10 Best Green Energy Stocks to Invest in India 2023

This guide explains all about green energy stocks in India. Green energy is gaining popularity in India. Many people make an effort to support environmental sustainability by making use of renewable energy and materials whenever possible. 

However, people don't just rely on green energy to power their homes and workplaces. They're putting money into it as well. This company can benefit from a wide variety of interventions.

Do you know what the popular way is? Investing in other businesses operating within the same market! Are you considering diversifying your holdings with green energy or renewable energy stocks?

It's easy to find a stock company that provides renewable and sustainable energy, as the country is home to many such enterprises. In India, which green energy and renewable energy stocks perform the best?

Let's investigate our greatest choices and learn more about renewable energy stocks in India.

What are green energy stocks?

It would be vital to familiarise oneself with renewable energy sources before investigating the top stock picks in this sector in India.

Green energy is replenished continuously by the environment. It's not like we're going to use it all up eventually.

Several distinct kinds of renewable energy sources are available in India. The sun, wind, rain, and tides are all examples of such natural phenomena. These are often replaced at least as quickly as they are consumed. 

Various instruments, technologies, and equipment are developing to collect and utilize energy from these resources.

Stocks in companies that produce or distribute clean energy are considered clean energy stocks. Several transportation options are included in this category.

Types of renewable energy stocks in India

1. Clean energy stocks

Clean energy stocks can be shares of any company that has something to do with clean energy. This includes different ways of getting around.

2. Stocks in solar and wind power

These are more focused and have to do with solar and wind energy, as the name suggests.

3. Stocks in hydroelectricity

These are companies that get their energy from moving water. Hydroelectricity is one of the most popular ways to get power, and this trend is only expected to grow.

List of top 10 renewable energy stocks to invest in India

If you want to take full advantage of the fluctuating energy prices on the market while the battle is going on, here is a list of the finest energy stocks in India that you can buy.

1. Reliance Industries

If you're looking for the largest firm in India, go no further than Reliance. Although it is a multinational corporation interested in exploration and production (E&P), refining, and oil-to-chemical (OTC) operations, it has diversified into many other areas. 

This company has gained additional revenue as refining margins increased and the price per barrel of Russian oil decreased. There are several green energy projects in the works, and Reliance's goal of carbon neutrality by 2035 is encouraging.

2. Coal India

Regarding coal production, India dominates the global stage with its company, Coal India. The company's headquarters are in Kolkata, and it engages in the mining and processing of coal. 

Thanks to diminishing ESG concerns, investors have warmed up to the government's massive coal corporation. It's positive for Coal India that the prolonged conflict between Russia and Ukraine has increased the difficulty of meeting global energy demands.

3. Indraprastha Gas (IGL)

Indraprastha Gas dominates natural gas distribution in India. Establishment date: 1998. Gas for both home use and vehicle use is distributed throughout the Delhi-National Capital Region (NCR). 

As gas must now be transferred to municipal gas distribution firms under the new domestic gas allocation rules, IGL should continue to see positive results. 

To improve India's long-term prospects, the government has announced plans to boost the percentage of natural gas in the country's energy mix from 6% to 15%.

4. ONGC

ONGC is a PSU whose primary activities include oil and gas exploration, production, and providing services relating to the oil and gas industry. 

It accounts for almost 71% of India's total oil output. The IEA predicts rising oil demand, which favors ONGC's expansion.

5. Tata Power 

Among the several renewable energy companies, Tata Power is by far the most prominent. Its renewable energy capacity is 2.6 GW across 11 states. 

Tata Power Renewable Energy, Tata Power Solar Systems (TPSSL), and Walwhan Renewable Energy are only a few of the company's renewable energy subsidies (WREL).

Tata Power has set a goal of generating 15 GW of renewable energy by 2025. The present percentage of clean energy in Tata Power's portfolio is 34%, but they want to grow this to 40% by 2025 and 80% by 2030. 

The corporation has halted the addition of coal-based capacity due to this. While producing renewable energy, they are also attempting to address some of the sector's most pressing issues.

We can see that the company's revenue increased from Rs. 26,840 cr in 2018 to Rs. However, it's concerning that the company's net profits have dropped from Rs. 2,408 cr to Rs. 1,741 cr within the same period.

6. JSW energy 

If you need electricity, this is one of the largest producers in the country. The combined capacity of the company's thermal, hydroelectric, and solar generating plants is 4.6 GW. 

This firm is currently constructing 2.4 GW of renewable energy projects. There are 2,218 wind and solar energy projects in this total.

Orders for them are anticipated during the next 18–24 months. Because of this, the percentage of renewable energy used by the company will increase from 30% to 55%.

Company leaders are also rethinking how they approach their clean energy operations. To accomplish this, billionaire entrepreneur Sajjan Jindal will strategically sell off assets in his company's green energy division.

After the reorganization, JSW Energy Neo will handle all renewable energy operations. That's great news since it will allow the firm to quickly close the gap between its main rivals: Tata Power and Adani Power.

In addition, the company is restructuring its clean energy operations. To accomplish this, billionaire entrepreneur Sajjan Jindal will strategically sell off assets in his company's green energy division.

7. Inox Wind

With regards to wind power, this is one of the leading manufacturers in India. Blades, tubular towers, nacelles, and so on are all examples of the standalone components the company offers for purchase.

Currently, the corporation operates three cutting-edge factories in Gujarat, Himachal Pradesh, and Madhya Pradesh.

 To date, Inox Wind has received one of the largest orders from a PSU. The wind farm being built by NTPC Renewable Energy will have a capacity of 150 MW. 

It is anticipated that by 2032, this project will contribute approximately half of the firm's overall power-producing capacity.

A deeper dive into the company's financials reveals a decline in revenue since 2017. Profits were Rs 3,405 in 2017 but are expected to drop to Rs 625 cr by 2022. The profit reflects this trend, falling from Rs. 303 cr in 2017 to a deficit each succeeding year.

The founders own 67.55% of the company, and 5.28% of that has been pledged. A debt of 0.94 is reasonable, given the company's financial situation.

The billionaire founder of Adani Group has made it plain that the firm intends to make a significant investment in renewable energy. 

Adani Power's thermal power station can produce 12,450 MW of electricity. In addition, the firm operates a 40MW solar facility.

8. Adani Green Energy Limited

Adani Solar's capacity is 3.5GW, and Adani Green Energy's capacity, including completed and planned projects, is estimated to be 25GW. Before that, the company spent $3.5 billion on SB Energy to acquire India's largest renewable energy sector.

Looking closely at Adani Green's finances reveals an upward trend in the company's revenue from Rs. 502 cr in 2017 to Rs. 5,133 cr in 2022. However, the company has been losing money since 2017 and expects that trend to continue through 2020.

However, the firm generated a profit of Rs. 489 cr. in FY22. The corporation's high debt-to-equity ratio (44.4) is a major warning sign. With a PE of 765, the stock is more expensive than its rivals.

9. NTPC

NTPC has made significant efforts to green its product lineup.

India, the world's largest power generator, has switched to renewable sources as demand mounts to reduce coal consumption due to its involvement in global warming and its negative impacts on the environment and people's health.

Three of the state-owned thermal power company's subsidiaries—NTPC Vidyut Vyapar Nigam (NVVN), North Eastern Electric Power Corporation (NEEPCO), and the one-year-old NTPC-Renewable Energy—are expected to be listed on stock exchanges shortly (NREL).

To provide renewable energy and other forms of energy, such as gas-based electricity, NTPC has partnered with IOC to produce and store this energy, primarily for use in IOC refineries and other installations.

The company also plans to produce green hydrogen commercially. For this purpose, the firm intends to construct a 4,750 MW renewable energy park in the Rann of Kutch. It has been determined that the plant can handle 5 MW.

Nevertheless, the stock's performance has been unremarkable. NTPC's stock has returned 28% in the last year, despite the market's overall rise. Over the past few months, the stock has lost about 9% of its value.

10. L&T

L&T and ReNew Power, a renewable energy manufacturer, formed a partnership last week to enter India's expanding green hydrogen market. Thus, L&T and ReNew have agreed to form a joint venture to create, own, and operate green hydrogen projects in India.

In its most recent annual report, L&T stated its goal of reaching zero emissions by 2040. 

Fortunately, if everyone switched to clean energy sources like solar, wind, hydroelectric power, green hydrogen, and biodiesel, we could solve this problem entirely. The construction of carbon sinks would address the remaining 10%.

Over several years, the corporation anticipates spending between Rs 10 billion and Rs 50 billion on its green projects.

Shares of L&T have risen steadily from the start of the year, except for a brief dip in March 2021. The share price increased 57% in the past year and 11% in the past three months.

Why should you invest in renewable energy stocks in India?

This investment should be considered for many different reasons, including:

1. Ethical investing 

Putting money into renewable energy sources is a smart move from a moral standpoint. Renewable energy sources are increasingly attractive as fossil fuels become increasingly scarce and the global need for energy continues to rise. 

Power generation, environmental protection, and global warming are areas where renewables may significantly impact.

2. The fast development of new technologies

Rapid technological development is being seen in this sector. All three factors—reliability, efficiency, and cost are improving concerning renewable resources. 

The United Kingdom has set a goal of obtaining 15% of its energy needs from greener sources by 2020. The National Climate Change Act also mandates that the government maintain a high level of climate change research and development.

3. Boost in job creation 

Investing more in this area will lead to the creation of many new jobs for people all around the world. An article in the MIT Technology Review estimates that more than 10 million individuals worldwide are involved in producing renewable energy. 

Thus, more rural regions are adopting these revenue streams and are investing in the necessary infrastructure. Therefore, residents will have access to the funds they require. If this trend continues, it will benefit economies around the globe.

Profitable implications for trade

Investment in green energy boosts international commerce. A country's trade balance improves when it needs to import less fuel. 

In addition to reducing debt and increasing GDP, green energy can also assist a country in avoiding environmental damage. The need for renewable energy-related equipment and services will also increase, boosting international business.

Challenges to the green energy sector

As with any investment, you should consider the amount of risk you can tolerate. You need to know the time you can commit to an investment before deciding which options to pursue. 

Different sectors' technologies have yet to be tested because the industry is so young. Your investment strategy may need to be adjusted in light of recent legal developments. 

Using exchange-traded funds, investors can quickly and easily diversify their holdings in the renewable energy industry.

Thus, the success or failure of a single venture or business has little bearing on the overall operation. The costs and risks associated with these options are negligible. 

ETFs do enhance your exposure to large companies. They decrease your exposure to small and medium-sized ones.

Investing in renewable energy allows you to tailor your portfolio to your specific goals. Stock trading is typically seen as more user-friendly than ETF investing. 

Because of their size and Reliance on cutting-edge technologies, the stocks of many renewable energy firms are more volatile than those of traditional power producers. It would help to diversify your portfolio to include investments in this industry and others.

More investments in this area will help alleviate many of the challenges we have today, especially as more people grow concerned about the environment. Supporting those who are developing novel ideas in this area may be a morally and financially sound choice.

Are renewable energy stocks financially strong?

Green and renewable energy stocks can be profitable wagers in various scenarios. Many have grown in popularity over time, rewarding early adopters with healthy profits and a sense of satisfaction with their decisions. 

The sector will continue to expand as more people become aware of climate change and the critical need to take action to protect our world.

Every financial commitment has some degree of uncertainty. When investing, you must do your research and only risk what you can afford to lose. 

Even while many renewable energy companies have done successfully and made investors a lot of money, the past is only sometimes a fair forecast of the future.

FAQs: questions people often ask

1. Can you make money buying stocks in the renewable energy sector?

Investors are drawn to India's renewable energy business because of the country's rising environmental consciousness, government support, and large investments in the industry.

2. What would the returns be if you invested in renewable energy?

They are producing power without contributing to global warming pollution by burning fossil fuels. Thus, they are developing alternative energy sources and decreasing Reliance on foreign oil. 

3. What are the advantages of green energy, and how do they help the economy?

To be clear, "green" refers to energy generated by renewable resources like the sun. The energy that does not contribute to air pollution is called "clean." In contrast, the energy regenerated indefinitely is called "renewable." Examples of the latter include hydropower, wind power, and solar power.

4. Does green energy have any future?

By 2030, the world's need for power is expected to equal 65 percent of the total, which could be met by cheap electricity from renewable sources. Potentially, by 2050, 90% of the power sector might be decarbonized, significantly reducing carbon emissions and aiding in climate change mitigation efforts.

Conclusion

Investing in green or renewable energy stocks can be a profitable and environmentally responsible method to build wealth. Please only put your money into stock once you've done your homework and determined it's the best option.