Green Stocks May 2: No Weekend Joy for Most In Green Pack

On a day when the markets see-sawed between cautious optimism and pessimism, only developers saw some joy in the green pack. Perhaps it is a factor of how far they have been beaten down from their highs that drew in bottom fishing, but the picture remained dull for green energy stocks. EPCs like KPI Green and Sterling and Wilson Renewable Energy in particular would be particularly disappointed on another poor day, especially the latter, despite a decent set of results. SWREL seems to be coping with a case where the market is seeing little to no interest in its Promoter group (Reliance) pushing any business towards it. Could it be a case of the promoters losing interest too early? We should know sometime this year we guess.

Shakti Pumps, the solar pump manufacturer which has also been beaten down also held its ground today, even though ‘technically’ it remains in the sell zone. We are not huge believers in technicals beyond a point and certainly believe the stock has the legs to mark a recovery unless the market knows something we don’t vis a vis its Q4 results.

The Wind Energy firms will not worry too much about their stock prices, as those remain at fairly comfortable levels, and not undervalued by any stretch. The stocks to worry about in the sector are possibly outside the green pack, as a plethora of stocks listed on the SME exchange will face a moment of reckoning sooner than later as capacity ramps up across the country. A market facing excess supply might seem like wishful thinking at a time when talk is mostly on DCR module shortages, but we believe we are well on course for a return to normalcy by December or earlier.