Green Stocks Oct 15-Diwali Countdown Or Damp Squib?

As we highlighted yesterday, the green pack has been losing its high alpha status in recent months, and that was amply visible today as most stocks struggled to keep up with the broader market rise. Even stocks like Waaree RTL, that had shot up post results, have made a quick climbdown a few sessions later, as investors continue to weigh value in the sector. 

Another example was Saatvik Solar, which had jumped 10% on announcing a large order win last week, barely budging on announcing a significant order win today. All the signs point to a degree of ennui, with investors increasingly looking beyond announcements to actual numbers and margins.

The first signs of pressure in the solar manufacturing space, for instance, could lead to serious price corrections in the more richly valued stocks, putting more pressure than ever on managements to deliver, if they track their stock prices. That is not something one would advise to any management, though, other than perhaps a gentle reminder to be a little conservative when pricing IPOs, to leave something for investors on the table.

It is becoming clearer that stocks that lose too much, too fast, post listing struggle to recover for a much longer time than stocks that have already delivered a listing pop and gains for investors. NTPC Green and Acme Solar are good examples of the former, even as Waaree Energies and Premier Energies would appear to be good examples of the latter. 

Strong disparities in valuations are also emerging between players as expected, with efficiency of managing firms, profitable and large pipeline rather than just the latter, and clarity of vision for the next two years and beyond counting for a lot. The sorting has started, and expect clear tiers of firms to emerge, based on investor appetite for their narratives.

List Of Green Stocks