Green Stocks March 26: Stocks Pulled Down By Uncertainty

Green stocks continued to be pulled down with the broader market, as uncertainty ruled on the likely impact of US actions on India. The drop below psychological levels like Rs 100 for NTPC green, Rs 500 for Borosil Renewables Rs 900 for Premier Energies, etc does not augur well for a strong recovery. There seems to be a clear rerating of whole categories of Green stocks, with developers and EPC firms struggling to justify their high valuations or earnings multiples. PE ratios of 50 or even 100 plus that were the norm before the correction set in seem to be history with the market getting closer to rating the category like a normal stock. In other words, if one can call it a good thing, a promotion to maturity.

That is no surprise in a market like India where nothing good is supposed to or allowed to last long enough. In the case of green stocks, even the predictions of higher summer power demand have failed to enthuse investors, as they realise that the spike will need to be met from thermal sources, and not green energy. That has meant a bigger surge in thermal stocks like NTPC and Coal India than green energy stocks.

All these moves will no doubt have an impact on the long list of firms hoping to hit the public markets in 2026. At the very least, those firms will need to reckon with an equity dilution that is at least 20% higher than they might have planned for a few months ago. And this is assuming most turn out strong Q4 (FY 25 March) numbers. Slippages for exiting firms in the March quarter are going to be punished strongly by the looks of it, as most are off their recently discovered lows, mostly on hopes of a good Q4 set of numbers.