Green Stocks Dec 4 – Is a Revival Getting Close?

Even as the market struggled to muster enough of a recovery, there seems to be an end in sight as far as the green pack's trials and tribulations go. As we have stressed earlier, most stocks are at levels where justifying the price is no longer an issue, and the only challenge that remains is selling a story for the future—one that doesn’t quite have the stumbling blocks many investors have started believing in.

The current talk of below-cost bids for BESS tenders, for instance, certainly doesn’t help, as BESS-driven growth is potentially one of the key drivers of renewable energy expansion as well. Projects in Khavda are the ones that remain on schedule, even as Rajasthan seeks an end to transmission-linked delays.

What is indeed worrying is the risk of strong growth in the rooftop segment being stymied by quality issues, which we see as a real concern.

Pace Digitek showed a jump thanks to a large order win that is to be executed by early next year. The gains seen in a few other stocks, especially developers, seem more a function of compelling valuations now than any specific news-driven move.

There is probably a strong case for India to build its own green index as well, with a universe of at least 25–35 stocks to pick from, depending on how they are defined. An index followed by ETFs or mutual funds would certainly go some way toward deepening the markets for renewable offerings, and we are well-positioned to see one by early next year, ideally.

List of Green Stocks