NSE Top Hydrogen Stocks in India: Investing in a Cleaner Future

Hydrogen stocks have emerged as a critical component in the renewable energy sector as India progresses towards its ambitious climate goals. With a net-zero emissions target by 2070, green hydrogen energy stocks are set to play a vital role in the country’s energy landscape. Multiple Indian companies are leading the way in hydrogen production, making this sector significant for economic growth and sustainability.

How to Identify a Hydrogen Stock

When looking for good green hydrogen stocks, investors should consider a company’s involvement in renewable energy, its infrastructure for hydrogen production, and its strategic partnerships in the energy sector. Key indicators include:

1. Investment in Hydrogen Projects: Companies with clear, sizable investments in hydrogen facilities or electrolyzers.
2. Revenue and Growth Prospects: Historical and projected financial performance, including revenue generated from renewable energy sources.
3. Strategic Collaborations: Partnerships with other green energy leaders or government bodies.
4. Debt-to-Equity Ratio: A reasonable debt-to-equity ratio indicates the company’s ability to handle investments sustainably without over-leveraging.
5. Government Incentives and Policies: Companies positioned to benefit from government initiatives like the National Hydrogen Mission.

Most of it can be done with the help of stock screeners, but if it sounds like rocket science, then investment advisory service can be helpful, as these financial service advisories can track things like bear market, markent sentiments, and all other nuances of the stock market.

Why Hydrogen Stocks?

Green hydrogen stocks belong to companies that produce hydrogen by using renewable energy to split water into hydrogen and oxygen, making it one of the cleanest forms of energy available today. Unlike fossil fuels or even other forms of hydrogen, the companies to whom hydrogen stocks belong generate zero carbon emissions during production. Their versatility allows them to be applied across various sectors, including power generation, transportation, and heavy industry, where emission reduction is traditionally challenging. Hydrogen stocks offer a promising solution for sustainable growth in the energy sector.

List of Hydrogen Stocks

S.No.	Name	CMP Rs.	Mar Cap Rs.Cr.	P/E	Debt / Eq	3Yrs return %	ROCE %
1	Reliance Industries	1283.45	1736811.87	25.54	0.44	4.12	9.61
2	ONGC	261.10	328471.09	7.21	0.45	19.18	18.43
3	IOCL	140.95	199038.84	11.69	0.90	15.68	21.14
4	GAIL (India)	204.65	134559.38	11.69	0.23	27.96	14.66
5	BPCL	307.50	133409.03	9.91	0.76	13.53	32.09
6	CESC	184.55	24463.44	17.45	1.27	26.75	11.60

Source: Screener.in (08-11-2024)

Reliance Industries Limited (RIL)

S.No.	Name	CMP Rs.	Mar Cap Rs.Cr.	P/E	Debt / Eq	3Yrs return %	ROCE %
1	Reliance Industries	1283.45	1736811.87	25.54	0.44	4.12	9.61

Source: Screener.in (08-11-2024)

Reliance Industries has significantly invested in hydrogen stocks for its broader renewable energy initiatives. The company plans to establish a giga-scale electrolyzer facility to produce hydrogen and aims to generate 100 gigawatts of renewable energy by 2030. Reliance has committed $10 billion towards renewable energy projects over the next three years, including hydrogen production. In FY 2023-24, Reliance reported revenue of ₹9,24,938 crore, a net profit of ₹77,652 crore, and EBITDA of ₹1,54,076 crore, with a debt-to-equity ratio of 0.44.

Oil and Natural Gas Corporation (ONGC)

S.No.	Name	CMP Rs.	Mar Cap Rs.Cr.	P/E	Debt / Eq	3Yrs return %	ROCE %
2	IOCL	140.95	199038.84	11.69	0.90	15.68	21.14

Source: Screener.in (08-11-2024)

ONGC has joined the hydrogen movement, aiming to leverage its extensive experience in the energy sector for hydrogen production. The company is exploring partnerships and collaborations for developing hydrogen projects and reducing carbon emissions. ONGC’s involvement in the hydrogen sector is part of its commitment to diversifying its energy portfolio. In FY 2023-24, ONGC reported revenue of ₹6,45,790 crore, a net profit of ₹49,420 crore, and EBITDA of ₹83,635 crore, with a debt-to-equity ratio of 0.45.

ONGC Limited

S.No.	Name	CMP Rs.	Mar Cap Rs.Cr.	P/E	Debt / Eq	3Yrs return %	ROCE %
3	ONGC	261.10	328471.09	7.21	0.45	19.18	18.43

Source: Screener.in (08-11-2024)

ONGC has also joined the hydrogen movement, aiming to leverage its extensive experience in the energy sector for hydrogen production. The company is exploring partnerships and collaborations to develop hydrogen projects. In FY 2023-24, ONGC reported revenue of ₹6,45,790 crore, a net profit of ₹49,420 crore, and EBITDA of ₹83,635 crore, with a debt-to-equity ratio of 0.45.

GAIL (India) Limited

S.No.	Name	CMP Rs.	Mar Cap Rs.Cr.	P/E	Debt / Eq	3Yrs return %	ROCE %
4	GAIL	204.65	134559.38	11.69	0.23	27.96	14.66

Source: Screener.in (08-11-2024)

GAIL is setting up a hydrogen production facility in Madhya Pradesh, with an initial capacity of 4.3 tonnes per day. The company also blends hydrogen with natural gas to lower emissions. GAIL’s role in hydrogen blending initiatives could pave the way for cleaner energy solutions in India. In FY 2023-24, GAIL reported revenue of ₹1,36,081 crore, a net profit of ₹11,541 crore, and EBITDA of ₹10,337 crore, with a debt-to-equity ratio of 0.23.

Bharat Petroleum Corporation Limited (BPCL)

S.No.	Name	CMP Rs.	Mar Cap Rs.Cr.	P/E	Debt / Eq	3Yrs return %	ROCE %
6	BPCL	307.50	133409.03	9.91	0.76	13.53	32.09

Source: Screener.in (08-11-2024)

BPCL has undertaken projects to integrate hydrogen into its refining processes as part of its efforts to reduce carbon emissions. This integration will help BPCL reduce its carbon footprint and align its business with sustainability goals. In FY 2023-24, BPCL reported revenue of ₹4,47,934 crore, a net profit of ₹13,110 crore, and EBITDA of ₹47,382 crore, with a debt-to-equity ratio of 0.76.

CESC Limited

S.No.	Name	CMP Rs.	Mar Cap Rs.Cr.	P/E	Debt / Eq	3Yrs return %	ROCE %
6	CESC	184.55	24463.44	17.45	1.27	26.75	11.60

Source: Screener.in (08-11-2024)

CESC Limited is investigating the use of hydrogen as part of its energy solutions to reduce emissions from power generation. The company’s exploration of hydrogen technology is a step towards enhancing its renewable energy capabilities. For FY 2023-24, CESC reported revenue of ₹15,846 crore, a net profit of ₹1,467 crore, and EBITDA of ₹4,242 crore, with a debt-to-equity ratio of 1.27.

Factors to Consider When Investing In Hydrogen Stocks

1. Government Policies: Evaluate the impact of government incentives, policies, and subsidies for hydrogen development. Government support plays a crucial role in determining hydrogen stocks’ profitability and growth prospects.
2. Technological Capabilities: Assess the company’s technology and infrastructure for hydrogen production. Companies investing in advanced hydrogen production technologies are likely to be more competitive.
3. Financial Health: To gauge financial stability, check the debt-to-equity ratio, return on capital employed (ROCE), and profit margins. A stable financial position is essential for long-term growth, especially in the high-capital hydrogen production industry.
4. Market Position and Partnerships: Companies with a strong market position and strategic partnerships with global energy firms or technological partners can have a competitive advantage in the hydrogen industry.
5. Scalability of Projects: Evaluate the scalability of the company’s hydrogen projects. Companies that can scale production quickly and efficiently are better positioned to meet growing demand.
6. Long-term Vision: Companies with a well-defined roadmap for hydrogen adoption and integration into existing operations will likely provide better returns.

Conclusion on Hydrogen Stocks

Hydrogen stocks are rapidly becoming an essential element of India’s energy strategy. Companies like Reliance, NTPC, IOC, ONGC, Adani, GAIL, Adani Total Gas, BPCL, Adani Power, and CESC are at the forefront of this green energy transition. Their efforts are laying the foundation for a cleaner, more sustainable energy future, which will be crucial in achieving India’s climate goals by 2070. Investing in hydrogen stocks supports environmental sustainability and provides potential long-term growth opportunities for investors as the demand for clean energy solutions continues to rise.

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