5 Undervalued Renewable Energy Stocks to Add to Your Watchlist

The global shift towards sustainable energy is accelerating and at its heart lies the booming renewable energy sector.

With governments worldwide coming out with supportive policies and technological advancements driving down costs, clean energy sources like solar and wind are a big investment opportunity.

The market recognises this opportunity and has bid up the prices of renewable energy stocks. Finding truly promising investments in this sector can be challenging.

In this editorial, we highlight 5 undervalued renewable energy stocks that smart investors should be watching closely.

#1 Waaree Energies

First on the list is Waaree Energies, a manufacturer of solar PV modules in India. Its installed capacity is 15 GW and 5.4 GW for cells, as of FY25.

Its portfolio of solar energy products includes multicrystalline modules, monocrystalline modules, and TOPCon modules, and building-integrated photovoltaic (BIPV) modules.

The company manufactures its PV modules under the "Waaree" brand.

It also provides engineering, procurement, and construction (EPC) solutions and operations and maintenance (O&M) services.

Waaree is expanding into other energy transition areas. The company's board has approved an investment in green hydrogen and electrolyser businesses and is also exploring the inverter market.

At the price of Rs 2,927, the stock trades at a price to earnings (PE) ratio of 44, which is lower than the industry average of 61.

The price to book ratio (PB) of the stock is 8.7, well below the industry average of 12.

The company boasts a 5-year average return on equity (ROE) of 30% and a 5-year sales compound annual growth rate (CAGR) of 49%.

Similarly, its net profit has grown at a CAGR of 192% over the past 3 years and at a CAGR of 117% over the past 5 years.

The company has guided for a robust earnings before interest, taxes, depreciation, and amortization (EBITDA) in the range of Rs 55-60 bn.

The management's confidence is grounded in a strong and growing order book, an integrated value chain, and proven execution ability. As of June 2025, the order book stood at 26.5 gigawatts (GW), valued at about Rs 500 bn.

They expect to maintain or improve margins, due to increasing focus on the retail segment in the domestic market, optimising costs through new supply chains, improving operational efficiencies, and the integration of cell manufacturing.

Future plans include an additional 4.8 GW module manufacturing capacity by FY27 and a 6 GW integrated wafer, cell, and module factory projected to be operational by 2027.

For more details, check out Waaree Energies' financial factsheet.

#2 Premier Energies

Second on the list is Premier Energies, an integrated solar cell and module manufacturer with 29 years of experience in the industry.

Its annual installed capacity is 2 GW for solar cells and 5.1 GW for solar modules across 5 facilities in Hyderabad, India. The company intends to integrate backwards into wafer production with a 2 GW per annum facility.

At the price of Rs 1,058, the stock trades at a PE of 50, which is lower than the industry PE of 66.

If we look at the price to sales (PS) ratio it's trading at around 7.5, whereas its median has been 9.4 since listing.

The company aims to achieve a 10 GW integrated manufacturing capacity across ingot, wafer, cell, and module production by 2028. This also includes a strategic entry into the battery energy storage (BESS) and inverter businesses.

Over the next 3 years, the total estimated capex is Rs 125 bn. This is expected to be funded through internal accruals and existing cash reserves.

As of March 2025, Premier Energies had an order book of Rs 84.5 bn.

The demand for domestic content requirement (DCR) modules remains very strong, driven by government schemes like Surya Ghar, Kusum, and CPSU.

With ALMM on cells from June 2026 onwards, more market segments are expected to open up, potentially leading to a nearly 100% DCR market by 2027.

For more details, check out Premier Energies' financial factsheet.

#3 Sterling & Wilson Renewable Energy

At number three comes Sterling & Wilson Renewable Energy. It's a global pure-play, end-to-end solar engineering, procurement, and construction (EPC) firm.

The company manages all aspects of project execution, from conceptualising to commissioning, and specialises in complete turnkey and rooftop solutions for renewable energy EPC projects.

It has a significant international presence, with offices in 28 countries and operations across key markets such as India, Southeast Asia, the Middle East, Africa, Europe, Australia, and the Americas.

In recent developments, the company has also expanded its offerings to include Battery Energy Storage Solutions (BESS) and wind EPC for hybrid projects, aiming to provide comprehensive solutions in the evolving renewable energy market.

At the price of Rs 299, the PS of the stock is 1.1, well below its 3-year average of 2.9.

Looking at PE or PB won't give a good picture, as the company was loss-making till FY24 and has only recently turned profitable.

In terms of revenue growth, the company expects to exceed its FY25 revenue by 15-20% in FY26, due to its existing unexecuted order value and anticipated new orders. The management expects order intake for FY26 to grow 15-20%.

The India order pipeline remains very strong, with nearly 22-23 GW of orders expected to be bid out during 2025 or within the next 6-9 months.

The company's O&M portfolio stands at 8.7 GW as of March 2025.

Beyond solar EPC, the company will continue to target BESS and select wind projects.

In the international market, the focus is on select projects in MENA and Europe, with a target range of Rs 10-20 bn in orders from these regions.

For more information, check out Sterling & Wilson Renewable Energy's financial factsheet.

#4 Websol Energy System

Fourth on the list is Websol Energy System, established in 1994. It's one of the leading manufacturers of high-efficiency solar cells and solar modules in India.

The company's core business involves the production of these solar components from its facility in the Falta Special Economic Zone in West Bengal.

This facility has a fully automated 600 MW Mono PERC solar cell line and a 550 MW Solar Module production capacity.

Websol serves a broad market, securing significant orders for solar modules across Indian and International markets, with shipments scheduled for the US, UK, and Africa.

It has specific agreements too such as a 100 MW solar cell purchase agreement with Luminous Power Technologies and a 250 MW solar module master supply agreement with C.R.I Pumps.

The company has a target of 280 GW of solar capacity by 2030, driven by strong market demand and supportive government policies.

At the current price of Rs 1,399, the stock trades at a PE of 39, which is lower than the industry average of 130.

Regarding its financial performance, the company has a 3-year average ROE of 23% and a 3-year sales CAGR of 39%.

Its net profit has grown at a CAGR of 160% over the past 3 years.

The company seems to be at an inflection point in its existence, having charted an aggressive growth path of more than a 10-fold manufacturing capacity expansion.

This major expansion is expected to be commissioned within just three years.

Websol's current solar cell manufacturing capacity is 600 MW and it plans to increase this to 2,400 MW (2.4 GW) by 2026.

A 600 MW Mono PERC Bifacial Solar Cell line is expected to start production in Q1 FY26. The company aims to increase capacity utilisation to 95%.

The proposed backward integration into the manufacture of ingots and wafers is expected to strengthen margins and expand the company's projected profitability.

For more information, check out Websol Energy System's financial factsheet.

#5 K.P. Energy

Fifth on the list is K.P. Energy, a prominent Balance of Plant (BOP) solution provider in wind energy and wind-solar hybrid power projects.

The company offers end-to-end solutions, spanning from project conceptualisation and development to commissioning.

In addition to engineering, procurement, construction, and commissioning (EPCC) services, which account for 95% of the revenue, K.P. Energy also provides operations and maintenance (O&M) services for the BOP infrastructure.

The company further strengthens its business model with an independent power producer (IPP) portfolio, owning and operating its own wind and solar power generation assets, which provides a recurring annuity revenue stream.

The stock is trading at a PE of 33, lower than other pure-play renewable energy stocks.

Its PS is 4, which is close to its 3-year median PS of 3.1, compared to a range of 5 to 8 back in 2024.

Regarding its financial performance, the company has a 3-year average ROE of 42% and a 3-year sales CAGR of 55%.

Its net profit has grown at a CAGR of 89% over the past 3 years.

K.P. Energy has 2.26+ GW of projects in hand or over 2 GW of order book worth about Rs 33.5 bn, with Rs 31.5 bn remaining to be executed. This substantial order book is expected to provide smooth revenues through multi-year projects.

The company is confident in executing the remaining order book within the next 15 months. It also has a healthy bid pipeline of 3 GW of orders, currently under negotiation, which could become orders in 3-6 months.

K.P. Energy expects its EBITDA margins to remain largely consistent, with no significant variance anticipated.

The company is strategically expanding its Independent Power Producer (IPP) portfolio, with current operational assets at 48.5 MW. It aims to reach 100 MW in IPP capacity within the next two financial years.

A newly commissioned 2.8 MW within its IPP segment is expected to generate an additional Rs 220-230 m in annual revenue.

It's also looking into BESS, though this is in a nascent stage. The overall group target is an ambitious 10+ GW by 2030.

For more information, check out K.P. Energy's financial factsheet.

Conclusion

There is no doubt that India's renewable energy sector is on a strong growth trajectory, supported by favourable policies, rising demand, and the global shift towards cleaner technologies.

However, with multiple players announcing aggressive capacity expansion-especially in solar modules, cells, and related infrastructure-the risk of overcapacity persists.

If supply outpaces demand or government procurement lags, it could put pressure on utilisation rates, pricing, and margins in the medium term.

So, while these stocks offer exciting opportunities, prudent investing requires a balance of optimism and risk awareness. Monitor execution, policy developments, and supply-demand dynamics closely.

Conduct thorough research on financials and corporate governance before making investment decisions, ensuring they align with your financial goals and risk tolerance.

Happy investing.

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