The objective of this study was to determine drought tolerance, kernel (KY) and fodder yield and quality amongst diverse groundnut genotypes for direct production or breeding. Hundred genotypes were evaluated at ICRISAT, India during 2018–2019 and 2019–2020 under drought‐stressed (DS) and nonstressed (NS) conditions. Data were collected on KY; oil content (OC); oil yield (OY); protein content; palmitic, stearic, oleic, and linoleic acid contents; haulm yield (HY); and fodder quality parameters such as the contents of dry matter, ash, nitrogen (NC), neutral detergent fiber (NDFDM), acid detergent fiber (ADFDM), acid detergent lignin (ADLDM), in vitro digestibility, and metabolizable energy. Data were subjected to parametric and nonparametric statistical analyses. Combined analysis of variance revealed significant (P < .05) genotype differences for all assessed traits. Genotype × water regime interaction effects were significant for KY, OC, ash, NC, NDFDM, and ADLDM. Kernel yield positively and significantly (P < .05) correlated with OY (r = .99), LAC (r = .13), ash (r = .32), and NDFDM (r = .54) under DS condition. Haulm yield was positively and significantly (P < .05) correlated with OC (r = .24), NDFDM (r = .19), ADFDM (r = .18), and ADLDM (r = .17) under DS condition. The study identified four genotypes with high kernel and haulm yields, and six genotypes with high oleic acid content. Further, 10 genotypes were selected with relatively better drought tolerance. The selected genotypes are recommended for further breeding and variety release adapted to drought conditions.