Top Utility Stocks in India: The Utility sector includes companies that provide services like electricity, gas, and water or those that operate as producers or distributors of power. These companies are usually large and may provide one or increasingly of the supra utilities. Some of them rely on wipe and renewable energy sources like wind turbines and solar panels.

Utility companies often operate with the government or under the trusteeship of the government. This acts as a windbreak to entry into the market and shields these companies from competition. Utilities have the tendency to be resistant to economic cycles considering their demand does not transpiration much when compared to most other industries, plane when economies take a downturn. Therefore, they act as defensive stocks.

Industry Overview

India has an installed power topics of 408.71 GW as of October 31, 2022, and it is the third-largest producer and consumer of electricity worldwide. According to an IBEF report, the growing population withal with increasing electrification and per-capita usage will provide remoter impetus. The power sector witnessed a uplift in FDI investments as 100% FDI investment is unliable in the sector.

According to the National Infrastructure Pipeline 2019-25, the energy sector projects rumored for the highest share 24% out of the total expected wanted expenditure of ₹ 111 lakh crore. The Inside Electricity Authority (CEA) estimates India’s power requirement to grow to reach 817 GW by 2030. The government plans to establish a renewable energy topics of 500 GW by 2030.

The consumption of natural gas in India is expected to grow by 25 billion cubic meters, registering an yearly stereotype yearly growth of 9% until 2024. The government has unliable 100% Foreign Direct Investment (FDI) in upstream and private sector refining projects. It has moreover tried an order permitting 100% FDI under the will-less route for oil & gas PSUs.

It is forecasted that natural gas consumption is going to increase at a CAGR of 12.2% to 550 MCMPD by 2030 from 174 MCMPD in 2021. India is planning to double its oil refining topics to 450-500 million tonnes by 2030.

Top Utility Stocks in India

Most utility stocks are financially stable companies that pay upper dividends to their shareholders. Generally, those who invest in utility stocks do it to generate income through dividends. Typically, retirees and inobtrusive investors gravitate towards these stocks. In this article, we are going to take a squint at some of the top Utility Stocks in India. These companies are sorted based on their market capitalization.

Top Utility Stocks in India #1 – NTPC

NTPC (National Thermal Power Corporation) Ltd generates and sells zillion power to state power utilities. In addition, it provides consultancy, project management & supervision, energy trading, oil & gas exploration, and coal mining. It is India’s largest power utility with an installed topics of 71,594 MW (including JVs) and plans to wilt a 130 GW visitor by 2032. NTPC became a Maharatna visitor in 2010.

NTPC has been operating its plants at high-efficiency levels. The visitor had 16.78% of the total national topics as of 31 March 2020. It contributes 20.96% of the total power generation due to its focus on upper efficiency.

Revenue & Profitability

The company’s revenue and profit show an increasing trend. Its revenue grew at a 4-year CAGR of 10.79% and its net profit grew at a 4-Year CAGR of 12.14%. Its net profit margin has moreover grown, albeit marginally.

Key Metrics

NTPC is a large-cap visitor with a market capitalization of ₹ 1,60,043.47 crores. Its shares have a squatter value of ₹ 10 and were trading at ₹ 173 levels at the time of writing this article. They were trading at a price-to-earnings ratio (P/E) of 9.03, which is lower than the industry P/E of 19, indicating that the stock might be undervalued as compared to its peers.

The visitor has earnings per share (EPS) of ₹ 18.28 and a upper dividend yield of 5.19%. However, it has a low return on probity of 12.38%. It has low a current ratio of 0.91, but companies in this sector tend to have a low current ratio. Further, it has a upper debt-to-equity ratio of 1.57. However, NTPC is a capital-intensive visitor and such companies usually have a upper debt-to-equity ratio.

Currently, its promoters hold a 51.10% stake in it, followed by domestic institutional investors (DIIs) at 30.63%, foreign institutional investors (FIIs) at 15.65%, and retail investors at 2.62%.

Top Utility Stocks in India #2 – Power Grid Corporation of India

Power Grid Corporation of India (PGCI) is a Maharatna CPSE and India’s largest electric power transmission company. It is engaged in the planning, implementation, operation, and maintenance of Inter-State Transmission System (ISTS), Telecom, and consultancy services.

The visitor moves large blocks of power from the inside generating agencies and areas that have surplus power to load centers within and wideness regions. It is under the legalistic tenancy of the Ministry of Power, Government of India. In addition, it executes several strategically important projects, prescribed to the visitor by GoI on a nomination basis.

PGCI has over 150 domestic clients and over 25 global clients in increasingly than 23 countries. it has a telecom network of 79,999 km wideness 256 cities.

Revenue & Profitability

The company’s revenue and profit show an increasing trend. Its revenue grew at a 4-year CAGR of 8.57% and its net profit grew at a 4-Year CAGR of 19.67%. Its net profit margin has moreover grown considerably.

Key metrics

PGCI is a large-cap visitor with a market capitalization of ₹ 1,49,170.06 crores. Its shares have a squatter value of ₹ 10 and were trading at ₹ 217 levels at the time of writing this article. They were trading at a price-to-earnings ratio (P/E) of 9.55, which is lower than the industry P/E of 19, indicating that the stock might be undervalued as compared to its peers.

The visitor has earnings per share (EPS) of ₹ 22.39 and a upper dividend yield of 6.8%. In addition, it has a upper return on probity of 23.02%. It has low a current ratio of 0.73, but companies in this sector tend to have a low current ratio. Further, it has a upper debt-to-equity ratio of 1.77. However, PGCI is a capital-intensive visitor and such companies usually have a upper debt-to-equity ratio.

Currently, its promoters hold a 51.34% stake in it, followed by foreign institutional investors (FIIs) at 32.75%, domestic institutional investors (DIIs) at 12.75%, and retail investors at 3.16%.

Top Utility Stocks in India #3 –Tata Power

Tata Power (formerly Tata Electric) is one of India’s largest integrated power companies, present wideness the unshortened power value uniting of conventional & renewable energy, power services, and next-generation consumer solutions including solar rooftop, EV charging stations, and home automation. The visitor has pioneered technology adoption in the utility sector. It has many firsts to its credit, including setting up one of India’s first hydroelectric power stations in 1915.

The visitor has 12,772 MW of generation topics where 30% comes from wipe and untried sources. It is continuously delivering untried technology for smart consumers with energy-saving power services, and multi-city EV charging stations and is India’s #1 rooftop solar provider.

Revenue & Profitability

The company’s revenue shows an increasing trend, however, its net profit has declined over a period of five years. Its revenue grew at a 4-year CAGR of 12.38% and its net profit declined at a CAGR of -7.79%. The company’s net profit margin has moreover decreased.

Key Metrics

Tata Power is a large-cap visitor with a market capitalization of ₹ 65,440.55 crores. Its shares have a squatter value of ₹ 1 and were trading at ₹ 207 levels at the time of writing this article. They were trading at a price-to-earnings ratio (P/E) of 21.37, which is higher than the industry P/E of 19, indicating that the stock might be overvalued as compared to its peers. This could moreover midpoint that investors are willing to pay a higher price for Tata Power’s future earnings.

The visitor has earnings per share (EPS) of ₹ 9.58 and a dividend yield of 0.73%. Further, it has a low return on probity of 3.15%. It has low a current ratio of 0.8, but companies in this sector tend to have a low current ratio. Further, it has a upper debt-to-equity ratio of 2.12. Tata Power is a capital-intensive visitor and such companies usually have a upper debt-to-equity ratio. However, its debt-to-equity ratio is higher than its peers.

Currently, its promoters hold a 46.86% stake in it, followed by retail investors at 28.85% domestic institutional investors (DIIs) at 14.65%, and foreign institutional investors (FIIs) at 19.63%.

Top Utility Stocks in India #4 – GAIL

GAIL (India) is a Government of India undertaking and an integrated natural gas visitor in India. It has diversified interests wideness the natural gas value uniting of trading, transmission, LPG production & transmission, LNG re-gasification, petrochemicals, municipality gas, E&P, and so on. The visitor operates a network of virtually 14617 km of natural gas pipelines spread wideness the country. GAIL commands ~70% market share in gas transmission and has a gas trading share of over ~ 50% in India. In addition, it is expanding its presence in renewable energy like solar, wind, and biofuel.

Revenue & Profitability

The company’s revenue and profit show an increasing trend. Its revenue grew at a 4-year CAGR of 14.22% and its net profit grew at a 4-Year CAGR of 26.41%. Its net profit margin has moreover grown over a period of five years.

Key Metrics

GAIL is a large-cap visitor with a market capitalization of ₹ 62,956.58 crores. Its shares have a squatter value of ₹ 10 and were trading at ₹ 95 levels at the time of writing this article. They were trading at a price-to-earnings ratio (P/E) of 7.46, which is lower than the industry P/E of 12, indicating that the stock might be undervalued as compared to its peers.

The visitor has earnings per share (EPS) of ₹ 12.83 and a upper dividend yield of 6.42%. However, it has a low return on probity of 17.97%. It has a current ratio of 1.08. Further, it has an platonic debt-to-equity ratio of 0.12.

Currently, its promoters hold a 51.91% stake in it, followed by domestic institutional investors (DIIs) at 23.88%, foreign institutional investors (FIIs) at 18.04%, and retail investors at 6.17%.

Top Utility Stocks in India #5 – NHPC

NHPC is a Miniratna category I public sector utility and is the largest hydropower minutiae organization in India. It primarily generates and sells power in zillion to various power utilities. It has diversified in the field of Solar & Wind energy development. The visitor had a total installed topics of 7097.20 MW as of 31st January 2022. NHPC’s hydro share of 6971.20 MW comes to well-nigh 14.88% of the country’s total installed Hydro topics of 46850.18 MW.

Revenue & Profit

The company’s revenue and profit show an increasing trend. Its revenue grew at a 4-year CAGR of 4.33% and its net profit grew at a 4-Year CAGR of 8.81%. Its net profit margin has moreover grown over a period of five years.

Key Metrics

NHPC is a large-cap visitor with a market capitalization of ₹ 40,180.14 crores. Its shares have a squatter value of ₹ 10 and were trading at ₹ 39 levels at the time of writing this article. They were trading at a price-to-earnings ratio (P/E) of 10.45, which is lower than the industry P/E of 19, indicating that the stock might be undervalued as compared to its peers.

The visitor has earnings per share (EPS) of ₹ 3.83 and a upper dividend yield of 6.51%. It has a return on probity of 14.38 and a current ratio of 1.02. Further, it has an platonic debt-to-equity ratio of 0.96.

Currently, its promoters hold a 70.95% stake in it, followed by foreign institutional investors (FIIs) at 6.82%, domestic institutional investors (DIIs) at 16.17%, and retail investors at 6.06%.

In Closing

In this article, we took a squint at some of the top utility stocks in India. These companies are capital-intensive and financially strong, making them an entry windbreak for new players. This is one of the moats that these companies enjoy. They usually work under the trusteeship of the government. However, we saw that Tata Power, a private visitor from one of the largest conglomerates in India is moreover a major player in the utility sector. That’s all for this article, folks. We hope to see you virtually and happy investing until next time.

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