Which stocks to pick as India enters power shortage cycle? Nikhil Nigania answers

economictimes.indiatimes.com:

Nikhil Nigania, Director,Bernstein, says “in almost all power shortage cycles, ideally the guy who makes the most money is the person with the merchant power plant. The same thing happened with Jindal Steel and Power last time, which we do not cover. But this time around, there are a few entities who have merchant power plants. JSPL, has moved the merchant plants to the promoter from the listed entity. But entities with merchant plants can make the benefit of the high power price on the power exchange.”

When we have to pick out the winners in the power sector, what is going to be a different story this time? Where should one be looking?
Nikhil Nigania: If we compare the last power cycle, which went on till 2012, versus the current cycle which started a year and a half back, the primary difference was last time there was consistent power shortage throughout the day because we did not have enough private sector participation. It was largely state-owned enterprises which were setting up power plants back then. This time around, while the private sector participation was strong earlier, now we have a unique situation where, due to addition of largely solar capacity, we have shortage in the non-solar as of today.

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So it is very specific to a time of day power shortage that we have now. At the same time, we are doing energy transitions and are also solving non-solar hour shortages, which is leading to a power cycle this time.
In terms of the winners of this last cycle versus