Best Green Hydrogen Stocks in India

22 March 2024
9 min read
Best Green Hydrogen Stocks in India
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(The stocks mentioned in the blog are as per Analyst Ratings and Market Capitalization)

The green hydrogen energy stock industry of India is aiming to achieve energy independence by 2047 and reach net zero emissions by 2070. To meet these ambitious targets, India is increasingly embracing green hydrogen energy.

This eco-friendly and sustainable fuel source is expected to play a crucial role in reshaping India's energy landscape. In this blog, you will learn about the best green hydrogen stocks in India, which are contributing to a cleaner and more sustainable future. 

Green Hydrogen Industry in India - A Brief Overview

The green hydrogen sector in India is rising as the country aims for energy independence in the next couple of years. Green hydrogen is produced via electrolysis, where renewable energy such as solar and wind power is used to split water into hydrogen and oxygen. This creates a clean fuel that can replace fossil fuels, reducing pollution.

The demand for green hydrogen is growing fast as it has the potential to decarbonise sectors including transportation, shipping, and steel production. It can replace traditional fuels in vehicles and industry, and serve as a backup for renewable energy sources. With its various uses, green hydrogen can power vehicles, heat buildings, and make chemicals and fertilisers.

India launched a National Green Hydrogen Mission in 2022 and set a target of 5MMT production capacity of green hydrogen annually with an additional renewable energy capacity of around 125 GW. Moreover, the Union Budget of FY 2024-25 has allocated a budget of ₹600 crore, leading to a 102% increase from the previous budget of  ₹297 crore.

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Best Green Hydrogen Stocks in India 2024 as per Analyst Ratings

The following table represents the best green hydrogen stocks in India in 2024 as per analyst rating. We have chosen analyst rating as a criterion here as analysts run a comprehensive market study before rating a stock-

S.No.

Best Hydrogen Stocks in India (as per analyst ratings)

BUY Analyst Rating (in %)

1.

National Thermal Power Corporation (NTPC)

94

2.

Larsen & Toubro

94

3.

Reliance Industries

78

4.

Oil & Natural Gas Corporation (ONGC)

71

5.

GAIL (India)

67

*Our stock selection criteria for top stocks based on analyst ratings are mentioned at the bottom of this blog.

Top Green Hydrogen Stocks in India in 2024 as per Market Capitalisation

The following table provides a list of top green hydrogen companies stocks in India as per market capitalisation:

S.No.

Best Green Hydrogen Sector Stocks in India (as per market capitalisation)

1.

Reliance Industries

2.

Larsen & Toubro

3.

Oil & Natural Gas Corporation (ONGC)

4.

National Thermal Power Corporation (NTPC)

5.

Adani Green Energy

*Our stock selection criteria for top stocks based on Market Capitalisation are mentioned at the bottom of this blog.

Overview of Best Green Hydrogen Stocks in India as per Analyst Ratings

The following provides a brief overview of the green hydrogen stocks listed above as per analyst ratings:

1) National Thermal Power Corporation (NTPC)

National Thermal Power Corporation (NTPC) is one of India’s leading power-generating companies in India that was founded in 1975. It primarily generates and sells bulk power to the State Power Utilities of India.

The company has a capacity of over 75,000 MW, which plays a vital role in driving India's economic advancement. Its installed capacity comprises 27 coal-based stations, 15 solar PV projects, 7 gas-based stations, 1 hydro station and 1 small hydro station. 

Additionally, it provides e-mobility solutions, consultancy services, project management, and supervision. By 2032, the company aims to become India's largest integrated power company, with an installed capacity surpassing 130 GW. It targets achieving this by diversifying its fuel mix and increasing its generation capacity to 600 billion units.

2) Larsen & Toubro

Headquartered in Mumbai, Larsen & Toubro Limited stands as one of India's largest multinational companies, involved in hi-tech manufacturing, engineering, procurement and construction (EPC) projects and services.

The company offers a wide range of services, including hydraulics, hydrocarbon, rubber processing machinery, shipbuilding and valves. Additionally, it manufactures and distributes construction and mining equipment, as well as products for electricity distribution and control. 

L&T also provides various finance-related services such as wholesale finance, rural finance, housing finance, general insurance, infrastructure finance and related advisory services. It operates in more than 50 countries globally. Its strong focus on customers and continuous pursuit of top-quality standards have enabled it to achieve and maintain leadership in its key business areas for over 8 decades.

3) Reliance Industries

Reliance Industries is one of India's largest manufacturers of green hydrogen. The company's green hydrogen is used for domestic consumption and global sales, contributing significantly to reducing carbon emissions. Moreover, this company uses both green hydrogen and CO2 as raw materials to create a plan for developing new green chemicals, fertilisers, and e-fuels. 

Furthermore, Reliance Industries plans to leverage its solar and wind energy storage to enable large-scale production of green hydrogen. The company plans to invest a significant ₹75,000 crore in green hydrogen production over the next couple of years.

They are currently setting up a 1 GW green hydrogen facility in Jamnagar, Gujarat, aiming to make it operational by 2025. 

4) Oil & Natural Gas Corporation (ONGC)

ONGC, a Maharatna company, stands as India's largest producer of crude oil and natural gas, contributing approximately 71% to the country's domestic production.

The company focuses on exploring, developing and producing crude oil, natural gas and value-added products within India. Furthermore, it engages in downstream activities such as refining and marketing petroleum products, as well as ventures into petrochemicals, power generation, LNG supply, pipeline transportation, SEZ development and helicopter services. 

Geographically, its operations span across India, both offshore and onshore, as well as outside India. ONGC aims to elevate its share in India's hydrocarbon consumption from the current 22% to 27% by 2030. Moreover, ONGC has set a target to double its oil and gas production from both domestic and overseas fields by the year 2040.

5) GAIL (India)

Established in 1984, GAIL (India) Limited was formed as a Central Public Sector Undertaking (PSU) under the Ministry of Petroleum & Natural Gas (MoP&NG).

It operates in various segments, including transmission services, natural gas marketing, petrochemicals, LPG and liquid hydrocarbons and other segments. The transmission services segment deals with natural gas and liquid petroleum gas (LPG). 

On the other hand, the other segment includes GAIL Tel, City Gas Distribution (CGD), power generation, exploration and production (E&P). Moreover, GAIL engages in sourcing and trading natural gas, producing LPG, liquid hydrocarbons, and petrochemicals, as well as transmitting natural gas and LPG through pipelines. Additionally, it is expanding its presence in renewable energy sectors such as solar, wind and biofuel.

Factors to Consider Before Investing in Green Hydrogen Stocks in India

Before you invest in green hydrogen companies in India, consider these key factors:

  • Government Policies and Incentives

Before investing in green hydrogen stocks in India, you should monitor government policies related to renewable energy, including the National Green Hydrogen Projects. You should also consider potential incentives and subsidies available to green hydrogen companies.

  • Technological Advancement

Companies involved in green hydrogen often invest in advanced technologies, including cutting-edge electrolysis techniques, effective storage solutions and scalable production methods. These innovations reflect the commitment of hydrogen fuel companies in India to drive progress within the green hydrogen sector.

  • Market Demand and Growth Potential 

Considering the market demand for green hydrogen stocks in India and their growth potential is crucial. Therefore, you should research the potential demand for green hydrogen and assess the long-term prospects of green hydrogen companies in the country.

  • Financial Performance

Assessing the financial performance of green hydrogen companies in India is vital before you invest. So, make sure to examine the company's financial statements, including revenue growth, profit margins and cash flow to make a well-informed decision.

Should You Invest in Green Hydrogen Stocks?

When considering investing in green hydrogen stocks, it is essential to understand the challenges ahead in the industry. There are concerns about the high costs associated with producing green hydrogen due to the technology involved in the electrolysis process. However, advancements in technology and increasing demand are expected to drive cost reductions over time, making it more affordable. 

On the other hand, the infrastructure for storing, transporting and distributing green hydrogen remains underdeveloped. This gap presents an investment opportunity, potentially leading to job creation and economic growth. Despite competition from cheaper fossil fuels, increasing awareness of their environmental impact may increase the demand for green hydrogen in the long run.

Therefore, before considering investment in green hydrogen stocks, conducting comprehensive research and staying updated with industry developments is crucial.

The Bottom Line 

The green hydrogen stocks in India offer a promising opportunity for you if you want to align your investment portfolios with sustainable and eco-friendly ventures.

While the sector faces challenges such as high production costs and infrastructure limitations, it is positioned for substantial growth driven by technological advancements and increasing demand.

By staying informed and conducting thorough research, you can seize the opportunities presented by the evolving green hydrogen industry while contributing to India's transition to cleaner energy sources.

*Stock Selection Criteria for Top Stocks Based on Analyst Rating

Investors must carefully read through the following information on stock selection criteria while running through the stocks based on analyst ratings-

These stocks have been shortlisted as per Analyst ratings provided by the I/B/E/S (The Institutional Broker’s Estimate System) database, further aggregated by Refinitiv. Ratings are determined by analysts' forecasts of company performance, taking into account metrics like earnings per share, sales, and net income. These ratings should not be construed as investment advice/recommendations/offer/solicitation of an offer to buy/sell any securities by Groww Invest Tech Pvt. Ltd. (formerly known as Nextbillion Technology Pvt. Ltd.).  

Before investing, investors must conduct independent research and not solely rely on the information provided here. This will allow investors to make appropriate investment decisions based on their financial goals, investment objectives and risk tolerance.

*Stock Selection Criteria for Top Stocks Based on Market Capitalisation

These stocks are chosen based on their market capitalization, which represents the total value of a company's outstanding shares. The selection is arranged in descending order, placing the largest companies first and the smaller ones later. This helps prioritize stocks based on their market size. 

It is important to note that market capitalization in no way guarantees a company’s performance or the returns from its stocks. However, it can be used as a criterion for shortlisting companies from within a sector. Investors should recognize that other factors, such as financial health, management efficiency, and market trends, play crucial roles in determining the actual success of an investment. 

This stock selection should not be construed as investment advice/recommendations/offer/solicitation of an offer to buy/sell any securities by Groww Invest Tech Pvt. Ltd. (formerly known as Nextbillion Technology Pvt. Ltd.).

Disclaimer: This blog is solely for educational purposes. The securities/investments quoted here are not recommendatory.

To read the RA disclaimer, please click here
Research Analyst - Aakash Baid

Disclaimer

The stocks mentioned in this article are not recommendations. Please conduct your own research and due diligence before investing. Investment in securities market are subject to market risks, read all the related documents carefully before investing. Please read the Risk Disclosure documents carefully before investing in Equity Shares, Derivatives, Mutual fund, and/or other instruments traded on the Stock Exchanges. As investments are subject to market risks and price fluctuation risk, there is no assurance or guarantee that the investment objectives shall be achieved. Groww Invest Tech Pvt. Ltd. (Formerly known as Nextbillion Technology Pvt. Ltd) Ltd. do not guarantee any assured returns on any investments. Past performance of securities/instruments is not indicative of their future performance.
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