One of the greatest diversification strategies that investors could go for is selecting stocks from different sectors of the economy. The major sectors attracting the attention of investors have always been technology, financial services, and consumer goods. However, the pace at which the energy sector has grown as a magnet for investors has been nothing short of amazing.
If you yearn to take advantage of all the opportunities that this sector generates and reap all you can from its growth value, you should keep up with all the latest trends in this industry. Fusion of this and knowledge of the top energy stocks in focus can be useful in making investment decisions related to the energy sector in 2024.
Samco Securities has developed a smart application that is integrated with an intuitive feature, whereby investors aspire to identify the top stocks in any given sector, and this feature is stock ratings. Let’s understand the investment avenues in the new year with the help of sector and Samco stock ratings.
Expected growth of investment in the energy sector
The power sector was partly neglected in the earlier budgets although other sectors received a lot of capital infusion. The budget for 2024, however, sees the energy sector being prominent. While speaking recently at the India Energy Sector Week (IEW) earlier in February, Prime Minister Narendra Modi again reminded the energy sector’s significance as India plots its course of climbing the ladder to become the third largest economy in the world.
Meanwhile, given the forecast energy Sector demand growth by at least two times in 2045, the time has come to make more such investments in this sector. In the next five to six years India’s energy sector is slated to attract investments to the tune of $67 billion.
Increasing Importance Placed on Renewable Energy
The bulk of the capital allocated to the energy sector will in the first place be spent on the creation of new renewable energy sources. All over the world sustainability is beginning to be identified as a powerful tool towards a brighter future where nature will be our greatest ally. Unlike many other countries, India is not lagging in the race to achieve carbon neutrality, and in this regard, the renewable energy sector is vital in this process.
According to a study conducted by the EY-CII (P), the investments targeting this sector will amount to about $250 billion. The investment is supposed to be able to speed up the shift to clean green energy Sector like solar, wind, or hydroelectric power instead of conventional fossil fuel-based energy sources.
The National Green Hydrogen Mission was launched in Jan’2023 which has a budget of more than ₹19000 crores, and was given a green signal by the Union Cabinet. In July in the year of 2023, SECI, the Solar Energy Sector Corporation of India, received bids to generate incentives to produce 4.5 lakh tonnes of green hydrogen on an annual basis.
This is accompanied by many advances in the renewables sector, while wind energy is taking center stage, in particular, focusing on the company called Suzlon Energy (NSE: SUZLO).
Renewable Energy Stock in Focus: How We See It: An Assessment of Suzlon Energy Share Value
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The company traces its origin back to Suzlon Energy Limited’s establishment in India in 1995 and is now one of the prominent corporations in the global renewable energy industry. Established by Tulsi Tanti, it was a business that was driven by a mission to take care of energy Sector security issues and environmental challenges of that time.
Since then, Suzlon has made impressive progress and is now regarded as one of the major players in the wind energy sector. Nowadays, the brand operates as a wind turbine generator designer, manufacturer, and maintainer.
With sustainability issues growing in focus, Suzlon Energy’s share has been in investors’ sights for a few years now. Suzlon Energy is one of the most speculative penny stocks in the market today, however, its market value as single and double-digits wasn’t that way.
Peaking at Rs.400/- by the end of 2008, the company’s share price looks set to decline dramatically as the more severe events unfolded. Yet, the financial crisis of 2008, which was severe for the European and American markets negatively affected the firm’s activities leading to losses of more than 300%.
At one stage, Suzlon Energy stock also dropped along with its profits, almost to ₹50 and then to some extent lower leaving it as a penny stock — a status the company holds even today. A wage freeze, recruitment restrictions, and staff reductions were the main measures put in place in a bid to cut staff expenditure.
This was coupled with mounting debts that the company could hardly keep up with. The shares of Suzlon Energy were unsuccessful in breaking their stagnant levels despite the periodically weak recoveries, and they remained constant from 2008 to 2023. In other words, the share value of Suzlon Energy did not leap from 2008 to early 2023.
The renewable energy challenger has defied all odds in the last few years to cut its debt footprint. Long-term debt in particular decreased from rupees 6,027 crore in FY21 to rupees 5,592 in FY22, and it fell to rupees 1,517 in FY23. The fast reduction in this debt with India looking to green energy as the future has proven to be positive for the share value of Suzlon Energy.
Investors seem to be watching the stock with a measure of skepticism or cautious positivity that it might deliver multi-bagger returns in the future as it did in the past. During the two-quarters of June–December 2023, Suzlon Energy’s share value rose more than 270%. As we look even further back, the company’s stock has increased by more than 500 points in the last two years and more than 1,100 in the last three.
Other Top Renewable Energy Stocks worth watching for the year 2024 include
Additionally, Suzlon Energy’s share price is not the only public company that investors who are interested in the energy sector in India would be watching. For investors that would like to diversify their portfolios and enrich with stocks from the energy sector this year, here are the leading companies that tend to attract the interest of stock investors.
SG Mart
The company, formerly known as Kintech Renewables Limited will concentrate on the generation of energy via renewable sources like solar and wind. The company has seen tremendous growth over the past couple of years and its stock price has gone up to almost 58 times that of its value in November last year.
Tata Power
Tata Power, a Tata Group’s legendary company, is India’s largest power utility firm. Being the leader of renewable energy, the enterprise is in the vanguard of the Indian energy transition movement, having a variety of solar and wind power generating facilities. The latest share price surge of the company was after the budget sessions which included the agenda of the solar rooftop scheme.
The Indian Renewable Energy Dev Agency Ltd (IREDA)
IREDA is an organization that champions the adoption and spread of renewable energy in India. IREDA is under the purview of the Central Government. The mission it is is a vital element to the realization of India’s renewable energy goals and the expansion of green energy systems. As it is with most renewable energy stocks IREDA too rose by 5 % after the presentation of the interim budget 2024.
Websol Energy
Websol Energy is a big player in the solar energy industry that focuses on the production and selling of the highest efficiency photovoltaic ife. The organization is based on the use of the sun for energy to give both green and sustainable power in India. The days that follow the interim budget are the ones in which Websol cemented its position as the renewable leading energy as the stock rallied.
- Make Informed Stock Decisions with Stock Ratings getting better from Samco
Although the market can be tempting in pushing you to invest in a few stocks based on their enthusiasm, you should not underestimate the need for you to further conduct research and develop your opinion on the stocks you are looking at. Samco Securities can help you out with that, especially with the unique stock ratings that you can access from the Samco trading app.
The Samco Stock Ratings provides 1-5 star ratings for each stock using 20 mln data points generated in the process of analyzing 50+ technical and fundamental parameters. The sample is coupled with elaborate research notes that are further discussed in the commentary. Combined, such standpoints create the basis for well-grounded decisions about investing in the energy Sector market in 2024.
