Renewable Energy Stocks in India – 2024

Last Updated on Mar 1, 2024 by Harshit Singh

Increasing environmental concerns, government support, and massive investments in the renewable energy sector in India are making it an attractive avenue for investors. Top conglomerates in the space are running at it in full swing, expanding assets and capacities to help achieve India’s 2030 target of reaching 500 GW installed capacity. In the Interim Budget 2024-2025, the government allocated Rs. 10,000 cr. for a grid-based solar power scheme, an increase from Rs. 4,757 cr. in 2023-24. Wind power funding was slightly raised to Rs. 930 cr. in 2024-25 from Rs. 916 cr. the previous year. 

In this article, we discuss the overview of the country’s best renewable energy stocks, challenges, prospects, and things to consider while investing in renewable energy stocks in India.

What are renewable energy stocks?

Renewable energy stocks are shares of companies involved in the production, technology, or services related to renewable energy sources like solar, wind, and hydroelectric power. These stocks represent investment in the transition to cleaner, sustainable energy alternatives to fossil fuels

Types of renewable energy stocks in India

1. Clean energy stocks

Shares of any company related to renewable energy can be a clean energy stock. This includes alternative transportation technologies.

2. Solar and wind energy stocks

As the name suggests, these are more focused and associated with solar and wind energy.

3. Hydroelectricity stocks

These are companies that use flowing water to generate energy. Currently, hydroelectricity is one of the most popular resources used and is only expected to rise over time.

List of renewable energy stocks in India

Note: The data is as of 29th February 2024. The above renewable energy share list was made using Tickertape’s Stock Screener using the following filters:

• Category: Renewable Energy and Renewable Energy Equipment & Services
• Market cap – Sort from highest to lowest

Top-performing renewable energy stocks

Note: The data is as of 29th February 2024. The above list of top renewable energy stocks in India was made using Tickertape’s Stock Screener using the following filters:

• Category: Renewable Energy and Renewable Energy Equipment & Services
• 1-yr Return – Sort from highest to lowest

Renewable energy companies with highest net income (Q)

Note: The data is as of 29th February 2024. The above list of best renewable energy companies in India was made using Tickertape’s Stock Screener using the following filters:

• Category: Renewable Energy and Renewable Energy Equipment & Services
• Net income (Q) – Sort from highest to lowest

High-dividend paying renewable energy companies in India

Note: The data is as of 29th February 2024. The above list of best renewable energy stocks in India was made using Tickertape’s Stock Screener using the following filters:

• Category: Renewable Energy and Renewable Energy Equipment & Services
• Dividend Yield – Sort from highest to lowest

Overview of the renewable sector in India

India’s renewable energy sector is experiencing rapid growth, making it a key player in the global clean energy transition. The country’s renewable electricity capacity is expanding faster than in any other major economy, with projections to double by 2026. India has already surpassed its COP21 commitment by achieving over 40% of its power capacity from non-fossil sources. It aims for 500 gigawatts of renewable energy capacity by 2030, supporting its goals to reduce emissions intensity by 45% and achieve net-zero emissions by 2070. This growth is driven by significant increases in solar and wind capacity, alongside ambitious plans for green hydrogen production.

Benefits of investing in renewable energy stocks

Investing in renewable energy stocks in India offers several compelling reasons:

1. Booming sector: Government initiatives are propelling the renewable energy sector, leading to significant growth and investment opportunities.
2. Government incentives: Incentives and subsidies from global governments make green energy stocks attractive investment avenues.
3. Eco-friendly: Investments in renewable energy contribute to a sustainable and environmentally friendly future.
4. Reducing carbon footprints: Aligns with India’s goal to reduce carbon emissions by one billion tonnes by 2030, supporting global climate change efforts.
5. Portfolio diversification: Renewable energy stocks can diversify investment portfolios, potentially reducing risk.
6. Rapid growth: India’s renewable energy sector is witnessing the highest Y-o-Y growth, with significant increases in solar and wind capacity.
7. Increasing demand: With India’s power requirement projected to grow significantly, renewable energy is poised to meet a substantial portion of this demand.
8. Rising investments: The sector has attracted significant foreign direct investment, indicating strong investor confidence and future growth potential.

These factors make renewable energy stocks in India an attractive option for investors looking to capitalise on the country’s shift towards sustainable energy solutions.

Challenges pertaining renewable energy sector in India

The challenges surrounding renewable energy in India include:

• Cost burden of legacy infrastructure: High transmission and distribution losses prevent decisive investments in renewables, keeping the energy sector reliant on coal.
• Financing the transition: The ambitious plan to add significant renewable capacity requires trillions of dollars, necessitating access to low-cost financing.
• Grid reliability: The massive increase in infirm power sources challenges grid stability, especially as India lacks a transition fuel like natural gas.
• Intermittency and variability: Renewable sources like solar and wind are not constant, leading to challenges in maintaining a stable energy supply.
• Location-specific potential: Optimal locations for renewable energy projects are often far from consumers or the grid, complicating transmission.
• Higher costs compared to fossil fuels: Despite falling prices, renewables can still be more expensive than traditional energy sources, impacting economic feasibility.
• Weak and unstable grid: India’s grid infrastructure struggles to handle the variability and intermittency of renewable energy, requiring significant upgrades.
• Lack of incentives for peaker plants: Without incentives for plants that can quickly ramp up or down, integrating a high percentage of renewables into the grid is challenging.

These challenges underscore the complexity of transitioning to renewable energy in India, necessitating innovative solutions and substantial investment.

Things to consider before investing in the best renewable energy stocks in India

1. Due to recent hype in the renewable energy sector, some stocks may be overvalued. So ensure to do a valuation analysis before buying. You can use valuation ratios and other tools explained in What Is the Intrinsic Value of a Stock and How To Calculate It?
2. Assess the debt position of these companies. Most of them, including Adani, SJVN, and NHPC, have considerable debt. Being funded by debt is not all that bad. However, a company should have ample cash flow to repay the debt and be on the greener side.
3. Since the renewable energy sector is relatively new, many companies may not be profitable, while some may have just started reporting profits. So making sure that the company is profitable can give you some respite. If profit is nil or low, assess their future plans and prospects. Can they become profitable by improving their operations, introducing new technology, and offering a new product line? If yes, are they capable of doing it? What are the management views, and what is their attitude? Gauge other supporting metrics and only then make a decision.

When you dig deeper into these stocks using Tickertape’s Stock Pages, you will notice trends in financial performance over the years. Be sure to go by them, collate news about the company operations and only make an investment decision.

Frequently asked questions (FAQs)

• Author
• Recent Posts

Harshit Singh

Content Strategist at Tickertape

Hey there, I’m Harshit Singh Mahey! With eight years of experience as a Content Strategist, I’ve had the pleasure of working with a Fortune 100 company and building three successful startups from the ground up.

As an investment fanatic, I’ve dabbled in early-stage startups, mutual funds, gold, stocks, smallcases, and real estate to identify which assets generate the highest ROI. At Tickertape, I’m dedicated to presenting my learning and providing insightful suggestions to help my readers make sound investment decision.

Latest posts by Harshit Singh (see all)

• Digital Gold vs Gold ETF vs SGB – Where to invest in 2024? - Apr 15, 2024
• Nifty 50 Stocks With 1-Month High Return - Apr 4, 2024
• Highest Return Stocks in Last 1 Year (Nifty 500) - Apr 4, 2024