Forecasting Equity Trends of India’s Renewable Energy Sector Using Artificial Neural Networks

Abstract

India has emerged as a prominent advocate for climate-related initiatives on a global scale, consistently maintaining a respected presence in international forums and intergovernmental climate events. In conjunction with sustainable practices and the Sustainable Development Goals (SDGs), the pursuit of a cleaner environment not only yields tangible benefits but also serves as a catalyst for advancements in healthcare, urban governance, finance, investment management, and the circular economy. In this context, this study investigates the stock prices of ten Indian companies involved in green renewable energy, utilizing the Artificial Neural Network (ANN) model to forecast these prices for the period 2020-2024.A comprehensive analysis of macroeconomic variables has been conducted, highlighting their impacts and the associated volatility. The study concludes that the COVID-19 pandemic exerted a differential impact on Indian green companies, and the Efficient Market Hypothesis has been evaluated in this context. Furthermore, it is concluded that while the ANN model is effective, it exhibits certain limitations in predicting the volatility of high-range stocks and the unaccounted volatile movements of stocks due to uncontrolled macroeconomic variables.