The oil and gas (energy) sector is one of India’s key industries, playing a vital role in the country’s overall economic development. India’s growing energy needs are directly linked to its economic growth, which is expected to drive higher demand for oil and gas, making the sector an attractive investment opportunity.
As of 2023, India is the third-largest oil consumer globally. The government has introduced several policies to meet the increasing demand, including allowing 100% foreign direct investment (FDI) in areas such as natural gas, petroleum products, and refineries. In this blog, we will explore the best energy stocks for February 2025 based on their 5-year compounded annual growth rate (CAGR).
Energy Sector Overview in India
India’s energy demand is expected to almost double, reaching 1,123 million tonnes of oil equivalent by 2040, driven by the anticipated growth in GDP to $8.6 trillion. Over the last decade, India’s refining capacity has increased from 215.1 million Metric Tons Per Annum (MMTPA) to 256.8 MMTPA, with a forecasted rise to 309.5 MMTPA by 2028.
India is expected to be a major contributor to the global growth in non-OECD petroleum consumption. Petroleum product consumption has grown from 158.4 million metric tons (MMT) in 2013-14 to 234.3 MMT in 2023-24.
In FY23, India’s petroleum consumption averaged nearly 4.44 million barrels per day (BPD), up from 4.05 million BPD in FY22. During April-October 2023, the country’s crude oil production was 2.69 million BPD.
Best Energy Stocks in February 2025 Based on 5Y CAGR
Note: The top energy stocks have been sorted based on 5Y CAGR and as of January 29, 2025, and market capitalisation of over ₹5,000 Crore
Overview of 5 Top Energy Stocks in India in February 2025
1. Adani Power (APL)
Adani Power (APL), a part of the Adani Group, is India’s biggest private thermal power producer. The company and its subsidiaries sell the electricity generated from these plants through long-term Power Purchase Agreements (PPAs), short-term PPAs, and on the open market.
In the quarter ending September 2024, Adani Power reported a revenue of ₹10,264.26 crore and a net profit of ₹2,409.36 crore. For the quarter ending June 2024, the company recorded a revenue of ₹11,393.75 crore and a net profit of ₹2,454.88 crore.
Key metrics:
- Earning per share (EPS): ₹22.96
- Return on equity (ROE): 21.63%
2. JSW Energy Ltd
JSW Energy Ltd and its subsidiaries focus on generating power from their plants in Karnataka, Maharashtra, Nandyal, and Salboni. It serves as the holding company for the JSW group’s power sector. The company also has a joint venture involved in mining and an associate that manufactures turbines.
In December 2024, JSW Energy Ltd reported a revenue of ₹976.55 crore and a net profit of ₹217.19 crore. In comparison, for September 2024, the revenue was ₹967.40 crore, with a net profit of ₹285.75 crore.
Key metrics:
3. Tata Power Company Ltd
Tata Power Company Ltd is mainly focused on generating, transmitting, and distributing electricity. The company aims to generate all its electricity from renewable sources. It also makes solar roofs and plans to set up 100,000 electric vehicle (EV) charging stations by 2025. Tata Power is the largest vertically integrated power company in India.
For the quarter ending September 2024, Tata Power reported a revenue of ₹4,889.44 crore and a net profit of ₹1,008.61 crore. In comparison, the revenue for June 2024 was ₹5,774.12 crore, with a net profit of ₹737.04 crore.
Key metrics:
4. Adani Green Energy Limited
Adani Green Energy Limited, established in 2015, is a parent company with several subsidiaries that focus on renewable power generation. The company mainly deals with generating renewable energy and related activities.
In December 2024, Adani Green Energy Limited reported a revenue of ₹5,947 crore and a net profit of ₹557 crore. For September 2024, the revenue was ₹3,937 crore, with a net profit of ₹99 crore.
Key metrics:
5. NTPC Limited
NTPC Limited, along with its subsidiaries, associates, and joint ventures, is mainly focused on generating and selling bulk electricity to state power utilities. The company also provides consultancy, project management, energy trading, oil and gas exploration, and coal mining services.
In December 2024, NTPC reported a revenue of ₹41,352.27 crore and a net profit of ₹4,711.42 crore. In comparison, the revenue for September 2024 was ₹40,327.56 crore, with a net profit of ₹4,648.87 crore.
Key metrics:
Best Energy Stocks in February 2025 Based on Market Cap
| Name |
↓Market Cap (In ₹ Crore) |
1Y Return (%) |
5Y CAGR (%) |
Net Profit Margin (%) |
| Reliance Industries Ltd |
16,70,436.11 |
-14.75 |
13.06 |
7.59 |
| Oil and Natural Gas Corporation Ltd |
3,12,846.38 |
-1.51 |
16.36 |
8.12 |
| NTPC Ltd |
3,08,596.40 |
-1.94 |
23.22 |
11.32 |
| Power Grid Corporation of India Ltd |
2,64,090.65 |
11.81 |
21.52 |
33.13 |
| Adani Power Ltd |
1,91,767.00 |
-12.84 |
50.78 |
34.55 |
Note: The top energy stocks have been sorted based on market cap and as of January 29, 2025, and market capitalisation of over ₹5,000 Crore
Best Energy Stocks in February 2025 Based on Net Profit Margin
Note: The best energy stocks have been sorted based on net profit margin and, as of January 29, 2025, and market capitalisation of over ₹5,000 Crore
What are Energy Stocks?
Energy stocks in India represent companies involved in producing, distributing, and exploring energy resources such as oil, gas, and coal and renewable sources such as solar, wind, and hydropower. The energy sector is critical for economic growth and offers significant opportunities for investors. Here’s a deeper look at key aspects of energy stocks in India:
Key Factors to Consider When Choosing Energy Stocks
- Government Policies and Initiatives: Schemes like the PM Surya Ghar Yojana and financial support to renewable energy sectors are crucial.
- Financial Health: Investors should assess profitability ratios, debt levels, and revenue growth.
- Dividend Yield: For income-focused investors, companies with stable or growing dividends are attractive.
- Volatility: Global oil price fluctuations, regulatory changes, and geopolitical tensions can affect energy stock prices.
- Environmental Concerns: Companies must adapt to sustainability pressures, including reducing carbon emissions.
- Geopolitical Risks: Energy companies are vulnerable to risks arising from international relations, impacting supply chains and operations.
Who Should Invest in Energy Stocks?
- Long-Term Investors: Attractive for those seeking stable dividends, particularly from established companies.
- Value Investors: The energy sector offers cyclical opportunities to buy undervalued stocks during downturns.
- Risk-Tolerant Investors: Investors who can handle price volatility might find opportunities in renewable energy stocks or smaller companies.
Conclusion
Energy stocks present a strong opportunity for long-term growth, particularly as the world shifts toward sustainable energy sources. The sector plays a critical role in the global economy, with ongoing demand for oil, gas, and renewable energy creating opportunities. However, as with any investment, energy stocks carry risks, including market fluctuations, regulatory changes, and environmental concerns.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing.
