Best power stocks to buy in 2024

Best power stocks to buy in 2024 – SMC Global Securities

Investors are increasingly drawn to India’s Power stocks as the nation electrifies millions of homes and embraces energy-efficient solutions like LED lighting. With a rapidly growing economy, Indian business leaders and investors enthusiastically support the country’s top power sector stocks, reflecting the sector’s promising growth.

What are power stocks?

In the financial realm, power stocks encapsulate shares of companies engaged in the intricate processes of generating, transmitting, and distributing electric power, primarily within the utilities sector. These entities are responsible for crafting electricity through diverse sources like coal, natural gas, nuclear energy, hydroelectric power, wind, solar, and other innovative renewable reservoirs.

Top 10 Power Stocks to Invest in 2024

Here is a list of the top 10 power stocks in 2024 :

  1. Adani Energy Solutions Ltd
  2. NTPC Ltd
  3. Power Grid Corporation of India Ltd
  4. Adani Power Ltd
  5. Tata Power Company Ltd
  6. JSW Energy Ltd
  7. NHPC Ltd
  8. Torrent Power Ltd
  9. Reliance Power Ltd
  10. NLC India Ltd

Overview of Best Power Stocks to Invest in India

Adani Energy Solutions Ltd

Adani Energy Solutions, formerly Adani Transmission, pioneers private-sector power transmission across 14 states in India. With 17,200 km of lines, it’s committed to driving India’s energy shift, emphasising renewable projects and dynamic expansion.

NTPC Ltd

NTPC, India’s top power-generation utility with over 71 GW capacity, is pivotal in supplying 15% of the nation’s electricity. Embracing a greener vision, NTPC leads in renewable initiatives, recently commissioning India’s inaugural green hydrogen blending project.

Power Grid Corporation of India Ltd

Power Grid, India’s top electric transmission company, interlinks power producers and traders. Venturing into EV charging, it allocates Rs 4.8 bn for strategic transmission projects, fortifying grids for renewable sources with a comprehensive Rs 1.8 tn investment plan until 2032.

Adani Power Ltd

Adani Power, a flagship in the Adani Group, holds India’s top private thermal power position with 15,520 MW capacity. Renowned for pioneering coal-based supercritical plants, it secures revenue stability through 81% contracted capacity and strategic power purchase agreements.

Tata Power Company Ltd

Tata Power emerges as India’s dominant energy player, spanning generation, transmission, and distribution with a robust 14 GW capacity. Committed to a clean energy shift, it leads in EV infrastructure, charging stations, and diverse consumer-centric ventures.

JSW Energy Ltd

JSW Energy, core to the JSW Group’s power sector, operates assets across Karnataka, Maharashtra, Nandyal, and Salboni. Anticipating a 9.8 GW capacity by 2024, it strategically reorganises and houses all renewable operations under JSW Energy Neo, facilitating growth in generation, energy storage, and green hydrogen.

NHPC Ltd

NHPC, India’s leading hydroelectric power provider with 7,000 MW capacity, fills regional power gaps. A strategic joint venture with Andhra Pradesh Power Generation Corporation focuses on pumped storage hydropower and renewables, showcasing NHPC’s commitment to sustainable energy solutions.

Torrent Power Ltd

Torrent Power, a major private sector player in India, is a comprehensive power utility. With a diverse 3,721 MW generation capacity, it integrates coal, gas, and renewable plants, employing advanced technologies for efficient power production.

Reliance Power Ltd

Reliance Power, a major force in India’s private power sector, boasts a massive 26,000 MW capacity. Operating across nine states, it embraces a diverse energy mix, offering generators renewable energy credits to encourage green energy utilisation.

NLC India Ltd

NLC India, a swiftly growing power player with 3,000 MW capacity, excels in clean energy solutions. Operating across states, it focuses on solar, wind, biomass, and geothermal energies while promoting green practices through Renewable Energy Certificates.

Latest Performance of Top 10 Power Stocks

Company Name Mar Cap Rs.Cr. ROCE % CMP Debt / Eq

%

ROE % P/E Div Yld %
Adani Energy Solutions Ltd ₹ 1,20,562 10.2 ₹ 1,081 254.7 11.6 103 0.00
NTPC Ltd ₹ 3,31,384 9.83 ₹ 342 141 12.0 17.0 2.12
Power Grid Corporation of India Ltd ₹ 2,66,788  13.1 ₹ 287 142.1 19.6 17.0 3.86
Adani Power Ltd ₹ 2,14,369 15.8  ₹ 556 79.9 44.8 9.19 0.00
Tata Power Company Ltd ₹ 1,21,151 11.7 ₹ 379 141.9 12.6 35.4 0.53
JSW Energy Ltd ₹ 83,048 7.28 ₹ 505 1.38 7.22 50.5 0.40 
NHPC Ltd ₹ 90,857 8.49 ₹ 90.4 73.3 10.8  24.4 2.05
Torrent Power Ltd ₹ 55,230 18.3  ₹ 1,149 0.76 19.6  29.8 1.13
Reliance Power Ltd ₹ 9,052  3.42 ₹ 23.8 159.6 -11.8  0.00 
NLC India Ltd ₹ 32,114 13.5 ₹ 232 1.14 15.5  12.5 1.51

Overview of the Power Industry in Indian Market

India’s power sector is a linchpin for economic growth, constituting 7% of the GDP and engaging a workforce exceeding 2 million. The industry, witnessing explosive growth, is poised to be a primary catalyst for national development.

Fueled by population surge and heightened economic activity, the sector grapples with rising electricity demand, intensifying the challenge of supply shortages. In navigating this energy landscape, the power sector remains pivotal to India’s evolving economic narrative.

Advantages and Risks Associated with Investing in Power Stocks

Stability

Power stocks exhibit lower volatility, providing a stable investment platform.

Income Source

High dividends make power stocks a reliable income stream for investors.

Growth Potential

With India’s expanding power sector, power stocks become compelling long-term investments, aligning with the country’s rising energy demands and economic development.

Government policy fluctuations, costly ventures in new power plants, and unpredictable electricity demand pose challenges in the Power stocks industry. Investors face regulatory uncertainties and financial complexities, impacting stock prices and company profitability.

Why should you invest in Power stocks in India?

Investing in power stocks in India presents a compelling proposition. These stocks, housed within some of the nation’s largest and most stable companies, offer a blend of attractive dividend yields and promising capital growth. Amidst risks, diversifying your portfolio with reputable power stocks provides a prudent approach, aligning with potential long-term gains.

How to start Investing in Power Stocks?

In a simple four-step process, investors can efficiently navigate and execute transactions, enhancing accessibility and efficiency in their power stock investments.

  1. Go to the official website of SMCtradeonline or simply download the SMC Ace app
  2. Open a free demat account
  3. Start investing

Conclusion

In conclusion, investing in the dynamic landscape of Indian power stocks emerges as a strategic move for astute investors. With the nation’s robust economic growth, the power sector stands as a linchpin, offering stability, reliable income streams, and significant growth potential. The highlighted top power stocks for 2024 showcase the industry’s diversity and promise, from renewable projects to thermal power giants.

However, considering regulatory uncertainties and market complexities, navigating potential risks is crucial. Diversification and a meticulous approach can mitigate these challenges, ensuring a well-rounded investment portfolio. To embark on this journey, starting SMC Trade Online’s user-friendly platform offers a seamless entry into the promising realm of power stock investments.

Author: All Content is verified by SMC Global Securities.

Absolute return and Annualized Return in Mutual Fund – SMC Web Story Who Regulates Mutual Funds Industry in India? SMC Web Story Scalp Trading: Indicators and Strategies for Quick Gains-smc-web-story Understanding Scalping Indicator – SMC Web Story Forex Market Timings in India-SMC-web-story Best Insurance Stocks to Buy in 2024: SMC Web Story Best Paper Stocks to Buy in 2024 in India – SMC Web Story Best realty stocks to buy in 2024- SMC web story Top 10 Textile Stocks to Invest in 2024 in India – SMC web story Top 10 Steel Stocks to Buy in 2024 in India – SMC Web Story
Open Free Demat Account