India’s Renewable Energy Boom: Unpacking Growth, Players, and Stock Picks

India’s renewable energy sector is buzzing, and it’s not hard to see why. The country is making waves globally, chasing big green goals with a mix of grit, policies, and serious investments. For anyone curious about where this is headed or eyeing renewable energy stocks, here’s a rundown of the sector’s size, the government’s playbook, the companies in the driver’s seat, and what it all means for investors pursuing renewable energy stocks in India.

The Scale of the Renewable Energy Sector

By July 2024, India’s renewable energy capacity was clocked at 150.27 gigawatts (GW). In October, non-fossil sources were powering 44.72% of the nation’s grid. The folks at ICRA (Investment Information and Credit Rating Agency) reckon it will hit 170 GW by 2025, up from 136.57 GW at the end of 2023. The real eye-popper is a 450 GW target by 2030, with solar slated to carry over 60% of that- think 280 GW or so.

2023-24 added 18.48 GW, a 21% jump from the year prior. Solar has been the star, hitting 16.9% of total power and 40.1% of renewables by December 2023, growing 26 times to 73.32 GW in nine years. Hydropower’s chugging along too, with 15 GW in the pipeline, set to lift capacity from 42 GW to 67 GW by 2031-32. That kind of growth has folks talking about clean energy stocks and their place in the mix.

The Government’s Big Push

None of this happens without a plan. The Ministry of New and Renewable Energy has got its sights on 500 GW of non-fossil power by 2030, a promise the Prime Minister made at COP26.

The 2024-2025 Interim Budget pumped Rs. 8,500 crore (US$ 1.02 billion) into solar grids, nearly doubling the previous year’s Rs. 4,970 crore (US$ 0.60 billion). Then there’s PM-KUSUM, retooled in 2024 to get farmers in on the action with solar setups and pumps.

States aren’t sitting idle either. Rajasthan struck a deal with NTPC Green Energy for 28,500 MW of renewable projects, part of a Rs. 1.6 lakh crore (US$ 19.18 billion) power push. Add a net-zero vow by 2070 and a goal of 50% renewable electricity by 2030, and it’s no wonder renewable energy stocks in India are on investors’ radars.

Cash Flowing Into Clean & Renewable Energy

The sector is a magnet for money. From April 2000 to March 2024, foreign direct investment in non-conventional energy topped US$ 17.88 billion. By 2030, estimates investments at over US$ 360 billion, with US$ 190 billion to US$ 215 billion needed for that 500 GW dream, says Moody’s. Solar projects could snag US$ 15.5 billion, batteries US$ 2.7 billion, plus more for wiring up the grid. That’s a goldmine for anyone sizing up renewable energy stocks.

Top Renewable Energy Stocks in India & Their Analysis

Who is steering this ship? A few standout companies are worth watching as prime picks for the top renewable energy stocks in India:

Solar Energy Companies

1. Adani Green Energy Ltd

• Market Cap: ₹1,42,174.84 crores
• P/E Ratio: 129.25
• 5Y Avg ROI: 6.64%
• Net Profit Growth: 92.2% YoY
• Long Term Beta: 2.24
• Focus: Major player in solar and wind energy production

2. KPI Green Energy Ltd

• Market Cap: ₹7,398.16 crores
• P/E Ratio: 45.76
• 5Y Avg ROI: 11.99%
• Revenue Growth: 38.8% YoY
• Beta (Daily - One Month): 2.64
• Focus: Solar power development and sales

3. Borosil Renewables

• Focus: Manufacturer of solar glass for photovoltaic panels
• Recent Performance: 4.99% price increase in recent trading

Wind Energy Companies

1. K P Energy Ltd

• Market Cap: ₹2,800.31 crores
• P/E Ratio: 47.75
• 5Y Avg ROI: 19.94%
• Revenue Growth: 156.8% YoY
• Net Profit Growth: 185.0% YoY
• Beta (Daily - One Month): 2.81
• Focus: Wind energy development and operations\

2. BF Utilities Ltd

• Market Cap: ₹2,608.48 crores
• P/E Ratio: 19.7
• 5Y Avg ROI: 14.40%
• P/E Ratio Change: 27.5 in 2020 to 19.7 in 2024 (CAGR of -6.45%)
• Focus: Wind energy generation

Hydroelectric Power Companies

1. SJVN Ltd

• Market Cap: ₹35,175.60 crores
• P/E Ratio: 38.59
• 5Y Avg ROI: 8.25%
• Market Cap Growth: 42.45% CAGR over 5 years
• Dividend Payout: 77.87%
• Focus: Hydroelectric power with diversification into solar and wind

Diversified Renewable Energy Companies

1. JSW Energy Ltd

• Market Cap: ₹76,857.07 crores
• P/E Ratio: 44.61
• 5Y Avg ROI: 7.88%
• Market Cap Growth: 65.54% CAGR over 5 years
• Long-Term Beta: 2.05
• Focus: Diversified power company with a significant renewable portfolio

These outfits show the sector’s depth - plenty of choices for the top renewable energy stocks in India.

What’s Cooking in the Market?

Solar’s the one to watch. Cheaper panels and sharper tech could enable it to fuel half of the world's new power demand by late 2025. Meanwhile, microgrids and blockchain are shaking things up - neighbors are swapping solar juice and dodging blackouts. Storage is heating up too, with batteries getting smarter to keep the grid humming, a plus for renewable energy stocks.

Costs are way down - solar tariffs crashed from INR 10.95/kWh in 2010 to INR 2.5/kWh by 2023, a 90% drop. Jobs are popping up too: 1.02 million by 2023, with 3.4 million more on the horizon by 2030. Northern India’s 363 GW potential could make it the renewable capital, sparking interest in renewable energy investments across the country.

The Rough Patches and Bright Spots

There are challenges to overcome. Renewable energy sources fluctuate, necessitating an increase in storage capacity. The grid is in dire need of an upgrade, the upfront costs are significant, and land disputes impede progress. But solar’s cheaper than ever, companies are going green, and the government’s got cash and carrots aplenty. New technology in storage and grids has the potential to shift the balance, thereby increasing the value of clean energy stocks.

Why Invest in Renewable Energy Stocks in India?

What’s the draw for the best renewable energy stocks in India? The combination of robust policies, technological advancements, and a strong environmental focus is compelling.

India’s renewable energy story is electric, literally. With 450 GW by 2030 and Net Zero by 2070 in its sights, backed by sharp policies and eager wallets, the sector is cooking. For those scouting out renewable energy stocks, this is a market with potential, as the top renewable energy stocks in India and clean energy stocks are not only powering grids but also illuminating a sustainable future.

Note: The views expressed in this article are solely those of the author and do not necessarily reflect the views of Equirus Wealth. This content should not be construed as investment advice. For personalized guidance, please connect with our experts.

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