Best Energy Stocks in India 2024 (2024)

Best Energy Stocks in India 2024 as per Analyst Ratings

The table mentioned below mentions the best energy stocks in India according to analyst ratings. We have opted to take this as a criterion as analysts rate a stock after conducting a complete analysis of the stock market-

Top Energy Stocks in India in 2024 as per Market Capitalisation

The following table mentions the leading energy sector stocks list in 2024 as per market capitalisation:

Overview of Best Energy Stocks in India as per Analyst Ratings

Here is a comprehensive overview of the best energy sector stocks in India based on analyst ratings mentioned above:

1) NTPC

Founded in 1975, NTPC stands as one of India's foremost power-generating companies. It focuses on generating and distributing bulk power to state power utilities across India. NTPC owns 51 stations, including 27 coal-based, 7 gas-based, 1 hydro, 1 small hydro and 15 solar PV stations. Additionally, it has 42 Joint Venture/Subsidiary stations, comprising 9 coal-based, 4 gas-based, 8 hydro, 1 small hydro, 16 solar PV and 4 wind stations.

By 2032, almost half of NTPC's power generation capacity will come from non-fossil fuel sources. It aims to become India's largest integrated power company with a non-fossil fuel-based generation capacity constituting nearly 50% of its portfolio. To achieve this, NTPC plans to diversify its fuel mix and increase its generation capacity to reach 600 billion units.

2) Reliance Industries

Reliance Industries Limited is involved in various sectors including petroleum refining and marketing, hydrocarbon exploration and production, petrochemicals, advanced materials and composites, renewables (solar and hydrogen), retail and digital services. The company operates through segments such as Oil and Gas, Retail, Oil to Chemicals (O2C) and Digital Services.

The Oil and Gas segment focuses on exploration, development and production of natural gas and crude oil. The Retail segment includes services related to consumer retail. The O2C segment covers refining, petrochemicals, aviation fuel, fuel retailing and wholesale marketing. It also includes the transportation of fuels, polymers, polyesters and elastomers.

3) Oil & Natural Gas Corporation

Founded in 1993, Oil and Natural Gas Corporation Limited (ONGC) is an Indian company that contributes 71% to Indian domestic production. ONGC accounts for roughly 70% of India's crude oil and approximately 84% of its natural gas output.

It engages in the exploration, development and generation of crude oil, natural gas, and value-added products within India, as well as acquires oil and gas acreages globally for exploration and production activities.

Additionally, it is involved in downstream activities such as refining and marketing of petroleum products, petrochemicals, LNG supply, pipeline transportation, power generation, etc. Geographically, ONGC operates within India, as well as outside India in around 15 countries.

Its subsidiaries include ONGC Videsh Limited, Mangalore Refinery and Petrochemicals Limited, Hindustan Petroleum Corporation Limited, etc.

4) Power Grid Corp

Headquartered in Gurgaon, Power Grid Corporation of India Ltd (Powergrid) is primarily owned by the government, with a majority share of 51.34%. It holds the prestigious status of being a Maharatna company.

The Power Grid operates as an electricity transmission utility, managing a network of transmission lines and executing power transmission projects.

This company provides services for operations and maintenance of transmission systems, as well as offering smart grid, telecom and consultancy services. Utilising optical ground wire on power transmission lines, Powergrid operates overhead optic fibre networks and employs various technologies to plan, coordinate and deploy transmission networks across India.

Factors to Consider Before Investing in Energy Stocks in India

The following are some important points you must consider before buying energy sector shares in India:

• Fluctuations in Global Oil Prices

Changes in global oil prices have a significant impact on energy sector stocks. Since energy companies deal with oil exploration, production and distribution, fluctuations in oil prices directly affect their revenues and profits.

Higher oil prices typically mean higher profits, while lower prices can result in reduced profits.

• Impact of Government Regulations

Many of India's energy companies are regulated by the government, impacting their stock performance. These regulations aim to ensure environmental protection and consumer safety. For instance, stricter regulations on carbon emissions may require energy companies to invest more in technology compliance, potentially reducing their profitability.

• Influence of Weather Conditions

Weather conditions can affect energy sector stocks, especially in renewable energy. Factors like sunlight availability impact solar power generation, while wind strength affects wind power generation.

Extreme weather events like hurricanes and droughts can disrupt energy supply and damage infrastructure, impacting stock performance.

• Political Dynamics on Energy Stocks

Political factors such as trade policies, geopolitical tensions, and taxation can also influence energy sector stocks. Instability in oil-producing countries may drive oil prices higher, benefiting energy companies.

Conversely, trade restrictions on energy imports or exports can limit growth opportunities for energy stocks.

Should You Invest in Energy Stocks?

Investing in top energy stocks in India can diversify your portfolio, but it is crucial to recognise the challenges associated with this sector. As energy stocks are influenced by various factors like global oil price fluctuations, government policies and geopolitical risks, you should be prepared for potential market uncertainties.

Moreover, environmental concerns present another challenge for energy companies. With increasing pressure to reduce carbon emissions and transition towards renewable energy sources, companies must adapt their strategies to meet their regulatory requirements and reduce risks.

Additionally, tensions with neighbouring countries and supply chain disruptions can impact the operations and profitability of energy companies. It is in your best interest to stay informed about these risks and their potential impact on the energy sector before making investment decisions.

The Bottom Line

Various government policies are driving the growth of renewable energy in India, making energy stocks in India an attractive investment opportunity. Despite the challenges in this sector, investing in the energy stocks in India can diversify your portfolio and align with the transition towards a sustainable future.

All you need to do is stay updated with market dynamics and environmental concerns while investing in the energy sector.