Renewable Energy Stocks in India 2023

Last Updated on Sep 25, 2023 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 Union Budget 2023-2024, the budget for the Ministry of New and Renewable Energy has been increased by ~48%, i.e. Rs. 10,222 cr. from the revised previous year’s estimated budget of Rs. 7,033 cr. So it’s natural for you to be interested in riding the wave and locking in attractive returns given by the top renewable energy stocks in India.

In this article, we discuss the overview of the country’s green energy sector, challenges, prospects, and a list of renewable energy stocks in India.

Renewable energy stocks based on market capitalisation

Note: The data is as of 25th September 2023. The above list of renewable energy companies in India 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

Renewable energy stocks with highest 1Y return

Note: The data is as of 25th September 2023. The above list of renewable energy companies in India was made using Tickertape’s Stock Screener using the following filters:

• Category: Renewable Energy and Renewable Energy Equipment & Services
• 1Y return – Sort from highest to lowest

Renewable energy stocks with lowest total debt

Note: The data is as of 25th September 2023. The above list of renewable energy companies in India was made using Tickertape’s Stock Screener using the following filters:

• Category: Renewable Energy and Renewable Energy Equipment & Services
• Total debt – Sort from lowest to highest

List of renewable energy penny stocks

Note: The data is as of 25th September 2023. The above list of renewable energy companies in India was made using Tickertape’s Stock Screener using the following filters:

• Category: Renewable Energy and Renewable Energy Equipment & Services
• Close price – Set under Rs. 10

Renewable energy stocks with highest net income (Q)

Note: The data is as of 25th September 2023. The above list of 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

Note that the list is not sorted in any preferred order but is a table of stocks discovered based on the parameters. Past performance is not indicative of future returns. Do not take this as stock recommendations.

Why has renewable energy been in focus?

Given the alarming rate of climate change and escalating environmental concerns, countries across the globe are gradually shifting from fossil fuels to renewable sources to meet their energy needs.

What are green energy stocks?

Green energy stocks are companies involved in developing alternative technologies to replace fossil fuels with renewable resources like wind, solar, and hydroelectric. Renewable energy also includes supplementary technologies that will be instrumental in green energy transformation.

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.

Overview of the renewable sector in India

As per Invest India, India stands 4th globally in Renewable Energy Installed Capacity (including Large Hydro), Wind Power capacity and Solar Power capacity.

Prime Minister Narendra Modi mentioned in June 2021 that India’s renewable energy capacity grew by 250% from 2014 to 2021. Besides, the share of renewable energy itself increased from 21% in 2012 to 42.5% in February 2023. As of the same period, renewable energy sources, including large hydropower, have a combined installed capacity of 174.53 GW. India saw the highest year-on-year growth in renewable energy additions of 9.83% in 2022. 

India was the second-largest market in Asia for new solar PV capacity and third globally. The installed solar energy capacity has increased by 24.4 times in the last 9 yrs and stands at 63.3 GW as of February 2023. The installed renewable energy capacity (including large hydro) has seen an increase of around 128 % since 2014. 

S&P Greenex – tracking Indian renewable energy stocks

The Indian stock exchange tracks the performance of green energy stocks via the S&P Greenx benchmark index. This index reflects the performance of the top 25 green energy stocks in India based on liquidity and market capitalisation. In the last 5-yr, the S&P Greenx index gave a 61.62% return on its investment.

Are renewable energy stocks financially strong?

From the above table, you can observe that renewable energy share prices have increased manifold and generated handsome wealth for their investors over the last 5 yrs.

However, most of them have considerable debt, including big names like Adani, SJVN, and NHPC. Further, the net income has only been attractive for NHPC and SJVN. Then again, remember that both these renewable energy companies in India have considerable debt on them.

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.

So should you even invest in the clean energy sector?

With fossil fuels draining out and the current cost of producing energy using them soaring higher, coupled with environmental concerns, the future is screaming ‘green energy’. Therefore, renewable energy will be the way of life in the future.

Renewable energy is a relatively novel sector. For any sector to mature and become profitable, it takes effort, time, R&D, trial and error, and massive investments. Clean energy is in the initial stage, where companies are betting high on R&D and testing new technologies that can potentially make the transformation to non-conventional energy swifter and more efficient. Therefore, while the companies may not have solid financials now, with progress and greater efficiencies, they would also strengthen their financials over the years. Therefore, it is best to have a long-term horizon when investing in this clean energy sector.      

Why invest in renewable energy stocks in India?

While the industry has been developing slowly, given the rapid rate of climate change, faster development of the green energy sector is the need of the hour. Following are a few reasons why the prospects for the renewable energy sector look greener:

Green energy is the future and has a huge scope

The Central Electricity Authority has estimated that the country’s power requirement is likely to reach 817 GW in 2030, driven mostly by the transport and real estate sectors.

India aims to meet 50% of its total energy requirement from renewable energy sources and cut its carbon emission by 45% by 2030. With such massive scope for green energy transformation, the prospects for the renewable energy sector have never looked greener.

Clean energy sector attracting significant investments from foreign investors

As per Bloomberg New Energy Finance, in 2022, Global investment in the low-carbon energy transition totalled $1.1 tn, increased by 30% year-on-year, with investment in renewable energy up 17% and investment in electrified transport up more than 54%. But to fuel the global effort to reduce the total carbon emission to zero, investments of over $2 tn dollars will be required by 2025 and about $4.1 bn by 2030. 

Renewable energy remained the largest sector in investment terms, achieving a new record of $495 bn committed in 2022, up 17% from the year prior. Increasing foreign investment in the industry would support its development and also attract more domestic investments.

Government going full throttle to support renewable energy sector

In the Union Budget 2023-2024, the government earmarked Rs. 19,700 cr. for the recently launched National Green Hydrogen Mission to facilitate the transition of the economy to low carbon intensity and reduce dependence on fossil fuel imports. 

In line with the announcement made in the Union Budget 2023-24, the Ministry of Power has formulated a Scheme on Viability Gap Funding for the development of Battery Energy Storage Systems with a capacity of 4,000 MWh.

To help accelerate clean energy innovation, India also launched the Mission Innovation CleanTech Exchange last year. This is a global initiative to accelerate action and investments in R&D and campaigns to make clean energy affordable, accessible, and attractive to everyone within the next decade.

The government has also allowed 100% FDI under the automatic route and introduced green bonds to support climate and environmental projects. Not only that, but it has also signed power purchase agreements aiming at renewable energy.

Companies investing massively to aid renewable energy transformation

While the government is doing its part, companies have also been investing significant funds in the sector to accelerate progress and meet India’s target of reaching net zero emissions by 2070.

Big names like Reliance Industries, Adani Group, Tata Group, and JSW are making the most of this crisis cum opportunity. Together, they are looking to invest over Rs. 4 lakh cr. in the next 5-10 yrs in the green energy sector.

Reliance Industries aims to make India the most affordable destination for green energy globally within the decade. To enjoy swift success, it looks to mirror its telecom strategy in the green energy sector and plans to invest Rs. 75,000 cr. by 2024. Adani Group, on the other hand, wants to become the world’s largest renewable power-generating company by 2030. To achieve this, they are considering an investment of over ₹1.5 lakh cr. in the sector over the next decade.

Tata Power is not far behind, having planned investment of ₹75,000 cr. in the next 5 yrs. Finally, JSW Energy Ltd plans to invest ₹75,000 cr. by March 2030 and aims to become carbon neutral by 2050.

Prime Minister Narendra Modi has also mentioned that India’s potential in green energy is no less than a goldmine. Addressing a webinar on various announcements made in the Union Budget 2023-24 on green growth, he said, “India will play an important role in green energy, I invite all stakeholders to invest in India.”

Challenges to the green energy sector

Currently, India is heavily dependent on thermal energy for our needs. In FY 2022-2023, about 75% of our power consumption and generation was coal-based. The reasons for such heavy dependence on thermal energy are the wide availability of fossil fuels like coal, attractive prices, and security. Therefore, the dependency on coal and other fossil fuels cannot be reduced overnight.

Apart from the production of renewable energy, maintenance, distribution, and storage also seems to be far from optimised.

For one, green energy sources like solar and wind energy are only available for use when the sun is shining, and the wind is blowing. While the sun only shines during the daytime, the availability of ample wind is seasonal and depends heavily on geographical factors and climatic conditions. This indicates that the supply of clean energy is not uniform.

Looking at the demand side, in India, energy requirements are relatively higher in the evening. Therefore, bridging such a huge demand-supply gap is still an issue.

An ideal solution to this problem is ample, efficient storage of energy in batteries. However, this method is not cost-efficient as yet. But with the advancement of technology and better infrastructure, batteries as storage means of renewable energy can become a sustainable option for green energy transformation.

The prospects of this happening are bright, as per AK Saxena, Senior Director, Electricity & Fuels Division at TERI (a not-for-profit research organisation specialising in energy, environment, and sustainable development). He opines that despite these challenges, by 2030, 42% of India’s energy could come from renewable sources.

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.

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Anjali Chourasiya

I am a finance enthusiast who loves exploring the world of money through my lens. I’ve been dedicated to building systems that work and curating content that helps people learn.

As an insatiable reader and learner, I’ve spent the last two years exploring the world of finance. With my creative mind and curious spirit, I love making complex finance topics easy and fun for everyone to understand. Join me on my journey as we navigate the world of finance together!

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