India's net-zero push to boost RIL, Waaree Energies, SWSolar: Analysts

Nuvama on energy sector: India’s march towards clean energy is riddled with paradoxes, but analysts believe the transition will open up strong opportunities for companies like Reliance Industries (RIL), Waaree Energies and Sterling & Wilson Renewables (SWSolar).

 

On the bourses at 9:40 AM, Waaree Energies raced 2.15 per cent higher to ₹3,712.75, and SWSolar moved up 1.36 per cent to ₹267.60. RIL, meanwhile, was trading 0.2 per cent lower at ₹1,391.50.

 

A Nuvama Institutional Equities note, after hosting Gauri Jauhar, executive director of energy transitions & clean tech consulting at S&P Global, highlighted both challenges and winners from India’s energy shift.

 

“India’s energy mix in 2024 was dominated by fossil fuels (77 per cent) with renewables at just 2 per cent; by 2050 though, fossil fuels are projected to drop to 66 per cent and renewables to rise to 16 per cent,” said Jal Irani, Akshay Mane and Tanay Kotecha of Nuvama, in a note dated September 12.

 

Unlike the US and Europe, where natural gas played a big transitional role, India has struggled to deploy gas in its power sector. Analysts said, “coal-to-gas transition is vital, as scalability and commerciality limit a direct coal-to-renewables shift.”

 

Energy security has further complicated the story. Global majors like BP, Shell and TotalEnergies have invested heavily in renewables, but returns have been “muted,” pulling some attention back to fossil fuels.  Track Stock Market LIVE Updates 

 

On the positive side, policy support has reduced India’s dependence on biomass, from 38 per cent in the 1990s to 19 per cent in 2024, through schemes like Pratyaksh Hanstantrit Labh (PAHAL) and direct benefit transfers (DBT). Still, analysts believe a “balanced mix of fossil fuels and renewables will remain key for decades.”

 

But the emissions outlook remains tough. According to S&P Global Commodity Insights, there is a “43 per cent gap between India’s current emission reduction commitments and the 2030 target.” Even under the most ambitious pledge, emissions are expected to fall only 5 per cent by 2030 compared to 2019 levels.

 

That means new technologies will be crucial. “Capital allocation must increasingly pivot towards CCUS and GH2 as material net-zero technologies,” Jauhar said, referring to carbon capture, utilisation and storage (CCUS) and green hydrogen (GH2).

 

Water use adds another layer of risk. “CCUS alone can lift water usage by 25-40 per cent,” analysts cautioned, noting that India’s energy sector already consumes nearly 12 trillion litres, out of a projected 52 trillion litres demand by 2030.

 

Despite these challenges, investor appetite for green energy remains strong. Even with lower returns during the early years, inflows continue. “We argue energy transition will benefit RIL, Waaree Energies and Sterling & Wilson Renewables on the back of large order inflows,” analysts at Nuvama said.