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In the recent past, various microalgae have been considered a renewable energy source for biofuel production, and their amount and extent can be enhanced by applying certain types of stress including salinity. Although microalgae growing under salinity stress result in a higher lipid content, they simultaneously reduce in growth and biomass output. To resolve this issue, the physiochemical changes in microalgae <i>Scenedesmus</i> sp. BHU1 have been assessed through two-stage cultivation. In stage-I, the maximum carbohydrate and lipid contents (39.55 and 34.10%) were found at a 0.4 M NaCl concentration, while in stage-II, the maximum carbohydrate and lipid contents (42.16 and 38.10%) were obtained in the 8-day-old culture. However, under increased salinity, <i>Scenedesmus</i> sp. BHU1 exhibited a decrease in photosynthetic attributes, including Chl-<i>a</i>, Chl-<i>b</i>, Fv/Fm, Y(II), Y(NPQ), NPQ, qP, qL, qN, and ETRmax but increased Y(NO) and carotenoids content. Apart from physiological attributes, osmoprotectants, stress biomarkers, and nonenzymatic antioxidants were also studied to elucidate the role of reactive oxygen species (ROS) facilitated lipid synthesis. Furthermore, elemental and mineral ion analysis of microalgal biomass was performed to evaluate the biomass quality for biofuel and cell homeostasis. Based on fluorometry analysis, we found the maximum neutral lipids in the 8-day-old grown culture at stage-II in <i>Scenedesmus</i> sp. BHU1. Furthermore, the use of Fourier-transform infrared (FT-IR) and nuclear magnetic resonance (NMR) spectroscopy analyses confirmed the presence of higher levels of hydrocarbons and triacylglycerides (TAGs) composed of saturated fatty acids (SFAs) and monounsaturated fatty acids (MUFAs) in the 8-day-old culture. Therefore, <i>Scenedesmus</i> sp. BHU1 can be a promising microalga for potential biodiesel feedstock.