Top 5 Nuclear Power Stocks to Watch Out in 2024

Nuclear energy is one of the cleanest sources of power available to mankind.

This is the reason why the Indian government has decided to expand its nuclear power generating capacity from 7,480 megawatts (MW) to 22,480 MW by 2031.

The government is planning to construct 11 nuclear plants to increase nuclear energy's share of the energy mix.

While companies directly involved in nuclear energy will benefit from this, companies that supply to this sector also get a slice of the pie.

We recently wrote about the top 5 microcap stocks involved in this space.

In today's article, we'll look at five more established names in the nuclear energy sector.

#1 WPIL

First on the list is WPIL.

The company is engaged in the entire value chain of pumps and pumping systems from concept to commissioning.

The company also supplies nuclear power plants with cooling water pumps, auxiliary cooling water pumps, vertical turbines, and mixed flow pumps.

WPIL manufactures all its products in its three manufacturing units in India. Through its subsidiaries, it also has a presence in several countries, such as South Africa, Zambia, Australia, Singapore, UAE, France, and Italy.

In 2023, the company successfully acquired an alloy and stainless steel castings foundry, which gave it fully backward integrated operations, and enabled it to cut costs.

In the last five years, WPIL's revenue has grown at a compound annual growth rate (CAGR) of 9.1%, driven by high orders. The net profit also grew at a CAGR of 7% during the same period.

The company's strong domestic order book of Rs 38 billion (bn) and international order book of Rs 4.5 bn proves revenue visibility in the medium term.

In addition, its continued focus on the Jal Jeevan Mission, Amrut 2, and the government's nuclear energy mission will drive its growth in the medium term.

To know more, checkout WPIL's financial factsheet and latest quarterly results.

WPIL Financials (2018-2023)

	2018-2019	2019-2020	2020-2021	2021-2022	2022-2023
Revenue (Rs m)	11,771	9,242	10,139	11,941	18,196
Revenue Growth (%)		-21.50%	9.70%	17.80%	52.40%
Net Profit (Rs m)	1,566	527	761	1,180	2,200
Net Profit Margin (%)	13.50%	5.80%	7.60%	10.00%	12.30%
Return on Equity (RoE)	38.40%	11.60%	14.00%	18.60%	27.20%
Return on Capital Employed (RoCE)	54.70%	15.20%	18.70%	24.20%	35.50%

Source: Equitymaster

#2 MTAR Technologies

Second on the list is MTAR Technologies.

The company manufactures complex components such as fuel machining heads, drive mechanisms, cryogenic engines, power units, hydrogen boxes, electrolysers, and high-precision sheet metal.

Its products are used in various industries, including nuclear, space, defence, and clean energy.

The company contributed to several notable projects, including the Mars Orbiter Mission Spacecraft and ISRO's Chandrayaan II mission.

The company earns close to 14% of its revenue from the nuclear segment, 17% from space and defence, and 63% from clean energy.

Given that its major revenue sources are high-growth sectors like nuclear, clean energy, and defence, the company's revenue tripled in the last five years and grew by a CAGR of 26.1%.

The net profit also grew by a CAGR of 21.4%, driven by operational efficiency.

At the end of December 2023, the company's order book stood at Rs 11 bn, of which 13% of the orders were from the nuclear power sector.

It has recently invested in a new sheet metal fabrication plant, which will help the company boost sales and secure more orders.

To know more, checkout MTAR Technologies' financial factsheet and latest quarterly results.

MTAR Technologies Financials (2018-2023)

	2018-2019	2019-2020	2020-2021	2021-2022	2022-2023
Revenue (Rs m)	1,859	2,181	2,477	3,308	5,932
Revenue Growth (%)		17.30%	13.60%	33.50%	79.30%
Net Profit (Rs m)	392	313	461	609	1,034
Net Profit Margin (%)	21.30%	14.70%	18.70%	18.90%	18.00%
Return on Equity (RoE)	16.70%	13.90%	9.70%	11.70%	16.70%
Return on Capital Employed (RoCE)	19.60%	22.30%	14.80%	16.30%	22.20%

Source: Equitymaster

#3 Venus Pipes and Tubes

Next on the list is Venus Pipes and Tubes.

The company manufactures stainless steel pipes and tubes.

Its products are mainly bifurcated into seamless pipes and welded pipes, which it supplies to many niche user industries, including oil and gas, thermal, solar, and nuclear power, refinery and petrochemical, dairy, defence, aerospace, and automobile.

The company is also manufacturing value-added premium products such as hygienic SS and titanium-grade tubes to capture the growth in the nuclear sector.

Venus Pipes and Tubes has one manufacturing facility in India, which can produce 9,600 metric tonnes of seamless pipes and 24,000 metric tonnes of welded pipes.

It plans to increase its seamless pipe capacity by 400 metric tonnes each month until the financial year 2024.

The company also plans to undertake a backward integration initiative for its hollow pipes to reduce import dependency and expand its margins.

In the last five years, the company's revenue and net profit grew at a CAGR of 35.7% and 63.4%, respectively, due to high sales volume driven by capacity expansion.

With anti-dumping duty levied on seamless pipes and tubes for China's products, the company expects its revenue to go up further due to high demand.

A high-order book of Rs 2 bn, along with capacity expansion and high demand from user industries, will drive the company's revenue and net profit growth in the medium term.

To know more, checkout Venus Tubes and Pipes' financial factsheet and latest quarterly results.

Venus Pipes and Tubes Financials (2018-2023)

	2018-2019	2019-2020	2020-2021	2021-2022	2022-2023
Revenue (Rs m)	1,205	1,793	3,120	3,891	5,548
Revenue Growth (%)		48.80%	74.00%	24.70%	42.60%
Net Profit (Rs m)	38	41	236	317	442
Net Profit Margin (%)	3.20%	2.30%	7.60%	8.20%	8.00%
Return on Equity (RoE)	30.80%	25.40%	59.20%	24.60%	13.70%
Return on Capital Employed (RoCE)	30.30%	31.70%	62.50%	35.00%	20.00%

Source: Equitymaster

#4 Kilburn Engineering

Fourth on the list is Kilburn Engineering.

The company designs, manufactures, and commissions customised process equipment such as dryers, coolers, fabricated equipment, and heat transfer systems.

Its products are found in industries like nuclear power, chemicals, steel, petrochemicals, and food processing.

Although the company earns the majority of its revenue from India, it has a presence in several countries, including the USA, France, Germany, Netherlands, Hungary, Thailand, and Brazil.

In the last five years, the company's revenue has grown at a CAGR of 15.1%, driven by high orders. The net profit also grew by a CAGR of 38.5%.

The company's order book was Rs 2.3 bn at the end of December 2023, indicating sufficient revenue visibility.

It plans to acquire a leading waste heat recovery systems company to reduce thermal energy costs across all its processes.

It is also exploring new applications of its products in existing user industries.

Given the company's diversified product portfolio with a diversified client base, strong order book, and expansion plans, the revenue is expected to grow in the medium term.

To know more, checkout Kilburn Engineering's financial factsheet and latest quarterly results.

Kilburn Engineering Financials (2018-2023)

	2018-2019	2019-2020	2020-2021	2021-2022	2022-2023
Revenue (Rs m)	1,639	1,503	979	1,244	3,315
Revenue Growth (%)		-8.30%	-34.90%	27.10%	166.50%
Net Profit (Rs m)	59	52	-917	16	301
Net Profit Margin (%)	4.10%	3.90%	-10.40%	1.30%	13.60%
Return on Equity (RoE)	6.00%	5.00%	-192.20%	2.20%	28.80%
Return on Capital Employed (RoCE)	25.80%	23.50%	-101.20%	9.20%	29.80%

Source: Equitymaster

#5 Kirloskar Oil Engines

Last on the list is Kirloskar Oil Engines.

The company is a flagship company of Kirloskar group and manufactures diesel engines, diesel generator sets, and diesel, petrol, and kerosene-based pump sets.

Through its products, it caters to several industries, including nuclear power, agriculture, thermal power, and other industrial sectors.

At present, the company generates over 42% of its revenue from the power sector, which includes orders from nuclear power companies.

In the last five years, the company's revenue has grown by a CAGR of 6.4%, driven by high orders. The net profit also grew by a CAGR of 8.6%.

Currently, the company is focusing on expanding its product portfolio by working on high-horsepower engines and cylinder engines.

It also plans to undertake a capex of Rs 3.5 bn in the next two years for capacity expansions and plant consolidation.

Given the company's strong brand, high order book, and capex investments, the revenue and profit will grow in the medium term.

To know more, check out Kirloskar Oil Engines' financial factsheet and latest quarterly results.

Kirloskar Oil Engines Financials (2018-2023)

	2018-2019	2019-2020	2020-2021	2021-2022	2022-2023
Revenue (Rs m)	36,915	34,220	33,215	40,468	50,440
Revenue Growth (%)		-7.30%	-2.90%	21.80%	24.60%
Net Profit (Rs m)	2,196	1,879	1,974	1,709	3,317
Net Profit Margin (%)	6.10%	5.60%	6.00%	4.30%	6.60%
Return on Equity (RoE)	12.90%	10.80%	10.30%	8.30%	14.50%
Return on Capital Employed (RoCE)	20.10%	14.30%	13.70%	10.80%	16.10%

Source: Equitymaster

Should You Invest in Nuclear Power Stocks?

Nuclear power is one of the cleanest sources of energy in the world. Despite this, it only accounts for 3% of India's electricity generation.

This ensures a high scope of growth for the companies directly and indirectly involved in this sector.

However, it is important to treat nuclear power companies with the same caution as other companies.

You must do your due diligence and choose only fundamentally strong companies for your portfolio.

Remember that only fundamentally strong companies have the potential to give high returns in the long term.

Happy Investing!

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...