Solar stocks do even better, with returns of up to 1,318% in one year. Who leads the running of the bulls?
Small solar company Waaree Renewable Technologies was the biggest gainer in the solar sector with an impressive 1,318% annual return, followed by 561% gains in WAA Solar, 393% in Zodiac Energy, and 236% in SJVN.
Other top multibaggers in the list include KP Energy, Adani Power, BF Utilities, Orient Green Power, CESC and JSW Energy.
Why solar stocks?
As the world transitions to renewable energy sources, solar has overtaken wind to become the largest new power source on the global map for the second year in a row. Home country India is also on the cusp of transitioning from a fossil fuel focus to a green energy ecosystem, creating 340 GW of green energy capacity by 2030 with an expected expenditure budget of Rs 20 lakh crore. India’s solar power generation has increased significantly over the past two decades, from 0.01 TWh in 2000 to 113 TWh in 2023. India will now overtake Japan to become the world’s third-largest solar power plant by 2023. It showcases the contribution to electricity from Ember.Solar, a global energy think tank. India’s power generation increased from 0.5% in 2015 to 5.8% in 2023.
“This has been a very well-played topic and given the government support for solar panels, green energy and EVs, I think this story will continue to be in the limelight for at least another two to three years. So the best thing to really look at is within large-cap stocks. The choices are Reliance Industries, Tata Power and Adani Green,” says independent market expert Hemang Jani.
HDFC Securities recently recommended Tata Power as a long-term composite while Yes Securities has assigned a buy rating to Sterling and Wilson Renewable Energy with a target price of Rs 900.
“With the company’s (Sterling & Wilson) turnaround, significant deleveraging of its balance sheet, strong order pipeline and strong orders expected for next year, we are optimistic about the potential for a re-rating of the stock from its current position.” Securities said.
With increased domestic manufacturing and new government stimulus, solar panel manufacturing companies are gaining investor attention. The government’s Pradhanmantri Suryodaya Yojana (PSY), which aims to install rooftop solar power systems in 10 million households in India, could also be a significant opportunity for the creation of solar players.
“On the corporate side, the biggest beneficiaries are expected to be players engaged in panel manufacturing (Waaree Energies/Renewables, Premier Energies, Insolation), followed by inverters (V-Guard, Havells) and wires (Polycab, RR Kabel, Finolex) players are expected to follow, V-Guard), batteries (used in a few off-grid solar power systems) and metering (HPL, Genus Power),” said Achal Lohade of JM Financial.
(Data: Ritesh Presswala)
(Disclaimer: Recommendations, suggestions, views and opinions provided by experts are their own. They do not represent the views of The Economic Times.)
