Govt's ambitious thrust makes climate suitable for renewable energy companies
Renewable energy companies have been among the hot investment themes on Dalal Street in the past six months as the government's thrust to boost clean power capacities is driving investor appetite in the sector. Shares of sectoral players such as Suzlon Energy, SJVN, NHPC, and NTPC, among others, surged between 25% and 225% in this period but analysts said investors must tone down their expectations of lofty returns from here on.
The government's target to achieve 500 GW of renewable energy generation by 2030 is making market participants positive about these firms.
«The revenue visibility of the renewable energy sector is quite strong, and the government is also aiming to generate more energy from wind and solar mediums having laid out ambitious targets,» said Deepak Jasani, head of retail research at HDFC Securities. «There are also limited players in the renewable energy sector and there are expectations for all companies to benefit from the government's push.»
Suzlon has been among the investor favourites, clocking 225% gains in the past six months after almost five years of being discarded by investors amid worries about its indebtedness.
Suzlon shares, which closed at ₹39.65 on Tuesday, could surge another 24% to around ₹48-49 levels in the coming days, said Shiju Koothupalakkal, technical research analyst at Prabhudas Lilladher.
Among other stocks in the sector, SJVN gained 140%, INOX Wind jumped 136% and NTPC rose 64. «With the government announcing aggressive renewable energy additions with targets of more than 40 GW every year, already 30 GW is under the tendering process,» said Subhadip Mitra, executive director at Nuvama Institutional Equities.
