Hot climate is an inseparable part of Indian geography and is reflected in our cultural aspects. However, in the wake of depleting fossils and the energy crisis, it is a blessing in disguise. Solar prowess, which is naturally adorned to India due to its near-to-equator position, has the potential to suffice the energy needs of its large population..
As of October 2024, 92.12 megawatts (MW) of solar power is generated in India, and the future prospects for the industry are bright. Corporates have played a significant role in this journey. Ultimately, this growth benefits the investors in such companies. Investors with low investment corpus can also unleash this benefit. Explore some of the best solar penny stocks to buy now in India.
Also, read about Top Renewable Energy Stocks to Invest in India for 2024
India: A solar energy hub!
The Indian solar industry in India has shined like a bright star, and as of September 2024, it accounted for 45% of the total renewable energy. Moreover, government schemes like ‘PM Rooftop Yojana’ have widened its reach.
Due to government support and corporate bullish sentiment for the industry, the solar power capacity has increased over the years.
| Year | Solar capacity addition (in gigawatts) |
| FY 2021 | 5 |
| FY 2022 | 14 |
| FY 2023 | 13 |
| FY 2024 | 15 |
In FY 2025, this capacity addition will exceed 10.12 GW. Currently, there are 7 states in India with stable solar policy. Investors can become a part of this growth by investing in stocks which have lower prices. These are also known as penny stocks.
Dive deeper into the topic: Penny stocks
Best solar penny stocks in India
The solar stocks mentioned below are operating in the core solar industry and are priced low in the market as of November 26, 2024. Some of the solar penny stocks in India are as follows:
# NHPC Ltd
It is also known as the National Hydroelectric Power Corporation (NHPC). The company is a public sector entity and has maintained sound financials in the past few years. It mainly operates in hydroelectric power generation but has recently expanded towards solar energy. It has started solar projects in Rajasthan in February 2024. As of November 26, 2024, its shares are trading ₹81.3. The commissioned solar plant is yet underutilised by nearly 65%, and investors may find it an attractive aspect for investment.
# Suzlon Energy Ltd
It is one of the most popular renewable energy sector brands in the nation. The suzlon energy ltd company’s shares are trading at ₹63.6 as of November 26, 2024. It provides regular solar and turnkey solar wind solutions. The company has reduced its debt significantly in recent years. It has a strong client base in the form of ACC, Bajaj, Hero, Tata, etc. However, its promoter holding is reducing, and investors may be concerned about the same.
# Surana Telecom and Power Ltd
Established in 1984, the company earns its major revenue from solar services as of FY23. It trades related products and generates solar energy. Its shares are priced at ₹19.2 as of November 26, 2024. One of the key attractions for this company is agreements with state electricity distribution companies. The entity had poor sales growth for the past few years but is almost debt-free.
# Waa Solar Ltd
It is the youngest company in this cohort of best solar penny stocks in India. Being a subsidiary of Madhav Power Pvt Ltd, the company has undertaken solar projects specifically in Gujarat and Madhya Pradesh. The stock price for each of this company is ₹132 as of November 26, 2024. It mainly operates in the generation and transmission of solar power. However, the company’s operating cash flow was reduced in March 2024. Investors should thoroughly analyse before investing.
# India Power Corporation Ltd
The company is mainly operating in the renewable energy area but has established Asia’s first grid-connected solar power plant with a 5 MW capacity. Also, it is seeking to promote rooftop solar installations. Its share price is trading at ₹16.7 as of November 26, 2024. The company is paying a healthy dividend but has delivered poor sales growth.
Comparative analysis
| Particular(Amount in ₹ crores) | NHPC Ltd | Suzlon Ltd | Surana Energy Ltd | Waa Solar Ltd | India Power Corp Ltd |
| Revenue | 9789.7 | 7881.6 | 19.8 | 17.4 | 630.3 |
| Net Profit Margin | 41.9% | 11.1% | 16.7% | 25.1% | 2.6% |
| Operating Profit Margin | 49.9% | 15.9% | 49.2% | 69.2% | 6.6% |
| P/E* (in times) | 27.4 | 87.1 | 26.2 | 134.6 | 91.4 |
| Networth | 40,148.9 | 4,495.3 | 139.2 | 179.8 | 1110.1 |
*P/E: Price to Earning Ratio
Are penny stocks only risky?
Investors perceive penny stocks to be only risky. However, they are accompanied by several advantages, such as diversification, multiple entry-exit points, potential valuations, etc. Investors willing to bear the volatility can analyse such stocks holistically to make an investment decision.
Bottomline
The solar industry has gained significant limelight in recent years. Investing in this industry in such a period may be potentially beneficial for the investors. Penny stocks can be one of the alternatives for the same. Explore some of the best penny stocks of the solar industry in India in this article.
Must read: Top solar energy stocks to watch
FAQs
- Why is the solar industry profitable in India?
India’s geographical setting is one of the biggest powers adorned by nature. It favours ample sunlight, and it further helps in the generation of solar energy. However, previously lack of required technology was a hurdle. Due to the overall push, this challenge has been overcome, and India is profitable with its solar energy.
- Is it a good time to invest in solar stocks?
While investing in solar stocks, investors need to consider a holistic picture as it can be a crucial raw material with correct application. As of 2024, many government incentives, private corporate efforts, startups and household adaptation are contributing to the success of solar energy. However, the industry has long term scope, and investors can unleash value for their folios with such investments.
- Who should invest in renewable energy stocks?
For ages, due to the scarcity of fossils, renewable energy was needed. However, in modern times, this need is underscored. Its adaptation is accompanied by many advantages and disadvantages. The process may be long-term. Therefore, it may be a suitable and value-additive investment for investors with a long-term outlook and patience.
- Do penny stocks earn higher returns?
Penny stocks, which are undervalued by the market forces and their companies are efficient, may earn potential returns in the long-term. However, not all penny stocks stand true for this situation and volatility along with the risk of investment loss may lurk over these stocks.
- Which are the solar penny stocks in India?
The solar industry can be a potential investment avenue in the wake of modern renewable energy attraction. Some of the penny stocks of this industry are Suzlon Energy, India Power Corp, NHPC, etc. Investors with low investment corpus can invest in these to get diversification for their portfolios.
