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India’s solar energy sector is experiencing significant growth, reflecting the nation’s commitment to its renewable energy goals. India has set an ambitious target of achieving 500 GW of renewable energy capacity by 2030, with solar power playing a key role in this effort. With the sector’s continued growth, investors can find exciting opportunities in solar energy stocks in India to take advantage of the burgeoning green energy boom.
However, it is important to have a deep understanding of the dynamics of the solar energy sector to take full advantage of this green revolution. In this article, we will discuss various factors to keep in mind when investing in solar energy companies. We will also discuss the potential benefits and risks associated with this type of investment, as well as provide guidance on how to invest. In addition, we will present an updated list of India’s top solar stocks for 2024.
Best Solar Energy Stocks in India 2024: Overview
Solar energy companies specialize in harnessing the sun’s energy to generate electricity. These companies are involved in manufacturing solar panels, providing solar energy solutions, and providing installation and maintenance services for solar energy systems. There are several companies emerging in India that are at the forefront of the solar sector and actively supporting the nation’s renewable energy goals.
1. Adani Green Energy Limited
AGEL is an Indian company focused on renewable energy and headquartered in Ahmedabad, India. Adani Group holds majority ownership while Total Energies holds a minority stake in the company. The company operates the Kamuthi Solar Power Project, which is considered one of the largest solar photovoltaic plants in the world.
As of May 27, 2024, the market cap of the stock is Rs 3,05,187 crore. The stock exhibits significantly higher volatility than the Nifty. The company under the solar industries has experienced impressive growth with an annual return rate of 41.52% over the last 5 years.
2. KP Energy Limited
Established in 2010, KP Energy Limited has emerged as a major player in the renewable energy sector in India, with its primary focus on wind power projects. The company has actively supported India’s sustainable energy goals through the development and operation of several wind power projects. In February 2024, the board of KP Energy approved the allotment of 4.44 crore bonus shares in a 2:1 ratio, taking the paid-up equity share capital to Rs 33.35 crore. The company also secured a contract for a 9 MW wind power project in Gujarat, leading to a significant increase in their stock price.
As on June 5, 2024, the market capitalization of KP Energy Limited was Rs 2,784.31 crore and the stock price was Rs 407.9. The company has consistently achieved a 5-year average return on investment (ROI) of 17.23%, and their 1-year return is an impressive 489.88%. The 5-year average net profit margin is 7.77%, while the return on equity (ROE) is an impressive 37.24%.
3. Orient Green Power Company Limited
Specializing in the renewable energy sector, Orient Green Power Company Limited is an Indian company that was founded in 2006 with the primary objective of generating renewable energy through wind power plants. They have a combined capacity of 402.3 megawatts (MW) spread across various regions of India, including Tamil Nadu, Andhra Pradesh, Gujarat, and Karnataka.
Additionally, they have a wind farm with a capacity of 10.5 MW in Croatia. This small cap company has a market capitalization of Rs 2,064 crore and is 5.34x more volatile than Nifty. The compounded annual growth rate of the stock over the last five years is 41.35%. Additionally, the debt-to-equity ratio has been quite high over the last 5 years, standing at 269.12%.
4. WAA Solar Limited
Founded in 2009, WAA Solar Limited focuses on developing and operating solar power projects. The company specializes in both utility scale and rooftop solar installations. WAA Solar has recently entered into a promising collaboration with a leading real estate developer to implement a rooftop solar project. The company is actively considering options to expand its solar operations in Southeast Asia.
As on June 5, 2024, WAA Solar Limited had a market capitalization of Rs 264.87 crore and the stock price was Rs 178.25. The 5-year average return on investment is 7.03%, while the 1-year return is an impressive 253.74%. The 5-year average net profit margin is 16.87%, while the ROE is 5.04%.
5. KPI Green Energy Limited
Established in 2008, KPI Green Energy Limited specializes in the development and operation of solar power projects. The company operates several solar plants under its ‘Solarism’ brand. KPI Green Energy is planning to launch a 200 MW solar power project in Gujarat. The company is making significant investments in advanced solar technology to improve efficiency and reduce expenses.
As on June 5, 2024, the market capitalization of KPI Green Energy Limited was Rs 11,231.25 crore and the stock price was Rs 1,755.45. The 5-year average return on investment is 11.18%, while the 1-year return is an impressive 412.29%. The 5-year average net profit margin is 16.65%, while the ROE is an impressive 53.27%.
6. Borosil Renewables
Borosil Renewables has secured a prominent position in the list of top solar energy stocks. It is the only Indian manufacturer of solar glass, which is a critical component of solar panels. With a solar glass manufacturing capacity of 1350 TPD, this company is a major player in the solar industry.
The company has a strong global presence, with several international clients in Western Europe and Turkey. Additionally, exports contribute significantly to the company’s revenue, accounting for 25% of the total. In FY 2023, the company’s total income was ₹913.77 crore. In the first half of FY 2024, the company earned a total income of ₹768.77 crore and achieved an EBITDA margin of 9.5%.
7. Suzlon Energy
We are all familiar with the solar energy company Suzlon. It is a global leader in wind power and has recently ventured into the solar energy industry. Our company focuses on providing comprehensive solutions for solar energy projects. We assist clients in acquiring solar power plant projects and guide them in setting up a profitable operation.
In FY23, the company generated revenue of ₹5,990.16 crore, showing a growth of 6.8% compared to the revenue of ₹5,603.97 crore in the previous financial year. In H1FY24, the company’s revenue stood at ₹2,790.37 crore, showing a marginal decline of 1.2% compared to the previous financial year. In FY23, the EBITDA margin was recorded at 14.1%, while in H1FY24, it increased to 15.6%.
8. Urja Global
Urja Global is a solar energy stock emerging as a top player in the renewable energy development space. They provide comprehensive solutions for solar power projects. We specialize in design, consultancy, integration, supply, installation, commissioning and maintenance of off- and on-grid solar plants.
In FY23, the company’s total revenue was ₹41.41 crore, a decrease of 44.4% compared to ₹74.53 crore in the previous financial year. In H1FY24, total income was recorded at ₹21.32 crore, showing a growth of 4% compared to ₹20.50 crore in the previous financial year.
9. Ujaas Energy Limited
Ujaas Energy Limited, based in India, is a major player in the solar energy sector. They provide comprehensive solutions for developing, operating, owning, and maintaining solar power plants under the UJAAS brand. The company is involved in three main areas: operating solar power plants, manufacturing and selling solar power plants, and working with electric vehicles (EVs). The company offers several products, including Ujaas Park, Ujaas My Site, and Ujaas Home, designed to meet the diverse needs of customers ranging from commercial entities to residential homes. They provide comprehensive solutions for solar power generation and customized installation.
The market capitalization of Ujaas Energy Limited is Rs 461.22 crore. The monthly return of the stock is an impressive 39.94%. The one-year return is an impressive 2267.57%. The stock is currently trading very close to its 52-week high.
10. Geeta Renewable Energy Limited
Geeta Renewable Energy Limited is an India-based company that specializes in power generation through renewable energy sources. The company’s main focus is on developing, owning, and operating power plants that use renewable energy sources. Its portfolio includes wind, solar, and biomass energy projects that are focused on providing sustainable and environmentally friendly power solutions. Geeta Renewable Energy Limited is entirely focused on the production of renewable energy. The company is dedicated to having a positive impact on carbon emissions and supporting India’s energy needs in an environmentally friendly manner.
Geeta Renewable Energy Limited has a market capitalization of Rs 70.20 crore. The stock’s monthly return is an impressive 20.13%. The one-year return is an impressive 115.01%. The stock is currently trading a considerable distance away from its 52-week high.
Why Invest in Solar Energy Stocks?
Investing in solar energy stocks can be a smart move for those who want to take advantage of the growing market for solar energy solutions and potentially earn attractive long-term returns. Investors can diversify their portfolios and support the cause of sustainable energy and reducing greenhouse gas emissions.
The government’s allocation of ₹75,000 crore for the National Rooftop Solar Scheme, also known as the PM Surya Ghar Free Electricity Scheme, is expected to have a significant impact on the demand for solar-related products. This increased demand could lead to a rise in the prices of solar energy stocks.
Factors to consider before investing in solar energy stocks in India
Before buying leading solar energy stocks in India, it is important to consider certain factors to make an informed decision. These factors include:
financial performance
It is important to assess the financial performance of a solar energy company, including revenue margins, profitability, cash flow, and other factors. Look for companies with strong financial parameters.
Global economic factors
Many global economic factors can have an impact on the stocks of solar companies. For example, supply chain disruptions can have a significant impact on the availability of raw materials and other components used in solar industries.
Competitive Advantage
Investing in solar stocks can be highly profitable in India, thanks to the significant cost advantage of solar power. This has led to a significant increase in the demand for solar equipment. Competition is a key factor, so it is important to identify solar stocks with long-lasting competitive advantages.
Government Policies
Governments play a key role in shaping the direction and influence of various sectors. They can influence and regulate various aspects of society, such as the economy, environment, and social welfare. Decisions made by policymakers can have wide-reaching effects, affecting individuals, businesses, and communities.
The Indian government offers various policies and incentives to support the solar energy market. It is important to monitor these policies closely as they can have a significant impact on the future of this industry.
conclusion
Investing in solar energy stocks in India presents a promising opportunity, given the rapid expansion of the industry. By comprehensively analyzing financial parameters and carefully evaluating each company’s market position and potential, investors can make decisions that align with their investment objectives. It is important to conduct extensive research before making any investment decisions.
Disclaimer: This blog is for educational purposes only. The securities/investments mentioned here are not recommendatory.
