The Green Energy sector focuses on renewable energy sources like solar and wind, aiming for sustainable growth. In contrast, the NBFC sector offers financial services, focusing on lending and investments, with both sectors providing distinct opportunities and challenges for investors.
Content:
- Green Energy Sector Overview
- NBFC Sector Overview
- Best Stocks In The Green Energy Sector
- Top Stocks In The NBFC Sector
- Fundamental Analysis Of Green Energy Sector
- Fundamental Analysis Of NBFC Sector
- Green Energy Sector Performance & Growth
- NBFC Sector Performance & Growth
- Government Policies & Incentives For The Green Energy and NBFC Sector
- Challenges Faced By Green Energy and NBFC Sector
- Future Outlook Of Green Energy and NBFC Sector
- How to invest in the Green Energy and NBFC Sector Stocks?
- Difference Between NBFC Sector And Green Energy Sector – Conclusion
- Green Energy Sector Vs NBFC Sector – FAQs
Green Energy Sector Overview
The Green Energy sector is centered on the production and utilization of renewable energy sources such as solar, wind, hydro and bioenergy. This sector is pivotal in addressing climate change, promoting sustainability and reducing dependency on fossil fuels for power generation.
Driven by global sustainability goals and government initiatives, the Green Energy sector continues to attract substantial investments. Technological advancements and cost reductions in renewable energy systems have made them more competitive, positioning this sector as a critical driver of long-term economic growth and environmental preservation.
NBFC Sector Overview
The Non-Banking Financial Company (NBFC) sector offers a range of financial services, including loans, leasing, insurance and asset management. These institutions play a vital role in promoting financial inclusion by providing access to credit for underserved populations and businesses.
The NBFC sector has seen rapid growth, fueled by increased demand for loans and financial products. However, it faces challenges such as liquidity risks, regulatory changes and rising non-performing assets (NPAs), which can impact profitability and stability. Despite these hurdles, NBFCs remain a critical component of the financial ecosystem.
Best Stocks In The Green Energy Sector
The table below shows the best stocks in the green energy sector based on a 1Y return.
Name | Close Price (rs) | 1Y Return (%) |
Ujaas Energy Ltd | 458 | 2,012.55 |
Websol Energy System Ltd | 1,499.55 | 244.92 |
Insolation Energy Ltd | 292.95 | 153.29 |
Alpex Solar Ltd | 723 | 109.29 |
Azad Engineering Ltd | 1,555.00 | 57.36 |
Premier Energies Ltd | 1,029.00 | 22.51 |
K.P. Energy Ltd | 421.5 | 11.54 |
Suzlon Energy Ltd | 53.84 | 9.32 |
BF Utilities Ltd | 818 | 4.17 |
Waaree Renewable Technologies Ltd | 960.55 | -1.99 |
Top Stocks In The NBFC Sector
The table below shows the top stocks in the NBFC sector based on a 1Y return.
Name | Close Price (rs) | 1Y Return (%) |
Authum Investment & Infrastructure Ltd | 1,796.55 | 102.81 |
Muthoot Finance Ltd | 2,244.70 | 57.51 |
Motilal Oswal Financial Services Ltd | 674 | 50.78 |
Rail Vikas Nigam Ltd | 395 | 40.64 |
Cholamandalam Financial Holdings Ltd | 1,470.20 | 27.26 |
Bajaj Finance Ltd | 8,476.65 | 26.34 |
Sundaram Finance Ltd | 4,646.90 | 21.98 |
Shriram Finance Ltd | 560.6 | 16.13 |
Housing and Urban Development Corporation Ltd | 206.4 | 4.3 |
Mahindra and Mahindra Financial Services Ltd | 297.5 | 0.24 |
Fundamental Analysis Of Green Energy Sector
Ujaas Energy Ltd
Ujaas Energy Ltd, incorporated in 1999, is a key player in India’s solar power sector. The company specializes in solar power generation, manufacturing, sales and services of solar projects. Under its flagship brand ‘UJAAS’, it develops, operates and maintains solar energy plants while also manufacturing and selling electric vehicles.
Market Cap: ₹5,127.67 Crore
Close Price: ₹458
1Y Return: 2,012.55%
1M Return: -7.35%
6M Return: 40.92%
5Y Average Net Profit Margin: -69.43%
5Y CAGR: 160.2%
Sector: Renewable Energy
Websol Energy System Ltd
Websol Energy System Ltd is a leading manufacturer of photovoltaic crystalline solar cells and PV modules in India. The company specializes in producing high-quality solar components for commercial and industrial solar energy panels, catering to both domestic and international markets with innovative and efficient solar solutions.
Market Cap: ₹6,329.05 Crore
Close Price: ₹1,499.55
1Y Return: 244.92%
1M Return: -8.76%
6M Return: 113.76%
5Y Average Net Profit Margin: -108.01%
5Y CAGR: 120.07%
Sector: Renewable Energy
Insolation Energy Ltd
Insolation Energy Ltd, incorporated in 2015, specializes in manufacturing high-efficiency solar panels and modules of various sizes. The company operates a 200 MW solar PV module manufacturing unit in Jaipur, spanning over 60,000 sq. ft, equipped with advanced machinery to cater to the growing solar energy market.
Market Cap: ₹6,413.08 Crore
Close Price: ₹292.95
1Y Return: 153.29%
1M Return: -17.04%
6M Return: -7.56%
5Y Average Net Profit Margin: N/A
5Y CAGR: N/A
Sector: Renewable Energy
Alpex Solar Ltd
Alpex Solar Ltd, incorporated in 2008, is a leading photovoltaic module manufacturer and solar energy solutions provider. Among North India’s largest PV module manufacturers, the company produces solar panels, power plants, aluminium frames, IPP solutions, GH2 technology and AC/DC water pumps, catering to diverse renewable energy needs.
Market Cap: ₹1,754.87 Crore
Close Price: ₹723
1Y Return: 109.29%
1M Return: -13.07%
6M Return: 3.59%
5Y Average Net Profit Margin: 2.73%
5Y CAGR: N/A
Sector: Renewable Energy
Azad Engineering Ltd
Azad Engineering Ltd, incorporated in 1983, is a leading manufacturer of aerospace components and turbines. The company supplies precision-engineered products to original equipment manufacturers (OEMs) across the aerospace, defence, energy and oil and gas industries, ensuring high-quality solutions for critical applications worldwide.
Market Cap: ₹9,205.67 Crore
Close Price: ₹1,555.00
1Y Return: 57.36%
1M Return: -14.77%
6M Return: -4.99%
5Y Average Net Profit Margin: N/A
5Y CAGR: N/A
Sector: Engineering
Premier Energies Ltd
Premier Energies Ltd, incorporated in April 1995, is a leading manufacturer of integrated solar cells and panels. The company offers a diverse product portfolio, including monofacial and bifacial solar modules, along with EPC and O&M solutions, catering to India’s growing renewable energy sector.
Market Cap: ₹46,314.25 Crore
Close Price: ₹1,029.00
1Y Return: 22.51%
1M Return: -20.27%
6M Return: 22.51%
5Y Average Net Profit Margin: 2.32%
5Y CAGR: N/A
Sector: Renewable Energy
K.P. Energy Ltd
K.P. Energy Ltd (KPEL), part of the KP Group, specializes in utility-scale wind power infrastructure. The company manages wind farm siting, land acquisition, permits, EPCC of wind projects and balance-of-plant (BoP) infrastructure. KPEL also operates wind turbines and solar power plants as an Independent Power Producer (IPP), primarily in Gujarat.
Market Cap: ₹2,800.31 Crore
Close Price: ₹421.5
1Y Return: 11.54%
1M Return: -15.98%
6M Return: 11.86%
5Y Average Net Profit Margin: 8.43%
5Y CAGR: 88.59%
Sector: Renewable Energy
Suzlon Energy Ltd
Suzlon Energy Ltd is a leading global renewable energy solutions provider and a vertically integrated wind turbine generator (WTG) manufacturer. The company designs, develops and manufactures key WTG components while offering turnkey wind project execution, including installation, operations, maintenance, wind resource assessment and power evacuation services in India and internationally.
Market Cap: ₹73,167.02 Crore
Close Price: ₹53.84
1Y Return: 9.32%
1M Return: -5.7%
6M Return: -22.62%
5Y Average Net Profit Margin: -9.16%
5Y CAGR: 92.25%
Sector: Renewable Energy
BF Utilities Ltd
BF Utilities Ltd, incorporated in 2000, specializes in electricity generation through wind energy and infrastructure development. The company primarily produces wind power, which is utilized by Bharat Forge Ltd. at its Pune plant, while also engaging in infrastructure-related activities to support sustainable energy solutions.
Market Cap: ₹3,075.00 Crore
Close Price: ₹818
1Y Return: 4.17%
1M Return: -13.7%
6M Return: 7.26%
5Y Average Net Profit Margin: 8.67%
5Y CAGR: 20.54%
Sector: Utilities
Waaree Renewable Technologies Ltd
Waaree Renewables Technologies Ltd, incorporated in 1999, specializes in power generation through renewable energy sources and offers consultancy services. As one of India’s largest vertically integrated new energy companies, it operates a 12GW solar panel manufacturing capacity across its facilities in Chikhli, Surat and Umbergaon, Gujarat.
Market Cap: ₹10,013.40 Crore
Close Price: ₹960.55
1Y Return: -1.99%
1M Return: -25.26%
6M Return: -32.87%
5Y Average Net Profit Margin: -4.14%
5Y CAGR: 218.91%
Sector: Renewable Energy
Fundamental Analysis Of NBFC Sector
Authum Investment & Infrastructure Ltd
Authum Investment & Infrastructure Ltd is engaged in fund-based activities, including investments in shares, securities and mutual funds and providing loans. It focuses on structured financing and equity investments in emerging companies. Its total investments grew from ₹3,186 crore in FY22 to ₹10,317 crore in Q2 FY25.
Market Cap: ₹ 29,540.31 Crore
Close Price: ₹ 1,796.55 Rs
1Y Return: 102.81%
1M Return: -4.62%
6M Return: 66.54%
5Y Average Net Profit Margin: –
5Y CAGR: 185.03%
Sector: Diversified Financials
Muthoot Finance Ltd
Muthoot Finance Ltd is a leading non-banking financial company (NBFC) that specializes in providing gold loans. The company primarily operates in Southern India, offering financial services to individuals and businesses through its extensive network of branches.
Market Cap: ₹ 90,110.58 Crore
Close Price: ₹ 2,244.70 Rs
1Y Return: 57.51%
1M Return: 1.93%
6M Return: 20.98%
5Y Average Net Profit Margin: 31.34%
5Y CAGR: 24.15%
Sector: Consumer Finance
Motilal Oswal Financial Services Ltd
Motilal Oswal Financial Services Ltd was founded in 1987 and is a well-diversified financial services firm. The company operates a vast network across 550+ cities with over 2,500 business locations, serving more than 16 lakh customers.
Market Cap: ₹ 40,409.36 Crore
Close Price: ₹ 674 Rs
1Y Return: 50.78%
1M Return: -27.17%
6M Return: 10.5%
5Y Average Net Profit Margin: 25.84%
5Y CAGR: 27.23%
Sector: Diversified Financials
Rail Vikas Nigam Ltd
Rail Vikas Nigam Ltd was incorporated in 2003 by the Government of India. It focuses on implementing various railway infrastructure projects, including doubling, gauge conversion, electrification and major bridges. The company also shares freight revenue with Railways as per agreements with the Ministry of Railways.
Market Cap: ₹ 82,368.72 Crore
Close Price: ₹ 395 Rs
1Y Return: 40.64%
1M Return: -2.03%
6M Return: -30.19%
5Y Average Net Profit Margin: 5.96%
5Y CAGR: 73.53%
Sector: Specialized Finance
Cholamandalam Financial Holdings Ltd
Cholamandalam Financial Holdings Ltd, part of the Murugappa Group, is a Core Investment Company registered with the RBI. It offers a diverse range of financial products and risk management services to both individual and corporate customers through its group companies.
Market Cap: ₹ 27,703.75 Crore
Close Price: ₹ 1,470.20 Rs
1Y Return: 27.26%
1M Return: -3.17%
6M Return: 0.04%
5Y Average Net Profit Margin: 6.17%
5Y CAGR: 21.74%
Sector: Diversified Financials
Bajaj Finance Ltd
Bajaj Finance Ltd is primarily engaged in lending, offering a diversified portfolio across retail, SME and commercial customers. With a significant presence in both urban and rural India, the company also accepts public and corporate deposits and provides a variety of financial services products to its customers.
Market Cap: ₹ 5,24,793.18 Crore
Close Price: ₹ 8,476.65 Rs
1Y Return: 26.34%
1M Return: 15.15%
6M Return: 27.72%
5Y Average Net Profit Margin: 22.56%
5Y CAGR: 12.74%
Sector: Consumer Finance
Sundaram Finance Ltd
Sundaram Finance Ltd, established in 1954, is a registered deposit-taking NBFC. The company engages in retail finance across various domains, including vehicle finance, home finance, mutual funds, general insurance and financial service distribution.
Market Cap: ₹ 51,324.79 Crore
Close Price: ₹ 4,646.90 Rs
1Y Return: 21.98%
1M Return: 4.76%
6M Return: 18.8%
5Y Average Net Profit Margin: 21.02%
5Y CAGR: 22.41%
Sector: Consumer Finance
Shriram Finance Ltd
Shriram Finance Ltd, part of the SHRIRAM Group, is a leading deposit-taking NBFC specializing in commercial vehicle financing, particularly trucks. The company operates 1,758 branches and 831 rural centres, partnering with approximately 500 private financiers to provide financial solutions.
Market Cap: ₹ 1,05,211.84 Crore
Close Price: ₹ 560.60 Rs
1Y Return: 16.13%
1M Return: -4.88%
6M Return: -4.17%
5Y Average Net Profit Margin: 16.71%
5Y CAGR: 18.66%
Sector: Consumer Finance
Housing and Urban Development Corporation Ltd
Housing & Urban Development Corporation Ltd is primarily engaged in financing housing and urban development activities across the country. The company plays a key role in supporting housing projects and urban infrastructure development in India.
Market Cap: ₹ 41,389.28 Crore
Close Price: ₹ 206.40 Rs
1Y Return: 4.3%
1M Return: -14.75%
6M Return: -30.85%
5Y Average Net Profit Margin: 23.88%
5Y CAGR: 40.06%
Sector: Specialized Finance
Mahindra and Mahindra Financial Services Ltd
Mahindra & Mahindra Financial Services Ltd (MMFSL), a part of the Mahindra Group, is a non-banking financial company (NBFC) primarily engaged in financing the purchase of new and pre-owned vehicles, including tractors, cars, commercial vehicles and construction equipment. It also offers SME financing solutions.
Market Cap: ₹ 36,760.91 Crore
Close Price: ₹ 297.50 Rs
1Y Return: 0.24%
1M Return: 8.61%
6M Return: -2.07%
5Y Average Net Profit Margin: 10.64%
5Y CAGR: 4.16%
Sector: Consumer Finance
Green Energy Sector Performance & Growth
The below table shows the green energy sector performance & growth based on a 5-year net profit margin.
Name | Close Price (rs) | 5Y Avg Net Profit Margin (%) |
SJVN Ltd | 95.8 | 41.4 |
NHPC Ltd | 77.47 | 31.23 |
KPI Green Energy Ltd | 474.85 | 16.65 |
BF Utilities Ltd | 818 | 8.67 |
K.P. Energy Ltd | 421.5 | 8.43 |
Adani Green Energy Ltd | 989.9 | 7.01 |
Waaree Energies Ltd | 2,298.30 | 4.89 |
Orient Green Power Company Ltd | 14.98 | 3.63 |
Alpex Solar Ltd | 723 | 2.73 |
Premier Energies Ltd | 1,029.00 | 2.32 |
NBFC Sector Performance & Growth
The table below shows the NBFC sector performance & growth based on 5 5-year net profit margin.
Name | Close Price (rs) | 5Y Avg Net Profit Margin (%) |
Muthoot Finance Ltd | 2,244.70 | 31.34 |
Indian Railway Finance Corp Ltd | 133.5 | 26.36 |
Motilal Oswal Financial Services Ltd | 674 | 25.84 |
REC Limited | 441.2 | 24.72 |
Housing and Urban Development Corporation Ltd | 206.4 | 23.88 |
Bajaj Finance Ltd | 8,476.65 | 22.56 |
Sundaram Finance Ltd | 4,646.90 | 21.02 |
Indian Renewable Energy Development Agency Ltd | 188.2 | 18.83 |
Bajaj Housing Finance Ltd | 119.58 | 18.81 |
Power Finance Corporation Ltd | 409.9 | 17.64 |
Government Policies & Incentives For The Green Energy and NBFC Sector
The government has introduced various policies and incentives to boost the Green Energy sector, including tax benefits, subsidies and renewable energy certificates. India’s National Solar Mission and the PLI (Production Linked Incentive) scheme aim to promote renewable energy and the manufacturing of solar equipment.
For the NBFC sector, the government provides incentives like priority sector lending status for certain categories of loans, allowing easier access to funds. Additionally, the Reserve Bank of India (RBI) has introduced measures to improve liquidity and reduce operational risks for NBFCs, ensuring stable growth.
Challenges Faced By Green Energy and NBFC Sector
The main challenges faced by both the Green Energy and NBFC sectors include high capital expenditure, policy uncertainty, regulatory complexities and competition. These factors hinder growth, investment potential and operational efficiency in both industries.
- High Capital Expenditure: Both sectors require substantial upfront investment. In green energy, infrastructure and technology costs are significant, while NBFCs face high operational costs related to expansion, servicing and compliance.
- Policy Uncertainty: Fluctuating policies and government incentives affect long-term planning in green energy. Similarly, NBFCs face uncertainty due to evolving regulations that impact business models, lending practices and financial stability.
- Regulatory Complexities: The green energy sector encounters challenges in navigating complex environmental regulations, while NBFCs deal with strict financial regulations, impacting growth strategies and operational flexibility in both sectors.
- Competition: The green energy sector faces technological competition in terms of energy storage and efficiency. NBFCs are challenged by the rise of fintech companies offering digital lending services, forcing traditional players to innovate rapidly.
Future Outlook Of Green Energy and NBFC Sector
The Green Energy sector is poised for significant growth, driven by global climate commitments and India’s ambitious renewable energy targets. As technology advances and costs decline, the sector is expected to attract more investments, contributing to cleaner energy solutions and sustainable development.
The NBFC sector will continue to benefit from increasing financial inclusion and demand for credit across diverse sectors. However, regulatory challenges and liquidity risks remain concerns. With technological innovations and strong growth prospects in retail, housing and infrastructure financing, the sector is likely to expand despite these hurdles.
How to invest in the Green Energy and NBFC Sector Stocks?
To invest in the Green Energy and NBFC Sector Stocks, follow these steps:
- Open a Demat and Trading Account: Choose a brokerage platform like Alice Blue and complete the KYC process to start trading.
- Research the Stocks: Analyze the company’s financials, industry position and valuation to ensure it meets fundamental strength criteria.
- Place Your Buy Order: Log in to your trading account, search for the stock and specify the number of shares you want to purchase.
- Monitor Your Investment: Regularly track the stock’s performance and market news to make informed decisions on holding or selling.
- Brokerage Tariffs: Please note that Alice Blue’s updated brokerage tariff is now Rs. 20 per order, which will apply to all trades.
Difference Between NBFC Sector And Green Energy Sector – Conclusion
- The Green Energy sector focuses on renewable sources like solar, wind and hydro, addressing climate change and sustainability. Technological advancements and global initiatives drive investment and long-term economic growth.
- The NBFC sector offers financial services like loans and insurance, promoting financial inclusion. While facing challenges such as liquidity risks and rising NPAs, it remains a crucial part of the financial ecosystem.
- The government supports the Green Energy sector with policies like tax benefits and subsidies. For NBFCs, incentives include priority sector lending and RBI measures to enhance liquidity and stability.
- Both the Green Energy and NBFC sectors face challenges like high capital expenditure, policy uncertainty, regulatory complexities and rising competition, affecting growth, investment and operational efficiency in both industries.
- The Green Energy sector is set for growth, driven by climate goals and technology advances. The NBFC sector will expand with financial inclusion, despite regulatory and liquidity challenges.
- To invest in Green Energy and NBFC stocks, open a Demat and Trading account with a brokerage platform like Alice Blue, research stocks, place buy orders, monitor investments and be aware of brokerage tariffs like Alice Blue’s Rs. 20 per order.
Green Energy Sector Vs NBFC Sector – FAQs
The Green Energy sector is focused on renewable energy sources like solar, wind and hydropower. It aims to reduce carbon emissions, promote sustainable development and address climate change by shifting away from fossil fuels to cleaner, environmentally friendly energy alternatives.
The Non-Banking Financial Companies (NBFC) sector offers a range of financial services such as loans, asset management and investment advisory, without holding a banking license. NBFCs are vital for financial inclusion and provide access to credit for underserved segments of the economy.
The Green Energy sector focuses on renewable energy production and sustainability, while the NBFC sector revolves around financial services like loans, leasing and investments. Green energy promotes environmental sustainability, whereas NBFCs foster financial growth and inclusion.
Best Stocks In The Green Energy Sector #1: Ujaas Energy Ltd
Best Stocks In The Green Energy Sector #2: Websol Energy System Ltd
Best Stocks In The Green Energy Sector #3: Insolation Energy Ltd
Best Stocks In The Green Energy Sector #4: Alpex Solar Ltd
Best Stocks In The Green Energy Sector #5: Azad Engineering Ltd
Best Stocks In The Green Energy Sector based on 1-year return.
Best Stocks In The NBFC Sector #1: Authum Investment & Infrastructure Ltd
Best Stocks In The NBFC Sector #2: Muthoot Finance Ltd
Best Stocks In The NBFC Sector #3: Motilal Oswal Financial Services Ltd
Best Stocks In The NBFC Sector #4: Rail Vikas Nigam Ltd
Best Stocks In The NBFC Sector #5: Cholamandalam Financial Holdings Ltd
Best Stocks In The NBFC Sector based on 1-year return.
The Green Energy sector has shown promising returns, especially with the rise of solar and wind energy investments. Stocks in this sector have delivered significant returns, driven by government incentives, growing energy demand and global sustainability goals.
The NBFC sector has experienced steady growth, with a compound annual growth rate (CAGR) of around 12-15% over the past few years. This growth is fueled by increasing demand for credit, financial inclusion and expanding customer bases.
The NBFC sector faces challenges such as regulatory scrutiny, rising non-performing assets (NPAs), liquidity risks and high borrowing costs. These factors can impact profitability and growth, especially during economic slowdowns or financial market instability.
Foreign Institutional Investors (FIIs) have heavily invested in India’s Green Energy sector, with $6.1 billion in FDI inflows between 2020-2023. In FY 2023-24, FDI surged to $3.7 billion, reflecting strong confidence in the sector’s growth potential.
The Return on Capital Employed (ROCE) for the Green Energy sector varies based on individual companies, but it typically ranges between 7-12%. Companies with large-scale renewable projects or diversified energy portfolios may have higher ROCE due to consistent growth and government incentives.
Yes, the NBFC sector is currently considered overvalued. The industry’s price-to-earnings (P/E) ratio stands at 22.0, surpassing its historical average, suggesting potential overvaluation amidst high investor interest and rising loan disbursement, despite regulatory concerns.
Investing in the Green Energy sector carries risks such as policy changes, regulatory hurdles, technological uncertainties and fluctuating commodity prices. Additionally, the high capital expenditure required for renewable energy projects poses financial risks for companies in this sector.
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.