List of Energy Stocks 2024

Key takeaways

• India is the third-largest energy consumer worldwide, consuming 6% of the total energy.
• The Indian government is pushing for a transition to green energy to achieve its target of being carbon-neutral by 2070.
• With the growth of the green energy sector, investors can consider investing in the best renewable energy stocks in India for good returns.

As a consumer, almost every end product you use is manufactured, produced, and supplied using energy. The Indian energy sector is one of the fundamental cores of the Indian economy, allowing for industrial and social development and improving India’s overall GDP. The Indian energy sector is the third-largest consumer of energy and is responsible for around 6% of global energy consumption. Given the massive improvement in the sector and the increasing demand for energy in India, IEA expects India’s share in energy consumption will likely increase to 9.8% by 2050. Furthermore, the Indian government’s push toward renewable energy has increased the growth of India's renewable or green energy sector. As India develops policies and provides incentives to reach its carbon-neutral goal by 2070, energy sector stocks are likely to benefit.

If you are an investor in the Indian stock market, you can consider investing in the best renewable energy stocks in India, which have seen a massive rally in recent years. This blog will help you learn about the top 20 renewable energy stocks and the sector’s future potential.

Energy industry in India - A brief overview

As the third largest energy producer with an installed capacity of over 417 Gigawatts, India has made great strides in transforming itself from a nation deficient in energy production to an energy surplus one. The country is heavily dependent on fossil fuels, especially coal, to meet the growing needs of the increasing population, rapid urbanisation, and industrial growth.

The government has also played a huge role in this by launching various electrification initiatives like Unnat Jyoti by Affordable LEDs for All (UJALA), Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY), and Pradhan Mantri Sahaj Bijli Har Ghar Yojana (SAUBHAGYA). Through these projects, the government wants to promote electrification across all rural areas of the country and promote efficiency in the use of energy.

While fossil fuels make up a huge chunk of the current energy requirements, the government is taking many proactive measures to shift to renewable energy sources and reduce its carbon footprint. India is heavily investing in greener sources of energy and plans to increase its non-fossil fuel-based energy sources from 43% at present to over 60% by the year 2047.

Additionally, renewable energy capacity is expected to surge from 177 GW in 2023 to 512 GW by 2030, reaching 1,819 GW by 2047 in alignment with the net-zero emissions target.

Energy stocks to watch out for in 2024

The Indian government has set a target of 500 GW of renewable energy capacity by 2030, focusing on solar, wind, hydropower, and bioenergy. The Indian green energy sector is also witnessing higher investments, technological advancements, and government policy support. These positive factors can significantly benefit green energy companies and their energy sector stocks. Furthermore, the best renewable energy stocks in India can allow for effective portfolio diversification and ensure good long-term returns.

Here are 20 renewable energy stocks you can consider adding to your portfolio in 2024:

• Ujaas Energy Ltd.
• Taylormade Renewables Ltd.
• Rattanindia Enterprises Ltd.
• Websol Energy System Ltd.
• Adani Green Energy Ltd.
• Git Renewables Energy Ltd.
• Trishakti Industries Ltd.
• Suzlon Energy Ltd.
• Power and Instrumentation (Gujarat) Ltd.
• Global Offshore Services Ltd.
• Reliance Industries
• Tata Power Company Limited
• ReNew Power Private Limited
• Inox Wind Limited
• Borosil Renewables Limited
• Greenko Energy Holdings
• Orient Green Power Company Limited
• Azure Power Global Limited
• Waaree Energies Limited
• KPI Green Energy Limited

The above power share list contains the best energy stocks in India to consider and add to your portfolio. These top 20 renewable energy stocks are at the forefront of India’s transition from fossil fuels to green fuels such as hydrogen, which significantly reduces carbon emissions and helps create a sustainable, pollution-free environment. However, as global and domestic government policies highly influence the energy sector, it is important that you monitor these stocks and analyse them extensively before buying.

Here are some benefits of watching and adding the best green energy stocks in India to your portfolio:

• Growth potential: The green energy translation is relatively new, and leading energy companies have massive growth potential. Investing in undervalued energy sector stocks can provide good long-term returns.
• Dividend income: Many established energy companies offer attractive dividends, providing a steady income stream for investors.
• Diversification: Investing in energy stocks allows for diversification in a portfolio, spreading the risk across various sectors.

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How to choose the right energy stocks?

Here are some factors you should consider when choosing the right energy sector stocks:

• Investment goals: Determine your investment goals, risk tolerance and time horizon. It will help you identify and analyse the best energy stocks in India.
• Industry segment: Analyse all the industry segments such as solar, wind, bioenergy, hydro, etc. Identify stocks of the segment you feel has the highest growth potential.
• Company fundamentals: Look for companies with strong balance sheets, consistent revenue growth, and manageable debt levels. Furthermore, analyse the company’s profitability metrics such as profit margins, net income, ROE, P/E ratio, etc.
• Government policies: Monitor various existing and new government policies to understand their impact on various companies. Identify companies that will benefit from these policies and analyse their stocks.
• Market leadership: Decide between investing in established companies with proven track records and emerging companies with high growth potential. Market leaders may provide more stable returns, while high-growth companies may offer higher returns with higher risk.

Should you invest in energy stocks?

Energy stocks can be a good option for portfolio diversification but it comes with its own set of challenges. Global oil price fluctuations, government regulations, geopolitical tensions, and various other factors have a huge influence on the prices of energy stocks.

Another challenge is the environmental impact. Countries across the globe are under pressure to transition to clean energy sources and reduce carbon emissions, which poses a challenge for energy companies. Similarly, supply chain disruptions and other statutory and regulatory requirements add to operational challenges.

Hence, as a well-informed investor, one should always be aware of the potential downfalls and risks before making an investment decision.

Emerging trends in energy stocks

Listed below are some emerging trends in energy sector stocks:

• Green energy shift: More traditional energy companies are currently shifting their focus towards renewable energy, believing that the green energy sector will dominate the energy sector in the future.
• Government support: The Indian government is developing more policies and incentives to ensure it achieves its carbon-neutral and green energy production goals, benefiting the green energy companies in India.
• Energy storage solutions: Increasing demand for EVs in India has increased the demand for energy storage, especially through battery technology. Companies involved in EV charging infrastructure, battery manufacturing, and renewable energy are benefiting from this trend.

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Expert insights on energy stocks

Experts believe the green and renewable energy sector will be one of the biggest growth drivers in the coming years. They are bullish on the overall sector and believe that green energy companies will lead the transition to clean energy, especially those that have a higher focus on solar, wind and battery storage.

Here are some valuable expert insights on energy stocks:

• Diversified companies: Experts believe that the stocks of traditional energy companies with an added focus on green energy will be better positioned to see better business and capital appreciation in their stocks.
• Innovation: Companies that develop and innovate through advanced energy technologies have better chances of capturing a higher market share. Due to better innovation and growth, the stocks of such companies can increase in price.
• Sustainability: The stocks of green energy companies with better Environmental, Social, and Governance (ESG) ratings are more likely to provide good returns to investors as they are more favoured for investments.

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Conclusion

The green energy sector is one of India's fastest-developing sectors, allowing companies to manufacture products using more sustainable energy. The Indian government is also pushing the Indian sectors to adopt green and renewable energy solutions to reduce carbon emissions. Such a push is resulting in an increase in the prices of energy sector stocks, which you can consider adding to your portfolio for effective diversification and better returns.

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