Green Stocks Dec 12- Week Ends On Hopeful Note for Green Pack

A flurry of order announcements helped keep the price up for Shakti Pumps, even as peer Oswal Pumps had no such luck as it continued on it's journey to new lows. What we saw today was a clear situation of the really beaten down stocks covering some ground, as investors ponder over the right valuations. What is absolutely clear is that the valuations based on prospects are a thing of the past, and new multiples on PE for instance will be at least a third lower. Thanks to strong results, that means many stocks still have an upside left on the new conservative numbers. 

For instance, we heard a solar maker planning an IPO next year talk of a 35 PE in a best case scenario, and a 25 PE in a 'worst case', a number we feel is still optimistic if the fears of overcapacity actually make a presence felt next year. On the other hand, you can check out the commentary from a leading maker, Emmvee, covered  today, where the overcapacity issue is again tackled with a manufacturer's perspective.  Long story short, it is going to be an issue for stand alone module makers and smaller players, while integrated players (cell and modules for now) will do all right.   

Real worries will mount for wind energy players now, as lower solar+BESS bids are beginning to become a real worry for FDRE and RTC tenders bid out, which have not found any takers yet.  With wind a significant component   in developer plans for many of the latter, the lower prices from solar+BESS could trip up a few projects for sure. For discoms, it is the difference between filling their peak power requirements  at a Rs 5 plus price per unit versus under Rs 4 from a slightly more risky option. No prizes for guessing what they will gravitate towards.

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