Looking for solar energy stocks in India? Since the signing of the Paris Climate Accord in 2015, where global leaders pledged to limit the increase in average global temperature below 2°C above pre-industrial levels, the focus has turned towards reducing the use of fossil fuels across various economic activities.
As a result, countries worldwide started solarizing their economies, creating enormous opportunities for solar companies. In India, the government has set an ambitious target of meeting 50% of its energy requirements from renewables. A big chunk of this requirement will be met through solar energy stocks. As of October 2022, the country’s total installed renewable energy capacity was 166 GW and is likely to grow to 500 GW by 2030. About 60% is expected to be solar power.
India’s top solar energy stocks are likely to benefit from the rising demand for solar power.
Top 10 Solar Energy Stocks List in India
- Tata Power
- Adani Green
- Borosil Renewables
- Suzlon Energy
- KPI Green Energy
- Urja Global
- NTPC
- NHPC
- REC Ltd.
- SJVN
Tata Power
| Market Cap | CMP (as of 26th Nov 2023) | All-time High Level | PE Ratio | 5 yr CAGR Return | ROCE (FY23) |
| ₹1,21,087crore | ₹379 | ₹413 | 35.4 | 41% | 14.34% |
Tata Power is a solar energy stock that is one of India’s oldest and largest integrated solar energy power-generating and distributing companies and has operated since 1915. With the changing global power landscape, Tata Power has focused on increasing the share of renewable energy in its energy mix. Renewable energy accounts for 38% of its energy mix, which it plans to grow to 70% by 2030 and 100% by 2045.
The company’s current solar capacity is 3,191 MW, with 1,460 MW under construction. It is also present in the wind energy segment with an operational plant of 1,007 MW and a 2,300 MW hybrid plant under construction. Tata Power Solar Systems Limited (TPSSL), a Tata Power subsidiary, is India’s largest manufacturer of solar panels and related products.
In FY23, Tata Power’s revenue from renewable energy was ₹8,196.91 crores, up 5.8% from ₹7,748.9 the previous fiscal. And, in H1FY24, the company reported total renewable revenue at ₹4,235 crores, an increase of 14.7% from the same period in the previous fiscal from ₹3,693 crores.
Adani Green
| Market Cap | CMP (as of 26th Nov 2023) | All-time High Level | PE Ratio | 5 yr CAGR Return | ROCE (FY23) |
| ₹ 1,48,566 crore | ₹938 | ₹3,050 | 102 | 81% | 3.74% |
Adani Green is next among the top solar energy stocks. Incorporated in 2016, Adani Green is one of India’s largest renewable energy power producers, with operational assets of 8,404 MW, 1,899 MW of assets at the near completion stage, and 10,131 MW of assets under construction.
In FY23, the company’s total revenue was ₹5,825 crores, up 54% from ₹3,783 crores in FY22. And, in H1FY24, total revenue came in at ₹4,029 crores. Adani Green is consistently generating industry-leading EBITDA margins of 90%+. In FY23 and H1FY24, the EBITDA margin stood at 92%.
Borosil Renewables
| Market Cap | CMP (as of 26th Nov 2023) | All-time High Level | PE Ratio | 5 yr CAGR Return | ROCE (FY23) |
| ₹ 7,357 | ₹564 | ₹669 | – | 60% | 9.94% |
Borosil Renewables makes it to the top solar energy stocks list. It manufactures one of the critical components of solar panels, i.e., solar glass, and is India’s first and only manufacturer. It has a combined solar glass manufacturing capacity of 1350 TPD (equivalent to solar glass for 8.5 GW solar modules).
The company has a global presence with most international clients based in Western Europe and Turkey, and exports contribute 25% to the revenue. In FY23, the company reported a total income of ₹913.77 crores. In H1FY24, the company’s total income stood at ₹768.77 crores and reported an EBITDA margin of 9.5%.
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Suzlon Energy
| Market Cap | CMP (as of 26th Nov 2023) | All-time High Level | PE Ratio | 5 yr CAGR Return | ROCE (FY23) |
| 61,763 crores | ₹45.8 | ₹50.7 | 125 | 62% | 20.27% |
Most of us know of that solar energy stock Suzlon. It is the world leader in wind energy and has recently expanded into the solar energy sector. It specializes in providing end-to-end solutions for solar power projects, assisting clients in acquiring solar power plant projects, and helping them set up a profitable operation.
In FY23, the company earned a revenue of ₹5,990.16 crores, up by 6.8% compared to the previous fiscal at ₹5,603.97 crores. In H1FY24, the company reported revenues at ₹2,790.37 crores, marginally down by 1.2% compared to last fiscal year. The EBITDA margins in FY23 and H1FY24 stood at 14.1% and 15.6%, respectively.
KPI Green Energy Limited
| Market Cap | CMP (as of 26th Nov 2023) | All-time High Level | PE Ratio | 3 yr CAGR Return | ROCE (FY23) |
| ₹ 9,403 crores | ₹1,560 | ₹1,631 | 62.4 | 131% | 25.53% |
KPI Green is another solar energy stock, a Gujarat-based solar and wind power company. It develops, builds, owns, operates, and maintains solar and hybrid power plants as an independent power producer or service provider to captive power producers. The company has executed over 331 MW of solar projects and has an order pipeline of 546 MW.
In FY23, the company reported a total income of ₹647.03 crores, witnessing a massive jump of 179% from ₹231.51 crores in FY22. And, in H1FY24, total income was reported at ₹406.51 crores, up by 43.66% from ₹282.95 crores in H1FY23. The EBITDA margin in FY23 and H1FY24 is 32.65% and 35.05% respectively.
Urja Global
| Market Cap | CMP (as of 26th Nov 2023) | All-time High Level | PE Ratio | 5 yr CAGR Return | ROCE (FY23) |
| ₹1,353 crores | ₹25.8 | ₹41.8 | 548 | 56% | 1% |
Urja Global is another solar energy stock which is one of the leading renewable energy developers providing end-to-end solutions to solar power projects. It is into the design, consultancy, integration, supply, installations, commissioning, and maintenance of off-on-grid solar plants.
In FY23, the company earned a total revenue of ₹41.41 crores, down by 44.4% from ₹74.53 crores in FY22. And, in H1FY24, total income is reported at ₹21.32 crores, up by 4% from ₹20.50 crores.
Solar energy will play a crucial role in achieving energy security and is also pivotal in the global shift towards sustainable practices. The rapid increase in setting up solar energy businesses shows the potential for growth and innovation in India’s renewable sector.
However, with China still dominating the solar energy supply chain, it poses a significant risk to the profitability of Indian businesses. Furthermore, the sector receives considerable assistance from the government through policy initiatives, which is a big plus. Still, a change or shift in policy could impact businesses.
NTPC
| Market Cap | CMP (as of 26th Nov 2023) | All-time High Level | PE Ratio | 5 yr CAGR Return | ROCE (FY23) |
| ₹3,35,115 crores | ₹346 | ₹346.50 | 17.2 | 25% | 9.42% |
National Thermal Power Corporation is a state-backed company that primarily generates and sells bulk power to power distributing companies. Initially, NTPC was a pure thermal power generator before expanding into solar and wind power generation.
NTPC Renewable Energy Ltd. is developing large solar, wind, and hybrid projects nationwide through its subsidiary. The company has recently commissioned 3,364 MW of renewable energy, with 7,808 MW under execution and 8,155 MW under tendering.
In FY23, the company’s total turnover was ₹1,77,609 crores, with a 4% contribution from green energy. In the previous fiscal year, total revenue was ₹1,34,616 crores.
EBITDA margin for FY23 was recorded at 19%.
For the first nine months of FY24, the company’s total income is reported at ₹1,32,349.31 crores, marginally lower than ₹1,33,231.43 crores.
NHPC
| Market Cap | CMP (as of 26th Nov 2023) | All-time High Level | PE Ratio | 5 yr CAGR Return | ROCE (FY23) |
| ₹95,021 crores | ₹94.8 | ₹116 | 25.6 | 32% | 6.7% |
NHPC India, India’s premier hydropower utility company, recently expanded into developing solar and wind projects. The company has 53.2 MW of solar projects and has started work on a 300 MW solar project in Rajasthan.
In FY23, the company’s total revenue was ₹11,284.90 crores, compared to ₹10,108.26 crores in FY22. EBITDA margin FY23 was 61.65%.
For the nine months of FY24, the company’s total revenue was ₹8,673.73 crores, compared to ₹9,056.22 crores in the same period previous fiscal.
REC Ltd.
| Market Cap | CMP (as of 26th Nov 2023) | All-time High Level | PE Ratio | 5 yr CAGR Return | ROCE (FY23) |
| ₹1,23,037 crores | ₹467 | ₹524 | 9.37 | 37% | – |
REC Ltd., formerly Rural Electrification Corporation Limited, is a government-owned Navratna company. It has been designated the primary implementing agency for the government’s ambitious grid-connected rooftop solar initiatives. The company board recently approved about ₹1.2 lakh crore line of credit for willing power sector PSUs for implementing rooftop solar projects.
In FY23, the company reported a total income of ₹39,253 crores, similar to the previous fiscal year’s ₹39,230 crores. And, in 9MFY24, the total revenue is reported at ₹34,864.57 crores, up from ₹29,265.53 crores in 9MFY23.
SJVN Limited
| Market Cap | CMP (as of 26th Nov 2023) | All-time High Level | PE Ratio | 5 yr CAGR Return | ROCE (FY23) |
| ₹48,415 crores | ₹123 | ₹170 | 54.2 | 38% | 7.04% |
SJVN a joint venture company between the Government of India and the Government of Himachal Pradesh, is a leading hydropower generating company. The company has recently ventured into developing solar power stations and commissioned close to 400 MW of solar plants.
In FY23, the company reported a total revenue of ₹3,282.50 crores, up from ₹2,634.78 crores in FY22. For the nine months of FY24, the company’s total income is ₹2,303.73 crores compared to ₹2,669.72 crores recorded in the same period in the previous fiscal.
Why Invest in Solar Energy Stocks?
Investing in solar energy stocks has the potential to generate attractive long-term returns by capitalizing on the growing market for solar energy solutions. It also allows investors to 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 PM Surya Ghar Muft Bijli Yojana, will increase demand for solar-related products and potentially raise prices for solar energy stocks.
Factors to Consider Before Investing in Solar Energy Stocks
Before investing in solar energy stocks, there are several factors to be considered:
Industry Trends: Solar energy is an emerging sector receiving much government support and investment. Research the current trends and future growth projections for the solar energy industry and technological advancements.
Regulatory Environment: Understanding the regulatory landscape governing the solar energy sector is key to understanding how different companies in the segment will perform in the long term. Also, any change in government policies can significantly impact the industry’s outlook.
Market Position: The solar energy sector is witnessing massive participation from large corporations and governments. Invest in companies with strong market leadership, innovative products, and sustainable competitive advantage.
Risk Factors: Evaluating risks associated with investing in solar stocks, such as regulatory risks, operational risks, technological risks, and financial risks, is critical for determining the likelihood of long-term growth prospects. Also, avoid investing in solar energy penny stocks.
Company Fundamentals: The solar energy sector is booming, with participation from a wide range of companies. Evaluating the company fundamentals, such as revenue growth, profitability, debt level, and market share, is critical for understanding the company’s competitive advantage.
Advantages of Investing in Solar Energy Stocks
There are multiple advantages of investing in solar energy stocks, such as:
Growth Potential: Renewable energy, especially the solar energy sector, is a sunrise sector experiencing rapid growth driven by increasing demand for renewable energy sources. The recent growth push by the Government of India by launching the National Rooftop Solar Scheme in February 2024 is a big step to push demand for solar-related products across India. Investing in solar energy stocks provides exposure to this growth potential.
Cost Advantage: Compared to thermal power plants, the operational cost of solar power parks is much lower and low maintenance cost, resulting in high-profit margins. Due to these cost benefits, solar energy stocks stand to benefit the most over the long term over thermal power stocks.
Decreasing Cost and Technological Advancement: Solar energy stocks continue to benefit from solar technology cost reduction and better power yield from each panel, resulting in better unit economics and profitability metrics.
Stable Returns: Solar energy projects typically have long-term power purchase agreements with power distributing companies with fixed pricing, providing a stable revenue stream with predictable cash flows. This stability results in steady returns for investors in solar energy stocks.
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FAQs on Solar Energy Stocks in India
Which is the best Solar Energy Stock in India?
In India's dynamic landscape of solar energy stocks, it's prudent to approach the quest for the best with a balanced perspective. Different stocks may align with varying investment goals and risk tolerances. Engage in comprehensive research, considering factors like market performance, sustainability practices, and overall reputation. A diversified approach and consultations with financial experts can guide you toward better investment decisions in this evolving sector.
Is Solar Energy stock an investment?
Yes, investing in solar energy can be a sustainable financial decision. In India, various solar energy stocks offer opportunities for investors looking to contribute to renewable energy while potentially gaining returns. Consider exploring stocks in the solar energy sector for an environmentally conscious investment approach.
Will solar energy stocks rebound?
The rebound of solar stocks depends on various factors such as market trends, government policies, and the overall performance of the renewable energy sector. Investors should closely monitor solar industry developments, including technological advancements and shifts in global energy policies, to make informed predictions about the potential rebound of solar stocks in India.
Should I invest in Solar energy stocks?
Investing in solar stocks can be a strategic decision for those seeking exposure to the growing renewable energy sector. However, it's essential to conduct thorough research, assess the financial health of solar companies, and stay informed about industry trends. Consider factors like government initiatives, technological advancements, and global energy demand before investing in India's solar stocks. Diversification and a long-term investment perspective are key considerations for those contemplating solar energy investments.
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I’m Archana R. Chettiar, an experienced content creator with
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