India's new energy vision gains momentum with MNRE's ambitious plans: Report

Government’s new energy vision: The Ministry of New and Renewable Energy (MNRE) has unveiled crucial initiatives aimed at boosting India's green hydrogen ecosystem, marking major progress towards the nation's transition to sustainable energy solutions.

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MNRE's latest announcement outlines plans to establish two hydrogen hubs in India by financial year 2026 (FY26), alongside providing incentives of up to Rs 4,440 crore for electrolyser manufacturing through a second tranche, brokerage firm Motilal Oswal highlighted in its note. 

The measures align closely with the government's overarching vision and complement Reliance Industries Limited's (RIL) strategic investments in the new energy sector, analysts noted.

Billionaire Mukesh Ambani-owned Reliance Industries, in line with its commitment to invest $10 billion in new energy and materials businesses, is actively pursuing the establishment of a Giga-scale electrolyser manufacturing facility in Gujarat. 

The company aims to commence the transition from Grey to green hydrogen production by FY26, with a long-term goal of achieving green hydrogen production costs below $1 per kilogramme.

Moreover, MNRE's guidelines for hydrogen hubs and electrolyser manufacturing incentives signify a pivotal step towards creating a robust hydrogen ecosystem in India. 

By fostering domestic manufacturing capacity and incentivising local value addition, these initiatives are set to majorly lower the overall cost of hydrogen production, Motilal Oswal said in a note.

Furthermore, RIL's forthcoming operations at its solar PV giga factory and battery pack production in the financial year 2025 (FY25) are expected to yield considerable energy savings from FY26 onwards. 

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The Mumbai-based brokerage also said that the expansion plans for the PV and energy storage factories further underscore the company's commitment to renewable energy and materials innovation.

Additionally, the robust performance of RIL's Oil-to-Chemicals (O2C) segment, coupled with promising prospects in the telecom and retail sectors, reinforces analysts' confidence in the company's growth trajectory. 

The projected revenue and earnings before interest, taxes, depreciation and amortisation (EBITDA) growth rates underscore the potential for sustained value creation across RIL's diverse business portfolio.

The company's diversified business model and forward-looking vision position it favourably to capitalise on emerging opportunities in the evolving energy landscape. Considering these factors, Motilal Oswal analysts reiterated their ‘buy’ rating with a target price (TP) of Rs 3,210.

As of 11:17 am, shares of Reliance Industries were trading 0.91 per cent higher at Rs 2,913 per share.