A Comparative Analysis of Financial Performance of Renewable Energy Companies

Abstract

There is rapid growth in the renewable energy sector owing to the global movement towards sustainable energy sources and increasing concern about reducing carbon emissions. Notwithstanding the potential that the field holds, companies within it have numerous challenges such as demand fluctuations, high capital costs, and changes in regulatory frameworks. This study assesses and compares the financial performance of two major renewable energy companies: IREDA and Suzlon Energy Limited. The study would cover an analysis of critical financial parameters for the past five years from FY 2019-20 to FY 2023-24, through the analysis of financial ratios to bring out the liquidity, solvency, profitability, and market value of the companies. The study also employs statistical testing using an independent t-test to find out whether significant differences exist between the financial performances of the two companies on various financial ratios. The findings of this study helps to understand the financial health of renewable energy companies and, hence, form an empirical basis on which their financial viability and growth potential can be evaluated in a competitive and fast-evolving industry. This research pinpoints the strengths and weaknesses of each company and provides an understanding for all investors, stakeholders and policymakers in renewable energy development.