Green Stocks Jan 13: Seeking a Bottom, Stocks Continue Slide

As the market slumps, green energy stocks, most of which are in the small-cap and mid-cap space, continued to bear the brunt of even bigger falls, in keeping with the trend for the past two weeks. Leading the fall today by a wide margin was Waaree Renewable Technologies Limited, as the EPC arm of the Waaree group crashed 20% to another low. The distance to its 52-week low of Rs 472 however, remains significant.

Coincidentally, on a day when the circuit for the stock was revised to 20%. Talk about poor timing. Other major drops were witnessed in Adani Green, which has given up a year's gains top trade at sub-Rs 900 levels today, down over 4%. Borosil Renewables, Sterling and Wilson Renewables, and even Shakti Pumps, all the stocks that had shown relative strength until last week, capitulated today. Public Sector SJVN too dropped over 6% to Rs 90 levels.

The situation is no better outside the green energy pack, as high-flying stocks such as INA Solar, Sahaj Solar, etc have all suffered the same level of price routs. With Price-to-book values routinely in the high teens or higher, it does seem like the market is rushing to bring down prices to a level where these firms are firmly grounded in terms of actual book value. Perhaps the only factor that the market will hope for is relief from other macro indicators or actions now. Buying support has evaporated as fear takes over, and one could argue that the time to buy is not looking too distant if results play out as expected.