Power stocks surge amid policy push to drive demand for energy
Power stocks were among the top gainers on Tuesday, riding the bullish momentum in the past month, as investors bet that the government's increased thrust on manufacturing would boost the demand for energy. The BSE Power Index, which gained 10% in the last month, rose 1.5% on Tuesday.
Analysts believe the favourable government policies for the sector, continued peak power deficits and the country's shift towards clean energy will drive the re-rating of power stocks.
Tata Power, NTPC, CESC, NHPC, and SJVN are among the preferred stock picks.
«Favourable government policies, robust power demand, a higher focus on electrification, increased capex towards energy sector projects and improved economics for renewable energy sector are some fundamental reasons that have catapulted to the turnaround of power stocks,» said Manish Chowdhury, head of research, StoxBox. «Moreover, strong financial performance, attractive valuation, large headroom for growth and revenue visibility are prompting investors to make a beeline for these stocks.»
Adani Power, SJVN, Reliance Power, RattanIndia Power, Inox Wind, and JP Power gained over 5% on Tuesday.
Adani Power shares rallied 45% in the last month, and GE T&D India shares have jumped 36% during this period.
JP Power and Adani Energy Solutions (erstwhile Adani Transmission) have surged 24% each in the last month. Tata Power, SJVN, and NTPC rose 12% and 17% and 14% in one month.
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