues have grown impressively at an annual growth rate of 39%. Its profitability for the same period has grown from a loss of Rs.475 Cr. in 2019 to Rs.973 Cr. in 2023 giving a CAGR of 61% for the same period. The company’s debt is considerably high and its debt-to-equity ratio currently stands at 7.23. 

3. Tata Power Ltd. 

Tata Power is an India-based power generation, transmission, and distribution company. Its current power generation sources include a mix of both thermal and hydro. 

The company along with its subsidiaries and joint entities has a power generation capacity of 14,690 MW. Out of the total electricity generated 39% comes from clean energy sources. Furthermore, the company has set goals to increase the contribution of its clean and green energy portfolio to 60% of its total generation capacity. Off late the company has also taken steps to aid the consumption of greener energy in the EV sector by targetting the installation of more than 1 lakh EV chargers by 2025.

Tata Power currently has a market cap of Rs.1.36 lakh Cr., making it one of the largest power generation companies in India. The company is currently trading at a PE of 42 which is higher than the industry PE of 24. If we take a look at the sales of the company has increased from Rs.29,881 Cr. in 2019 to Rs.55,109 Cr. in 2023 giving it a compounded sales growth of 13% over 5 years. Its profits for the same period have increased from Rs.2,606 Cr. to Rs.3,810 Cr. at a growth rate of 8%. The company has a healthy debt-to-equity ratio of 1.74. 

4. JSW Energy Ltd. 

JSW Energy is one of India’s largest power producers and the company is also involved in the trading and transmission of power. The company also has set bright goals for the future through its plans to transition towards green energy. 

The company currently has a power generation capacity of 6,677 MW out of which 60% comes from renewable energy sources like hydropower, wind and solar. The company is not only strengthening its position in the renewable energy generation space but also in the power storage segment. The company’s has emerged as the winning bidder for several energy storage tenders for manufacturing of solar components. In addition to this, the company is currently in plans to set up India’s largest commercial-scale green hydrogen facility in India.

JSW Energy currently has a market cap of Rs.1.11 lakh Cr. The company is currently trading at a PE of 68 which is higher in comparison to its industry PE of 24. If we take a look at the sales of the company they have grown from 9,138 Cr. in 2019 to Rs.10,332 Cr. which gives a compounded sales growth of 3%. Its profits on the other hand show a brighter picture and have increased from Rs.684 Cr to Rs.1,480 Cr showing a growth rate of 17% per annum. The company has a healthy debt-to-equity ratio at 1.41. 

5. Waaree Renewable Technology Ltd. 

Waaree Renewables Technologies business focuses on using renewable energy to generate power. The company is mainly focused on using solar energy to generate power and also provides several solar products and solutions. Waaree Renewables is also India’s largest solar panel manufacturer.

The company has a market cap of Rs.27,100 Cr. The stock however is trading at a PE of 256 which is considerably higher in comparison to the rest of the industry. The company’s sales have increased from Rs.7 Cr. in 2019 to Rs.351 Cr. in 2023 at a growth rate that exceeds 100%. Its profits on the other hand have grown from a loss of Rs.2 Cr. to a profit of Rs.55 Cr. The company’s debt to equity currently stands at 0.34 which is healthy for the company. 

Conclusion

The green energy sector provides several investment opportunities to investors. The top companies that we just took a look at were compiled based on market capitalisation which gave us the largest companies in the green energy space. Some companies that did not make it to the above list but are still playing an important role in India’s green energy story include Sterling and Wilson Renewables Ltd, Olectra Greentech Ltd. and Borosil Renewables Ltd among many others. You’ll find many more green energy stocks on the Rupeezy app which will make your investment journey a lot easier. Happy Investing!