Renewable energy stocks have been rewarding their shareholders handsomely over the last one year. This surge in performance can be attributed to robust order wins stemming from the government's renewable energy initiatives.
The country has huge ambitions in energy transition and plans to have 500 GW of non-fossil-based electricity installed capacity by 2030, so that fuel comprises 50% of the installed capacity mix by 2030.
The installed electricity generating capacity in the country at present is 417 GW, comprising of 179 GW from non-fossil fuel sources, which is about 43% of the total installed electricity generating capacity, according to the Ministry of Power.
Over the past year, six stocks in the renewable energy sector have shown remarkable growth, with returns ranging up to an impressive 336%. Leading the pack is Waaree Renewable Technologies, the solar EPC subsidiary of Waaree Group, which experienced a staggering rally of 336%, with its stock price appreciating from ₹322 to ₹1,404.
The company is primarily engaged in the business of renewable energy solutions, with a specific focus on solar power. It operates as a solar Engineering, Procurement, and Construction (EPC) company. It is also a solar developer that finances, constructs, owns, and operates solar projects.
Suzlon Energy is next on the list. The company, which is the largest renewable energy solutions provider in India, saw its shares climb from ₹7.25 apiece to ₹18.50 in the last one-year period, resulting in a staggering gain of 155%.
The surge in Suzlon Energy's stock price over the last one-year can be attributed to a combination of factors, including the successful acquisition of multiple wind power projects coupled with a robust financial performance.
KPI Green Energy was another stock that rallied over 100%. The stock has witnessed a remarkable bull run over the last one year, surging from ₹336.35 apiece to ₹797.75, producing a phenomenal return of 137%.
|% one year return
|Waaree Renewable Technologies
|KPI Green Energy
|Sterling and Wilson Renewable Energy
Similarly, Inox Wind shares have soared 111%, demonstrating a stellar upward trajectory in the last one year, whereas from a 52-week low of ₹77.4 apiece, the shares are up by nearly 133%.
The company is upbeat on recent policy changes in the sector and believes the government’s renewed thrust on adding capacities in India would help the company turn around its profitability.
Through its current order book of 1,370 MW, Inox expects to execute 500 MW and 600 MW of projects in FY24 and FY25 to garner a 10% and 15% EBITDA margin in FY24 and FY25, respectively, said brokerage firm Systematix Institutional Equities.
Likewise, SJVN shares have been riding high on Dalal Street, buoyed by a series of significant order wins and strategic partnerships. From its July 2022 trading price of ₹28.70, the stock has zoomed to the current level of ₹55.10, generating a return of 92%.
The company is engaged in the construction and operation of hydropower plants and thermal power plants. It also participates in renewable energy projects such as wind power and solar power, along with exploring opportunities in new and emerging technologies like battery storage, electric vehicles, green hydrogen/ammonia, and hydrogen cell storage.
SJVN is committed to achieve 25 GW of generation capacity by the end of the current decade, more than half of which is bound to come from renewable resources.
Sterling and Wilson Renewable Energy shares have soared 39% in July alone after the company's gross profit in the June quarter (Q1FY24) turned around after nine quarters, beating Street expectations on the back of the execution of new profitable orders.
The company narrowed its losses to ₹95.32 crore in Q1, compared to a loss of ₹355.99 crore in the year-ago period. Post the Q1 results, domestic brokerage house Nuvama retained its 'buy' call on the stock with a target price of ₹454, indicating an upside of 17.35% from its current market price of ₹386.90.
Meanwhile, in the last one year, the company's shares have risen from ₹301.50 apiece to ₹386.90, resulting in a gain of 28.35%.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.