Below are the list of top stocks under Utilities Sector in India and top stocks for its sub-industries.

Sub-industries which comes under Automobiles & Components

• Electric Utilities
• Gas Utilities

Top 5 Utilities Sector stocks in India

• NTPC Limited
• Adani Power Limited
• Power Grid Corporation of India
• Adani Green Energy Limited
• The Tata Power Company Limited

Top 5 Gas Utilities stocks in India

• GAIL (India) Limited
• Adani Total Gas Limited
• Indraprastha Gas Limited
• Gujarat Gas Limited
• Gujarat State Petronet Limited

Top 5 Electric Utilities stocks in India

• NTPC Limited
• Adani Power Limited
• Power Grid Corporation of India
• Adani Green Energy Limited
• The Tata Power Company Limited

2020 : In this year the government focused on structural reforms to address inefficiencies in the power distribution sector by introducing ADITYA (Atal Distribution System Improvement Yojana) aimed at investing in infrastructure like smart meters to reduce losses of distribution companies.

2021 : This Year Government Launched major schemes which are result-linked for power distribution network through RDSS (Revamped Distribution Sector Scheme) with massive outlay of 40 Billion USD with the aim of improving reliability of power distribution.

2022 : Focus on permitting multiple power distribution companies to operate in the same area by introducing the Electricity amendment bill 2022 aiming to increase competition and efficiency in electricity.

2023 : This year the government started making significant push towards adoption of renewable energy, also introduced TOD (Time-of-Day) tariffs, which incentivise customers for using electricity at off-peak hours and the government announced a goal of adding 50GW of renewable energy capacity annually for the next five years.

2024 : In this year India achieved record breaking 20GW addition to renewable energy which was driven by global falling of module costs.

2025 : In this year the government created a long term plan to include more and more private sector for multi-faceted energy mix and created a new target of 500GW of renewable energy by 2030, also made amendments for attracting investments in nuclear power and set target of expanding capacity to 100GW in next 10 years.

Summary of above Policy Trends.

As per the last 5 years trend in policy formation by government for Utility industry it is clear that India is bullish on renewable energy and is in a good path to achieve its targets as currently 50% of electrical capacity is handled by renewable energy sources, and India is in line to double the renewable capacity by next 5 year, also government is focusing on private sector involvement for energy production and distribution to create competition and efficiency in the sector.

Overall Automobiles & Components industry

Average PE ratio :

27.5

Total Market Cap of Utilities Sector industry in India :

₹25.04 Trillion

Growth Rate of Utilities Sector in India :

6%

Revenue Growth of Utilities Sector in India :

8.68%

Electric Utilities

Average PE ratio :

24.7

Total Market Cap of Electric Utilities in India :

~ ₹20.21 Trillion

Growth Rate of Electric Utilities in India :

5% (overall) and 16% for Renewable Energy

Revenue Growth of Electric Utilities in India :

17.84%

Gas Utilities

Average PE ratio :

17.3

Total Market Cap of Gas Utilities in India :

~ ₹4.8 Trillion

Growth Rate of Gas Utilities in India :

10.50%

Revenue Growth of Gas Utilities in India :

3.5%

• Despite of strong focus on renewable energy sources, more coal capacity is being added to meet record high demand and for 24x7 reliability also states and discoms are signing longer coal PPAs to cover peak demands.
• Demand for rooftop solar for homes has increased tremendously mostly after PM Surya Ghar which provides subsidies and up to 300 free units, because of this residential solar capacity has doubled from 4.9GW to 11GW currently.
• To increase efficiency smart meters are being installed at a fast pace of 80k meter installation per day.
• Power Demand is expected to grow at a good rate of 6.5% annually.
• Government if focusing more and more on reducing power losses by increasing efficiency and other measures.

• Energy Demand is growing by 8% year on year and is expected to grow more as rapid urbanisation and industrialisation happens in India.
• Solar Panel prices are expected to fall in coming years with technological advancement, decline in manufacturing cost, and intensified competition.
• To overcome peak hour demand, the government is bullish on Nuclear power which may try to replace coal based power production and the government has a target of 100GW capacity by Nuclear alone by 2047.

Product Dependencies

• Coal needs to be imported even after India is world’s second largest coal producer
• Rare Earth magnets for wind turbines
• Transmission components for wind turbines face supply shortages.
• High Dependencies on PV modules/cells which are bound by the Chinese supply chain.

Country Dependencies

• China (Solar Cells/modules, Li-ion batteries, upstream wafers)
• South Africa and Australia (Coal)

India’s Utility sector is one of the most essential for smooth running of the country and other sectors as well, as it provides the most basic things which is electricity, gas and water, among those Electricity is the highest market cap sub-industry among the others. India is currently transforming its power sources from fossil fuels based energy to renewables and non-fossil fuels based energy like nuclear power. Solar energy is one of the largest contributors among the others in the renewable industry, multiple government policies and incentives are growing the renewable industry by 16% and it’s on its way to double its current capacity by 2030. By overall policy structure and ongoing development India is trying to reduce its foreign dependencies on energy by as currently India is Net importer of coal despite being world’s second largest coal producer. But transitioning to renewables comes with its own challenges like dependencies on China for major parts of solar panels and other semiconductor and renewable growth is fueled by high incentives and high initial investment by government in infrastructure and with change in government in every 5 year policy may change if new government is form which may impact performance of renewable industry.