Best Green Hydrogen Stocks in India 2023: From Adani to Ambani, and even PSUs, India’s various giants have been in the race for green hydrogen since the Union Cabinet approved the National Green Hydrogen Mission in January last year. The intent is to make the country a leading manufacturer and exporter of green hydrogen.
In this article, we’ll look at the best green hydrogen stocks in India 2023 that are expected to lead the sector in the future.
Table of Contents
Best Green Hydrogen Stocks in India 2023
We’ll study the history and the business of the companies on our list. Alongside this, we’ll briefly read about their financials and the steps they have taken toward green hydrogen production. A table summarizing the top green hydrogen stocks in India and a summary conclude the article in the end.
Best Green Hydrogen Stocks In India #1 – Reliance Industries
| CMP | ₹2,300 | Market Cap (Cr.) | ₹1,545,000 |
| EPS | ₹94 | Stock P/E | 24.3 |
| RoCE | 9.2% | RoE | 7.9% |
| Promoter Holding | 50.5% | Book Value | ₹1,168 |
| Debt to Equity | 0.40 | Price to Book Value | 1.94 |
| Net Profit Margin | 9.40% | Operating Profit Margin | 15.80% |
Reliance Industries Ltd. (RIL) was founded six and a half decades ago in 1958 by Dhirubhai Ambani as a polyester yarn and spices trading corporation.
Over the years, the company has morphed into a global conglomerate with business interests in telecommunications, retail, e-commerce, petroleum refinery & marketing, new energy, petrochemicals, and more under the leadership of Mukesh Ambani.
The company has earmarked a large investment of Rs 5.95 lakh crore towards green & new energy and other projects spread across the next 10 to 15 years. As part of this, it will establish a 100GW renewable energy power plant with green hydrogen ecosystem development.
In the process, RIL will also enable SMEs and entrepreneurs to adopt new energy technologies leading to inhouse utilization of renewable energy and green hydrogen.
Along these lines, the diversified giant is working with Stiesdal A/S of Denmark to manufacture their HygroGen Electrolyzers in India. This will allow it to produce hydrogen at a much cheaper rate compared to current levels.
In the last five years, the revenues of Reliance Industries have grown from Rs 3,90,823 crore in FY18 to Rs 6,98,672 in FY22. During the same period, its net profit has almost doubled to Rs 67,845 crore from Rs 36,080 earlier. It has an adequate debt-to-equity ratio of 0.40 and presently trades at a price-to-earnings ratio of 24.3.
Best Green Hydrogen Stocks in India #2 – GAIL
| CMP | ₹105 | Market Cap (Cr.) | ₹68,500 |
| EPS | ₹12.8 | Stock P/E | 8.2 |
| RoCE | 23.3% | RoE | 20.9% |
| Promoter Holding | 51.9% | Book Value | ₹100 |
| Debt to Equity | 0.22 | Price to Book Value | 1.04 |
| Net Profit Margin | 13.30% | Operating Profit Margin | 16.30% |
Previously known as Gas Authority of India, GAIL (India) Ltd. was set up in 1984 as a central public sector undertaking (CPSU) under the Ministry of Petroleum and Natural Gas, Government of India.
GAIL is engaged in the business of gas transmission & marketing, gas exploration & production, petrochemicals, renewables, city gas distribution, and more. The company operates 74% of the total natural gas pipelines and 50% of the CNG stations (including JV) in the country. Furthermore, it controls over half of the natural gas sales in the nation.
It announced in May last year that it would set up one of India’s largest Proton Exchange Membrane (PEM) Electrolysers. The facility will manufacture around 4.3 MT of Hydrogen per day or about 10 MW in terms of capacity with a purity of 99.99 volume %. Furthermore, it has started mixing hydrogen into the natural gas system for city gas distribution.
GAIL is a dividend stock with a high dividend yield of 6.36% and a dividend payout ratio remaining upwards of 30% for the last three fiscals. Its revenues have grown at a CAGR of 11.23% during the past five years to Rs 92,770 crore in FY22. During the same period, its net profit more than doubled to Rs 12,304 crore at an annualized rate of 20.69%.
Best Green Hydrogen Stocks in India #3 – Bharat Petroleum Corporation
| CMP | ₹350 | Market Cap (Cr.) | ₹76,000 |
| EPS | -₹8.9 | Stock P/E | NA |
| RoCE | 15.6% | RoE | 20.4% |
| Promoter Holding | 53% | Book Value | ₹216 |
| Debt to Equity | 1.73 | Price to Book Value | 1.66 |
| Net Profit Margin | 3.11% | Operating Profit Margin | 5.52% |
Bharat Petroleum Corporation Ltd. (BPCL) is a diversified public sector oil marketing company with broad business interests spreading across fuel stations, LPG cylinder gas for domestic and commercial use, lubricants, aviation fuel, refineries, and more.
It traces its origins to the late 19th century. It was nationalized in 1976 and came under the ownership of the Ministry of Petroleum and Natural Gas, Government of India when Burmah Shell (as it was previously known) was taken over by the government.
In a recent development, the management of the company communicated that is setting up a 20 MW green hydrogen unit in Madhya Pradesh. The facility will be the largest so far in India and will be used to meet the captive energy requirements of PSU.
Around six to eight firms have expressed interest in the project which is expected to commence in two years.
Recently, the Union Government decided to call off the privatization plans for BPCL. For the last two years, it had been trying to invite bids from interested buyers to meet its disinvestment targets.
Trailing twelve months (TTM) earnings per share stood at a negative of Rs 8.9 for the stock. The bottom line of OMCs has been in red for the last few quarters due to the surge in energy prices brought about by the Russia-Ukraine war. However, the situation is expected to improve as the crude oil prices have come down easing pressure on the margins.
Best Green Hydrogen Stocks in India #4 –
| CMP | ₹2,200 | Market Cap (Cr.) | ₹310,000 |
| EPS | ₹71.9 | Stock P/E | 30.7 |
| RoCE | 11.0% | RoE | 10.2% |
| Promoter Holding | 0.0% | Book Value | ₹582 |
| Debt to Equity | 1.58 | Price to Book Value | 3.77 |
| Net Profit Margin | 6.28% | Operating Profit Margin | 15.50% |
Larsen & Toubro (L&T) Ltd. is a diversified Indian conglomerate with a worldwide presence. It is engaged in various businesses across multiple industries including engineering, infrastructure & construction, manufacturing, information technology, and financial services.
Last year in August, the company commissioned a green hydrogen plant at one of its facilities in Gujarat. It is 3,000 square meters big in terms of size and has a capacity of 800 kW.
It has been set up for manufacturing green hydrogen and oxygen. They will be used as fuels in cutting and welding captive activities after blending 15% hydrogen with natural gas.
Furthermore, this year L&T entered into an agreement with McPhy Energy of France to produce and upgrade its pressurized alkaline electrolyzer technology on a licensed basis in India for domestic and overseas uses.
The diversified giant reported a net profit of Rs 10,419 crore in FY22 on sales of Rs 1,56,521 crore. Its stock presently trades at a price-to-earnings ratio of 31 and has returned an adequate 24% gain to its shareholders.
Best Green Hydrogen Stocks in India #5 – India Oil Corporation
| CMP | ₹80 | Market Cap (Cr.) | ₹112,000 |
| EPS | ₹4.4 | Stock P/E | 15.0 |
| RoCE | 15.6% | RoE | 20.4% |
| Promoter Holding | 51.5% | Book Value | ₹90 |
| Debt to Equity | 1.26 | Price to Book Value | 0.88 |
| Net Profit Margin | 4.36% | Operating Profit Margin | 7.91% |
Indian Oil Corporation Ltd. (IOCL) is a central public sector undertaking (CPSU) under the Ministry of Petroleum and Natural Gas, Government of India. It was established over 6 decades ago in 1959.
As of the present date, the range of the company’s operations is spread across the entire value chain of the petroleum industry: refining, pipeline transportation, petroleum products marketing, and exploration & production of crude oil, natural gas, and petrochemicals.
Recently, IOCL, L&T and ReNew entered into a joint venture (JV) to explore and develop green hydrogen technology in India. In addition to this, L&T and IOCL have also formed JV together to produce and sell electrolyzers for green hydrogen production.
And not just this, in February this year, the petroleum player announced that it will be installing green hydrogen plants at all of its refineries. This is in line with its audacious plan to reach net-zero emissions by 2046.
As a feather in its cap, IOCL established the nation’s green hydrogen plant at its refinery in Mathura. It will now set up a green hydrogen manufacturing site at its oil refinery in Panipat for Rs 2,000 crore. It will have a capacity of 7,000 tonnes per annum and is expected to commence by 2025.
Indian Oil Ltd. is a dividend stock with a high dividend yield of 10.7%. It has consistently paid dividends for more than ten financial years.
List of Top Green Hydrogen Stocks in India
The table below puts together the names of all the Top green hydrogen stocks in India 2023.
| Company Name | CMP (Rs) | Market Cap (Rs Cr) |
|---|---|---|
| Reliance Industries | 2,200 | 1,490,000 |
| GAIL | 105 | 68,500 |
| BPCL | 350 | 76,000 |
| Larsen & Toubro | 2,200 | 310,000 |
| Indian Oil Corporation | 80 | 112,000 |
| ONGC | 152 | 190,000 |
| Jindal Stainless | 290 | 15,000 |
| NTPC | 174 | 168,500 |
| JSW Energy | 240 | 39,500 |
| Adani Green Energy | 1,000 | 160,000 |
Bonus: Adani Enterprises
Gautam Adani-led Adani Group had earlier announced a large $ 50 billion investment over the next ten years towards green hydrogen and allied ecosystems with an annual capacity of 3 million tonnes of green hydrogen.
The majority of this investment is expected to be done by Adani New Industries Ltd. (ANIL), a subsidiary of Adani Enterprises Ltd.
However, TotalEnergies, a French energy giant has postponed its investment in the conglomerate’s green hydrogen venture. It has been a key partner in various other businesses of the group.
This move came after the New York-based Hindenberg Research accused the Adani Group of fraud and overleverage. This may put some dent in the timeline of the green hydrogen projects of Adani.
In Conclusion
Despite all these developments, the green hydrogen industry in India is still at a nascent stage. According to the draft National Hydrogen Mission guidelines, the overall hydrogen demand is projected to touch 12 MMT by 2030, out of which 40% or 5 MMT is expected to be green. Further by 2050, green hydrogen’s share is expected to rise to 80%.
Which of these stocks do you think are in the best position to ride the green hydrogen wave in India? How about you let us know your thoughts on the sector and these companies in the comments below?
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