Best Renewable Energy Stocks – Adani Green Energy Ltd Vs NHPC Ltd

Company Overview of Adani Green Energy Limited

AGEL, an Indian holding company, is involved in renewable energy generation and related activities. It specialises in developing, constructing, owning, operating and maintaining large-scale solar power, wind power, hybrid projects and solar parks that are connected to the grid. The company operates in various markets within India, spanning approximately 91 locations in different states. 

AGEL’s power projects are primarily situated in Gujarat Punjab, Rajasthan, Maharashtra, Karnataka, Tamil Nadu, Andhra Pradesh, Telangana, Chhattisgarh, Madhya Pradesh and Uttar Pradesh. Its wind power plants are located in Madhya Pradesh and Gujarat.  

Company Overview of NHPC Ltd

NHPC Limited is an India-based company primarily focused on generating and selling bulk power to various utilities. The company is also involved in project management, construction contracts, consultancy services and power trading. 

The company’s consultancy services cover a range of activities including survey, planning, design, construction, operation, maintenance and renovation of hydropower projects. NHPC’s subsidiaries include Loktak Downstream Hydroelectric Corporation Limited, Bundelkhand Saur Urja Limited, Jalpower Corporation Limited and Chenab Valley Power Projects Private Limited.

The stock performance of Adani Green Energy Ltd

The table below shows the stock performance of Adani Green Energy Ltd over the past 1 year.

The stock performance of NHPC Ltd

The table below shows the stock performance of NHPC Ltd over the past 1 year.

Fundamental Analysis of Adani Green Energy Ltd

Adani Green Energy Ltd is a prominent player in the renewable energy sector in India. Established in 2015, the company focuses on generating power from renewable sources such as solar and wind energy. With a significant portfolio of projects, Adani Green aims to contribute substantially to India’s green energy goals and reduce the nation’s carbon footprint.   

The stock, trading at ₹1,312.80, reflects a market cap of ₹2,07,951.78 crore. Despite a strong 5-year CAGR of 60.11%, it is 65.61% below its 52-week high. Its 1-year return is 16.82%, with a 5-year average net profit margin of 7.01%.

• Close Price ( ₹ ): 1312.80
• Market Cap ( Cr ): 207951.78 
• Book Value (₹): 17448.00
• 1Y Return %: 16.82
• 6M Return %: -35.58
• 1M Return %: -18.30
• 5Y CAGR %: 60.11
• % Away From 52W High: 65.61
• 5Y Avg Net Profit Margin %: 7.01 

Fundamental Analysis of NHPC Ltd

NHPC, or National Hydroelectric Power Corporation, is an Indian state-owned enterprise focused on developing and operating hydroelectric power projects. Established in 1975, the company aims to harness India’s hydropower potential, contributing to sustainable energy solutions and supporting the country’s energy needs.  

The stock, priced at ₹81.98, has a market cap of ₹82,349.20 crore and offers a dividend yield of 2.32%. It delivered a 1-year return of 42.70%, with a robust 5-year CAGR of 28.01% and an impressive average net profit margin of 31.23%.

• Close Price ( ₹ ): 81.98
• Market Cap ( Cr ): 82349.20
• Dividend Yield %: 2.32
• Book Value (₹): 43892.41
• 1Y Return %: 42.70
• 6M Return %: -27.55
• 1M Return %: -2.01
• 5Y CAGR %: 28.01
• % Away From 52W High: 44.43
• 5Y Avg Net Profit Margin %: 31.23 

Financial Comparison of Adani Green Energy Limited and NHPC Limited

The table below shows a financial comparison of Adani Green Energy Ltd and NHPC Ltd.

Points to be noted:

• EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization): Measures a company’s profitability before accounting for financial and non-cash expenses.
• PBIT (Profit Before Interest and Tax): Reflects operating profit by excluding interest and taxes from total revenue.
• PBT (Profit Before Tax): Indicates profit after deducting operating costs and interest but before taxes.
• Net Income: Represents the company’s total profit after all expenses, including taxes and interest, are deducted.
• EPS (Earnings Per Share): Shows the portion of a company’s profit allocated to each outstanding share of stock.
• DPS (Dividend Per Share): Reflects the total dividend paid out per share over a specific period.
• Payout Ratio: Measures the proportion of earnings distributed as dividends to shareholders.

Dividend of Adani Green Energy and NHPC

The table below displays the company’s dividend payments. Currently, Adani Green Energy has not issued any dividends.

Advantages and Disadvantages of Investing in Adani Green Energy Ltd

Adaniin  Green Energy Ltd

The primary advantage of Adani Green Energy Ltd lies in its leadership in the renewable energy sector, focusing on solar and wind power. The company’s large-scale projects and strong operational capacity drive its growth and market dominance.

1. Renewable Energy Leadership: Adani Green Energy is among the largest renewable energy companies globally, with a portfolio exceeding 20 GW. Its focus on solar and wind energy aligns with global trends toward sustainable and green energy solutions.
2. Strong Project Pipeline: The company has a robust pipeline of ongoing and upcoming projects, ensuring sustained growth. Its large-scale projects strengthen its ability to meet the rising demand for renewable energy in India and worldwide.
3. Strategic Partnerships: Collaborations with international investors and institutions provide financial stability and technological expertise. These partnerships enhance Adani Green Energy’s ability to scale operations and adopt advanced renewable energy technologies.
4. Commitment to Sustainability: Adani Green Energy is dedicated to achieving net-zero emissions by 2050. Its operations focus on reducing environmental impact, contributing to India’s renewable energy goals and attracting environmentally conscious investors.
5. Government Policy Alignment: The company benefits from favourable government policies and renewable energy. Subsidies, incentives and initiatives for green power development provide a conducive environment for Adani Green Energy’s expansion and long-term growth.

The main disadvantage for Adani Green Energy Ltd stems from its dependence on renewable energy project execution and financing. Delays, cost overruns, or challenges in securing funding can significantly impact its operations and profitability.

1. Project Execution Delays: Adani Green Energy relies on large-scale renewable energy projects for growth. Delays due to regulatory approvals, land acquisition, or supply chain disruptions can increase costs and hamper timely revenue generation.
2. High Debt Levels: The company’s ambitious expansion plans are heavily financed by debt. Rising interest rates or repayment pressures could strain financial stability and impact its ability to invest in future projects.
3. Dependence on Government Policies: The renewable energy sector’s growth is influenced by government subsidies and policies. Changes in policy or reductions in financial incentives could adversely affect Adani Green Energy’s profitability and project feasibility.
4. Market Competition: Intense competition in the renewable energy sector from both domestic and international players could pressure pricing and margins, impacting Adani Green Energy’s ability to maintain a competitive edge.

Advantages and Disadvantages of Investing NHPC Ltd

NHPC Ltd

The primary advantage of NHPC Ltd lies in its leadership as India’s largest hydropower company. With extensive expertise in renewable energy, the company contributes significantly to the nation’s clean energy generation and sustainable development goals.

1. Dominance in Hydropower: NHPC manages an extensive portfolio of hydropower projects with a combined capacity exceeding 7 GW. This leadership position ensures a consistent and dependable revenue stream, supported by India’s increasing demand for clean and renewable energy sources.
2. Government Backing: As a public sector enterprise, NHPC enjoys robust government backing through supportive policies, reliable funding, and favourable regulatory approvals. This strong support allows it to undertake large-scale infrastructure projects with significantly reduced risk.
3. Sustainable Energy Focus: NHPC is actively expanding its renewable energy portfolio, diversifying into solar and wind energy projects. This strategic shift aligns with global sustainability trends and enhances its competitiveness in the renewable energy market.
4. Robust Project Pipeline: The company has several large-scale projects under construction, ensuring long-term growth. These projects include hydro, solar and hybrid energy solutions, solidifying NHPC’s position as a versatile clean energy provider.
5. Strong Financial Position: NHPC maintains a healthy financial structure, with consistent profitability and stable dividends. Its ability to generate cash flows from long-term power purchase agreements ensures financial resilience and attractiveness to investors seeking stable returns.

The main disadvantages for NHPC Ltd arise from its dependence on hydropower projects, which are subject to environmental challenges, regulatory delays and climatic variability. These factors can significantly impact project timelines, costs and overall profitability.

1. Environmental and Regulatory Challenges: Hydropower projects require extensive environmental clearances and compliance. Delays in obtaining approvals or changes in regulatory policies can increase costs and postpone project completion, impacting NHPC’s revenue generation.
2. Climate Variability: Hydropower generation is heavily dependent on water availability, which is influenced by climatic conditions. Droughts or irregular monsoons can reduce power generation, affecting NHPC’s operational efficiency and financial performance.
3. High Project Costs: Hydropower projects involve significant capital expenditure and long gestation periods. Cost overruns or delays in funding can strain NHPC’s financial resources, affecting its ability to undertake new projects.
4. Competition from Other Renewables: The growing adoption of solar and wind energy, which are faster and cheaper to deploy, poses a risk to NHPC’s market share. Diversification into other renewable energy sources is necessary for long-term competitiveness.
5. Geopolitical Risks: NHPC’s projects often involve infrastructure in sensitive border regions. Geopolitical tensions or conflicts could disrupt operations and create additional risks, affecting project execution and overall business stability.

How to Invest in Adani Green Energy Ltd and NHPC Ltd Stocks?

Investing in Adani Green Energy Ltd and NHPC Ltd requires a systematic approach, beginning with selecting a reputable stockbroker like Alice Blue, known for its competitive brokerage fees and comprehensive trading services across major Indian exchanges.

1. Open a Demat and Trading Account: Initiate the process by opening a Demat and trading account with a trusted broker such as Alice Blue. They offer seamless access to equity markets, facilitating the purchase and sale of shares.  
2. Complete KYC Formalities: Fulfill the Know Your Customer (KYC) requirements by submitting necessary documents like PAN card, Aadhaar card and bank statements. This step ensures compliance with regulatory standards and activates your trading account.
3. Fund Your Trading Account: Deposit sufficient funds into your trading account through available methods such as net banking or UPI. Adequate funding enables you to execute buy orders for Adani Green Energy and NHPC shares.
4. Place Your Buy Orders: Utilize the broker’s trading platform to search for Adani Green Energy Ltd and NHPC Ltd stocks. Enter the desired quantity and specify the order type (market or limit) to place your buy orders.
5. Monitor Your Investments: Regularly review your investment portfolio and stay informed about market trends and company performance. This proactive approach aids in making informed decisions regarding holding or selling your stocks.

Adani Green Energy Ltd vs. NHPC Ltd – Conclusion

Adani Green Energy Ltd is a leader in renewable energy, focusing on solar and wind projects with a growing global footprint. Its strong project pipeline, strategic partnerships and commitment to sustainability position it as a high-growth player in the green energy market.

NHPC Ltd, India’s largest hydropower company, combines expertise in renewable energy with strong government backing. With a diversified portfolio, including solar and wind projects, NHPC stands as a reliable, sustainable and steady growth option in the renewable energy sector.

Best Renewable Energy Stocks – Adani Green Energy Ltd vs. NHPC Ltd – FAQ

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Disclaimer: The above article is written for educational purposes and the companies’ data mentioned in the article may change with respect to time. The securities quoted are exemplary and are not recommendatory.