Driving India’s Energy Transformation: Top 5 Performing Power Stocks of FY24!

Power is a critical component of infrastructure, vital for economic growth and national welfare. In India, ensuring universal access to affordable and sustainable electricity has been a key principle. Efforts by the Ministry of Power have transformed the country from a power-deficient to a surplus state through initiatives like establishing a national grid and achieving universal household electrification. In this blog, we’ll explore the top 5 performing power stocks of FY24 alongside insights into the power industry.

India’s Power Sector:

India boasts one of the most diverse power sectors worldwide, with an extensive range of electricity generation sources. These sources include traditional options like coal, natural gas, oil, hydro, and nuclear power, as well as sustainable alternatives such as wind, solar, agricultural, and domestic waste. The country’s electricity demand has surged significantly and is expected to continue rising in the foreseeable future. Meeting this increasing demand requires substantial additions to the current installed power generation capacity.

As of 2021, India ranked fourth globally in wind power capacity, solar power capacity, and renewable power installed capacity. Additionally, India stands out as the only G20 member nation making significant progress toward achieving the goals set forth in the Paris Agreement.

Following are the top 5 performing Power stocks of FY24:

1. Inox Wind Energy
   Inox Wind Energy Ltd is involved in the generation and distribution of wind energy, offering services related to the erection, procurement, and commissioning (EPC) of wind farms. Additionally, the company holds strategic business interests in renewable energy.
2. SJVN
   SJVN is involved in electricity generation as its primary business activity. Additionally, the company provides consultancy services for hydro-power projects.
3. Waa Solar
   Waa Solar Ltd specializes in solar power generation and transmission. It operates as a subsidiary of Madhav Power Pvt. Ltd, which is active in the renewable energy, infrastructure, and real estate sectors. Waa Solar Ltd undertakes solar power generation through the establishment of Solar Power Projects and investments in Special Purpose Vehicle companies engaged in similar activities. Additionally, the company is planning to initiate Engineering, Procurement, and Construction for solar projects.
4. Reliance Power
   Reliance Power is established with the aim of developing, constructing, and operating power projects both within India and internationally. The company, along with its subsidiaries, possesses a significant portfolio of power generation capacity, including operational capacity and capacity currently under development.
5. Adani Power
   Adani Power (APL), a segment of the diversified Adani Group, holds the position of being the largest private thermal power producer in India. Together with its subsidiaries, the company distributes power generated from its projects through a mix of long-term Power Purchase Agreements, Short-term PPAs, and on a merchant basis.

Outlook:

In the coming decade (2020-29), the Indian electricity sector is poised for significant transformation in demand growth, energy mix, and market operations. India aims to ensure reliable access to ample electricity for all while accelerating the transition to cleaner energy sources, reducing reliance on fossil fuels, and embracing renewables. Future investments will capitalize on robust demand, policy backing, and heightened government focus on infrastructure.

According to the Central Electricity Authority (CEA), India’s power requirement is projected to reach 817 GW by 2030. By 2029-30, CEA forecasts renewable energy generation to rise from 18% to 44%, while thermal energy’s share is expected to decrease from 78% to 52%. The government aims to establish a renewable energy capacity of 500 GW by 2030.

Conclusion:

In summary, India’s power sector is undergoing a significant transformation, exemplified by the top-performing stocks in FY24. With diverse energy sources and ambitious renewable energy targets, the country is poised for sustainable growth. As electricity demand rises and renewables gain prominence, the sector presents promising investment opportunities. India’s focus on universal access to electricity and cleaner energy underscores its commitment to a greener future, offering potential for innovation and contributing to energy security and environmental sustainability.

Disclaimer:This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.