Which renewable energy, battery stocks you should buy?

In fact, in order to reduce dependency on volatile crude oil and curtail imported inflation,along with electric vehicles, renewable energy, now green hydrogen is a huge bet. Green Hydorgen is considered as cheaper alternative to oil-gas. that’s why the central government and companies are focusing a lot on green hydrogen. India has 2070 as a year to become carbon neutral <Alpha 5 out>

However, as the economy is growing, the demand for energy will increase. In last 2 decades the energy demand in India has doubled. By 2030, it is expected to increase at least 25% more. India imports around 40% of its energy needs and more than $90 bn is spent on it.

Besides this, transportation and manufacturing sector has a huge dependence on fossil fuels. They are mostly imported. Hence there is a need of technology that will increase share of renewable sources in energy consumption and reduce the dependency on fossil fuels.

Keeping this in mind, this year in budget the government allocated  Rs 19,744 crore for FY24 to FY30 for National Green Hydrogen Mission. Government aims that by 2030, green hydrogen annual production should reach 50 lakh tonnes, so that fossil fuel dependency can decrease <Alpha 8 out>

Besides this, Chetan also read that as per energy Conversation Act, government is considering to make buying green power mandatory. That’s because by year 2030, it wants renwable energy to occupy more tham 40% share in total consumption. It is expected that demand for renewable energy may lag the estimates still it is likely to show increase. Besides this, Chetan read the report by S&P Global Ratings, which stated that in 2022 EV penetration in India was just 1.1% and it is very low as compared to Asia. Average EV peneration in Asia is 17.3%.

The Indian government expects that by 2030, EV penetration in India should reach 30%.  However, in next 2 years battery capacity of 50 giga watts is expected to be developed.  This will help companies like Exide, Amara Raja, Greaves Cotton.

Now the, question is which other companies are in business related to renewable energy, green hydrogen and batteries.

In India currently Adani Green Energy, Sterling and Wilson Renewable Energy, Tata Power, Inox Wind and Suzlon Energy, NTPC are major companies for wind energy. In the green hydrogen space,  ONGC, RIL, BPCL, IOC, Jindal Stainless, JSW Energy, Adani Green, GAIL, ABB, Simens and L&T are major names. While in setting up battery both Adani and Ambani groups are investing in huge amount.

Now the main question for Chetan is which company is good for next 6 – 12 months perspective.

Swastika InvestMart’ head of reasearch, Santosh Meena says that you can allocate 5-10% of your portfolio in companies related to renewable energy, green hydrogen and batteries <GFX 4 out>

If you want to invest only in this sector then you can allocate 70-75% capital in names like Tata Power, Tata Motors, Tata Chem, RIL, Carborundum Universal, L&T, Ami Organics, Inox Green while 20-25% can be allocated in companies such as Suzlon, Ion Exchange, Waaree Renewable, Olectra Greentech, JBM Auto, where risk is somewhat higher. <GFX 5 out>

So, for next 6-12 months, renewable energy, green hydrogen and batteries are a good theme. It is better to invest most of your capital in big names from this space as that will reduce risk.

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