Best Green Energy Stocks For Feb 2025 Based on 5Y CAGR: Suzlon, Adani Green and More

India’s intention to achieve net-zero carbon emissions by 2070 and to fulfil 50% of its electricity needs with renewable energy by 2030 represents a significant milestone in the global fight against climate change. With enhanced government support and improved economic conditions, the sector has become increasingly appealing to investors. As India aims to meet its growing energy demand, projected to reach 15,820 TWh by 2040, renewable energy will be a key player in this effort. In this article, we will look at the best green energy stocks Feb 2025 based on different parameters.

Best Green Energy Stocks For Feb 2025 – Based on 5Y CAGR

Note: The stocks mentioned above have been selected from the Renewable Energy Sector and sorted based on 5Y CAGR as of January 29, 2024 

Overview of Best Green Energy Stocks

1. Suzlon Energy Limited

Suzlon is one of the leading global renewable energy solutions providers. It is a vertically integrated WTG manufacturer. It also undertakes installation and O&M of all WTG sales. The company recorded a net cash position of ₹ 1,277 crores as of Sep 30, 2024. It received the largest single order of 1,166 MW from NTPC.

Key Metrics:

• Return on Equity (ROE): 28.8%
• Return on Capital Employed (ROCE): 24.9%

2. Jaiprakash Power Venture Limited

Jaiprakash Power Venture Limited is involved in coal mining, sand mining, cement grinding, and the production of thermal and hydroelectric electricity. The company’s revenue amounted to ₹6,762.78 crore in FY24 as compared to ₹5,786.67 crore in FY23.

Key Metrics:

• ROE: 12.8%
• ROCE: 14.0%

3. Adani Green Energy Limited

Adani Green Energy Limited is engaged in the business of renewable power generation within the group and is primarily involved in renewable power generation and other ancillary activities. During Q3 FY25 and 9MFY25, Adani Green made impressive growth in its capacity expansion and operational performance, marking a significant leap toward its long-term renewable energy goals. It achieved an industry-leading EBITDA margin of 92.0%.

Key Metrics:

• ROE: 14.7%
• ROCE: 9.65%

4. SJVN Ltd

SJVN is engaged in the business of providing consultancy for hydropower projects. During Q2 FY25, the Cabinet Committee approved the investment of ₹5,792.36 crores for the 669-megawatt Lower Arun Hydroelectric Project in Nepal. The project will be implemented through SJVN Lower Arun Development Company Private Limited, a wholly owned subsidiary of SJVN, incorporated in Nepal.

Key Metrics:

• ROE: 5.90%
• ROCE: 4.99%

5. NHPC Ltd

NHPC is primarily engaged in generating and selling bulk power to various Power Utilities. During 1HFY25, NHPC recorded Revenue from Operation of ₹4,969 Crore as against ₹ 5,056 Crore in the corresponding previous year, down 2%.

Key Metrics:

• ROE: 9.61%
• ROCE: 7.67%

Best Green Energy Stocks For Feb 2025 – Based on Net Margin

Note: The stocks mentioned above have been selected from the Renewable Energy Sector and sorted based on net margin of January 29, 2024

Best Green Energy Stocks For Feb 2025 – Based on Debt to Equity

Note: The stocks mentioned above have been selected from the Renewable Energy Sector and sorted based on debt to equity as of January 29, 2024

Who Should Invest in Green Energy Stocks?

Investing in green energy stocks is ideal for individuals who are passionate about sustainability and want to align their financial goals with environmental values. It’s particularly suited for long-term investors who are looking for growth opportunities in industries like renewable energy, electric vehicles, and energy efficiency. Those with a higher risk tolerance may also find potential rewards, as these sectors can be volatile in the short term but have significant growth potential due to the global shift toward cleaner energy.

Factors to Consider Before Investing in Green Energy Stocks

• Market Volatility: Green energy stocks can be volatile due to fluctuating government policies, changes in subsidies, and global energy prices. Investors should be prepared for potential ups and downs, especially in the short term.
• Government Regulations and Subsidies: Green energy companies often rely on government incentives and regulations to thrive. It’s important to stay informed about policies, tax credits, or any potential changes that could affect the industry’s growth.
• Company Financial Health: Like any investment, evaluating the financial stability and profitability of the companies you’re considering is crucial. Look at their revenue growth, debt levels, and overall business strategy to ensure they have a solid foundation.
• Technological Innovation: Green energy is an evolving industry, and companies that are leading in technological advancements (like solar, wind, or energy storage) may have a competitive advantage. Keep an eye on companies investing in R&D and their ability to stay ahead of trends.
• Long-Term Sustainability: The green energy market is growing, but it’s still developing. Assess whether the companies you’re considering have a long-term vision and are positioned for future growth in the industry, rather than just benefiting from short-term trends.

Conclusion

Investing in green energy stocks can be a rewarding opportunity for those looking to support sustainability while potentially reaping financial returns. However, like any investment, it requires careful consideration of market volatility, government policies, company fundamentals, and the sector’s long-term growth potential.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.