India's clean energy shift is soaring, but are high valuations hiding risks? Discover the opportunities and pitfalls driving this green boom.

India's renewable energy narrative has reached a new era of scale and urgency. In the last decade, the installed renewable capacity in the country increased three times -- from 75.5 GW in 2014 to 232 GW as of May 2025. Solar energy has more than quadrupled from a mere 2.8 GW to over 108 GW, while wind has doubled to 51 GW.

Prices have declined dramatically, and solar tariffs are almost 80% lower than a decade back, with renewables now one of the cheapest sources of energy. Now having set a goal of 500 GW of non-fossil capacity by 2030, India must install nearly 50 GW annually, making it one of the world's quickest build-outs.

This acceleration doesn't only benefit producers with renewable plants. It also creates a parallel opportunity in so-called ancillary stocks -- firms that make turbines, develop projects under EPC contracts, and provide modules and inverters. Ancillary stocks constitute the backbone of India's transition to clean energy, supplying the equipment and execution brawn needed for each new megawatt of capacity coming online.

In this context, the article looks at five ancillary companies that represent India's renewable expansion. The choice is based on scale, execution track record, and financial capacity to support growth as the country moves toward its 500 GW target. Smaller niche players and highly volatile small-caps have been left out to maintain focus on firms with visibility and resilience.

#1 Suzlon Energy

Suzlon Energy is one of India's leading wind turbine manufacturers and a vertically integrated renewable solutions provider. The company designs and manufactures key components like blades, towers, and generators, and also handles project execution from wind resource assessment to installation and power evacuation. Beyond manufacturing, Suzlon provides end-to-end O&M services, both in India and overseas.

Suzlon Energy is firmly consolidating its position as a holistic wind power solutions company. The company has rebuilt its finances with a net worth of Rs 6,542 crore, a cash surplus of Rs 1,620 crore, and access to banking lines of approximately Rs 7,000 crore, enabling it to execute on an expanding pipeline.

The first quarter of FY26 was Suzlon's strongest-ever beginning of a year, with a 444 MW supply. Its order book has reached 5.7 GW after ten consecutive quarters of increase, dominated by the S144 turbine that is fast gaining traction for its efficiency and low carbon emissions. Its 4.5 GW manufacturing capacity is deployed at full utilisation, while its services business has over 15 GW of projects under management with over 95% uptime.

Ancillary businesses are also gaining traction. Its subsidiary Renom has more than 3 GW of assets under its management, and the forging and foundry business reported three straight quarters of expansion. SE Forge, another subsidiary, is diversifying into non-wind applications and exports, and will gain from India's drive toward local procurement of wind parts.

One such driver here is the government's Approved List of Models and Manufacturers (ALMM), which mandates new wind projects to utilize equipment produced by approved local suppliers. This has taken away the previous price benefit that Chinese imports enjoyed.

Suzlon being completely compliant and indigenous in nature is well placed to benefit from this trend. Simultaneously, its R&D division is developing new turbines in the 3-4 MW segment that strike a balance between efficiency and logistics, while the export markets of the Middle East and Europe are being geared up for late FY26.

Land acquisition and grid connectivity issues still keep commissioning on the backburner, but the company is pre-acquiring land and sees returns in FY27. Management has reaffirmed FY26 growth guidance of 60%. With a growing order book, a strong service platform and increasing export opportunities, Suzlon is shifting its focus from turbine manufacturing to becoming a reliable, end-to-end partner in India's wind energy evolution.

#2 Inox Wind

Inox Wind is a part of the Inox Group. The company is engaged in the business of manufacturing Wind Turbine Generators (WTGs) and is a wind energy solutions provider servicing IPPs, Utilities, PSUs, Corporates and Retail Investors. Inox Wind Ltd is a fully integrated player in the wind energy market and provides end-to-end turnkey solutions.

Inox Wind has reinforced its leadership position as a solutions and ancillary provider in India's wind industry with its best-ever first-quarter profit in FY26. Revenue increased 32% year-on-year (YoY) to Rs 863 crore, earnings before interest, tax, depreciation, and amortisation (EBITDA) increased 39% to Rs 220 crore, and profit after tax nearly doubled to Rs 97 crore, underpinned by solid margins and operational execution of 146 MW in the quarter. The order book is currently at 3.1 GW, providing healthy revenue visibility for the next two years.

The company has strengthened its manufacturing base with a new nacelle and hub facility at Ahmedabad, a transformer division, and in-house crane services as part of its backward integration. These are in addition to its 2.5 GW manufacturing capacity spread over four plants, covering 2 MW and 3 MW turbine platforms with multiple variants. Also, the company obtained a license for the 4 MW class.

One of the biggest drivers for local players such as Inox Wind has been the government's ALMM for wind turbines and components. The new norm mandates sourcing 75-80% of key parts such as blades, towers, gearboxes and generators domestically, as well as placing R&D and data centres inside India. This puts local players on the same footing as cheap imports, conforming to the "Make in India" initiative and providing a better competitive advantage to Inox Wind.

The company has also finalized the merger of Inox Wind Energy with itself and is advancing on restructuring steps, such as the demerger of the substation business into Inox Renewable Solutions. Its subsidiaries are gaining scale: Inox Renewable Solutions has a pan-India EPC footprint, while 5.1 GW of renewable O&M contracts are managed by Inox Green Energy Services, which has inked a 182 MW contract with a large conglomerate recently.

Looking forward, Inox Wind has its sights set on achieving over 2 GW of project execution annually by FY27, driven by its order book and India's strategy of installing 80 GW of wind capacity in the next 7-8 years.

Management has emphasized its diversified order book across PSUs, independent power producers, and commercial & industrial clients, including turnkey and equipment supply projects. With a solid balance sheet, supportive home market policy, and synergized operations in manufacturing, EPC, and O&M, Inox Wind is well poised as a leader in India's renewable energy shift.

#3 Tata Power Company (Tata Power Solar)

Tata Power Company (an arm of Tata Group) is primarily involved in the business of the generation, transmission and distribution of electricity. It aims to produce electricity completely through renewable sources. It also manufactures solar roofs and plans to build 1 lakh Electric vehicle (EV) charging stations by 2025. The company is India's largest vertically-integrated power company.

Tata Power Solar Power, Tata Power's subsidiary, has become one of India's largest ancillary players in the value chain of renewable energy through its integrated manufacturing and EPC capabilities. Its subsidiary manufactured nearly 950 MW of solar modules and 900 MW of cells in the first quarter of FY26 as operations stabilized and higher output is likely as yields and efficiencies improve. This scale highlights its increasing relevance as a local supplier with increasing demand for clean energy solutions.

Tata Power Solar has also deepened its footprint in project execution. In Q1 FY26, it commissioned 652 MW of EPC projects, nearly doubling the 350 MW installed during the corresponding quarter last year. Of this, 560 MW were for third-party customers and 92 MW for Tata Power's utility-scale projects. Third-party orders are expected to be fulfilled by Q3, and then capacity will be devoted primarily to its own pipeline of 1.6 GW utility-scale projects scheduled for the next three quarters.

Rooftop solar has emerged as a growth driver as well. Shipments have increased sharply from 1,000 units in March 2024 to 20,000 units as of June 2025, with a target of 40,000-50,000 units monthly by the end of the year.

This growth is propelled by government initiatives like PM Surya Ghar and by growing demand from residential as well as commercial consumers. The rooftop space also gained traction because of domestic content mandates, with Tata Power Solar now providing almost 100% of its rooftop assignments with its own DCR-compliant modules and cells.

Strategically, the firm is well placed to benefit from policy change. From June 2026 onwards, India will need all solar projects to have DCR-approved cells and modules, going beyond subsidized residential schemes to the commercial and industrial segments.

Tata Power Solar, which already produces at 94-95% capacity utilization in its 4 GW cell and module capacity, is gearing up further with new technologies like TOPCon, which will complement its Mono PERC offerings. Management has mentioned that capacity addition is still on the table for discussion, in sync with increasing local demand.

With an in-house pipeline of 5.4 GW of projects to deliver, Tata Power Solar has deliberately slowed down third-party utility-scale orders to prioritize its own backlog. The strength of manufacturing, increasing rooftop footprint, favorable policy winds, and expansion of advanced technologies place Tata Power Solar at the forefront of India's clean energy transformation as an ancillary leader.

The fact that it can balance third-party sales with captive loads, ensuring compliance with government stipulations for local sourcing, keeps the subsidiary at the core of Tata Power's overall renewable growth strategy.

#4 Sterling and Wilson Renewable Energy

Sterling and Wilson Renewable Energy (SWRE) is one of the leading end-to-end solar engineering, procurement and construction (EPC) solutions providers globally and is also engaged in the O&M of solar power projects. The company is backed by strong parentage of Reliance Industries.

During Q1 FY26, the top line of the company increased 93% year-on-year to Rs 1,762 crore, EBITDA rose 175% to Rs 102 crore, and profit after tax reached Rs 39 crore against Rs 5 crore a year ago, despite disruptions in Rajasthan and Gujarat on account of cross-border tensions. Gross margins increased to 11.7% from 10.1% a year ago, driven by muted input costs and improved module price negotiations.

The order book was at Rs 8,348 crore in June 2025, at 88% from domestic projects and the remainder from Europe and South Africa. The management expects inflows to improve in the second half as more than 26 GW of bids in India approach award, complemented by overseas opportunities in Africa and Europe. Guidance is for 15-20% growth in order booking this year with new tenders likely under India's renewable growth push.

Execution pace is contributing to the operations and maintenance (O&M) business. The pipeline grew to 9.3 GW as of June 2025, and with big EPC projects closing in on completion, this foundation will grow even larger in the second half. Strategic third-party O&M deals are also being pursued to bring in steady revenues both in India and internationally.

Future strategy is closely linked to policy trends. The government's ALMM for solar cells has a validity from June 2026, but the developers are looking for extensions since the domestic manufacturing capacity is low. This uncertainty has pushed some of the projects into subsequent quarters, but SWRE is confident that it will benefit once there is clarity.

Meanwhile, the new regulation requiring 20% storage of batteries together with solar plants will generate new EPC demand. SWRE anticipates at least 10% of future revenues to be derived from contracts related to storage, with visibility already established in a 3 GW pipeline.

Capex will remain selective since the firm has an asset-light EPC model, but management is increasing banking lines and has obtained sanctions of Rs 900 crore, with talks for an additional Rs 1,500 crore underway.

A two-notch rating upgrade to BBB+ has also lowered financing costs. Internationally, SWRE is targeting $250-300 million in orders this year, primarily from Europe and Africa, while evaluating opportunities in hybrid and storage solutions. Backed by Reliance and the Shapoorji Pallonji group, the company is positioning itself as a reputed ancillary EPC player with both domestic strength and global reach.

#5 Waaree Energies

Incorporated in December 1990, Waaree Energies is an Indian manufacturer of solar PV modules. Waaree Energies is fast consolidating its position as one of India's most reputed ancillary players in the renewable sector.

It has developed the nation's largest integrated solar giga facility, with 10 GW of module capacity and 5.4 GW of cell capacity. New plants are also under construction -- including 10 GW of solar cells, a 300 MW hydrogen electrolyser, 3.5 GWh of battery energy storage, and a 3 GW inverter unit.

Financial performance has highlighted this growth. In Q1 FY26, revenue rose 31% year-on-year to Rs 4,597 crore, EBITDA climbed 83% to Rs 1,169 crore, and profit after tax surged 93% to Rs 773 crore. Quarterly production hit a record 2.3 GW, up 64% from last year. The order book stands at 25 GW worth nearly Rs 49,000 crore, with a pipeline exceeding 100 GW. Approximately 41% of confirmed orders are from India, and the remaining is distributed across international markets such as the U.S. and Europe.

Expansion is being influenced by positive policies. India installed 10.6 GW of solar in Q1 alone, close to half of last year's total, and the government has notified the ALMM policy for solar cells from June 2026, which will be promoting domestic manufacturing and employment generation. Waaree has also secured 2.23 GW of new U.S. orders, underpinned by drivers like AI-driven data centre demand, reshoring of industries, and electrification of transport. Its U.S. manufacturing is a buffer against trade measures such as anti-dumping investigations or tariff increases.

It is diversifying away from modules into adjacencies. In FY27, it expects to have 26 GW module, 16 GW cell and 10 GW ingot-wafer capacity. A 3.5 GWh battery storage project is under construction in Gujarat, a 3 GW inverter factory will be commissioned this financial year, and a 300 MW electrolyser is on schedule for FY27. The board has sanctioned another Rs 2,754 crore to increase cell and ingot-wafer capacity by 4 GW each, reinforcing Waaree's position as a full-stack energy solutions company.

Subsidiary Indosolar has also been consolidated into the larger scheme of things. Based in Greater Noida, it contributes 1.3 GW of module capacity and recorded Rs 196 crore topline and Rs 65 crore EBITDA in Q1. Its presence in the north increases the reach of distribution and aids DCR-compliant projects under government schemes. Management has estimated FY26 EBITDA of Rs 5,500 to Rs 6,000 crore, led by strong demand and ramp-up of new facilities.

With record-breaking performance, a deep order pipeline, and large wagers on storage, hydrogen and inverters, Waaree is placing itself not only as a solar manufacturing company but as a central ancillary to India's energy transition, with increasing heft in global markets as well.

Valuations

Valuations in renewable ancillaries have witnessed sharp re-rating, with present EV/EBITDA multiples being comfortably above their 10-year medians for most companies.

The numbers indicate the extent of re-rating that has already taken place. Suzlon and Inox are at significant premia to their past ranges, indicating optimism over turnaround stories, improved order inflows and industry tailwinds.

The biggest jump is by Sterling & Wilson, with valuations now more than four times its median, a clear indication of market excitement over its execution pipeline. Tata Power is closest to its long-term median, albeit still above. Waaree Energies, on the other hand, trades lower than its historical multiple, indicating relative undervaluation in spite of robust fundamentals and capacity expansion visibility.

This deviation reflects the bigger-picture market sentiment: capital pursuing growth visibility in renewables with little care for mean reversion. Although policy tailwinds like ALMM, storage mandates and export demand warrant positivity, the high multiples pose the question as to how much upside in the future is priced in already.

The test of investors is not who are the sector leaders, but whether valuations at present provide adequate margin of safety for better long-term returns.

Conclusion

The clean energy story of India is well and truly centered on the renewable ancillary sector, and the businesses in it have achieved scale, capacity, and visibility that were unimaginable a decade ago. But valuations tell only half the story.

Where some companies trade above their history and others seem more fairly valued, investment choices cannot be based on multiples. Policy direction, ability to deliver, strength of the balance sheet, changes in global demand, and technological responsiveness are all equally critical factors that will determine long-term performance.

For investors, the message is one of balance. These companies present attractive growth opportunity, but so do the threats -- from supply chain disruptions to regulatory change and shifting competition. A balanced total perspective that takes into account both opportunity and risk is needed before investing capital. In an industry where enthusiasm has run high, sound judgment will be the important in distinguishing lasting value from fleeting momentum.

Disclaimer

Note: We have relied on data from www.Screener.in throughout this article. Only in cases where the data was not available, have we used an alternate, but widely used and accepted source of information.

The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only.

Ekta Sonecha Desai has a passion for writing and a deep interest in the equity markets. Combined with an analytical approach, she likes to dig deep into the world of companies, studying their performance, and uncovering insights that bring value to her readers.

Disclosure: The writer and her dependents do not hold the stocks discussed in this article.