Green Stocks Oct 24- Poor End To A Volatile Week For Green Pack

Even as the broader markets slipped up on the weekend, a few stocks in the green pack could hold up as well. For instance, the good news for NTPC Green shareholders is that the stock held on the psychological Rs 100 level, even as other developers like Adani Green struggled.

On the manufacturing side, results, both from private and public firms, have signaled a strong undertone in demand and the next few quarters, but that has run up against relatively high valuations as well. The story, in fact, might be shifting to narratives again, as firms race with each other to announce diversifications both backward and forward. In many ways, this contrarian behaviour points to a sector where most of the larger players see a once-in-a-generation opportunity, and are working to capture as much of that as possible. The push into transformers and inverters, for instance, by module manufacturers, or the earlier push into module making by many developers, is something few would have predicted even 3 years ago. 

Will things return to 'normal' at some stage? Of course, they will, but that normal could be 2-3 years away, enough time for one full technology cycle to play out in the core panel business.  Quite simply, even as installation targets in segments like solar pumps, rooftop solar, and coming soon, green hydrogen have ramped up, the only factor holding down incumbents is the large number of new entrants across the board.

From manufacturing to EPC to development. Add to the mix a whole new set of players in the storage segment, and you have to wonder how much the picture could change in the next two years. We have no doubt that while some firms will provide outstanding returns on the back of better execution and judicious planning, many firms will stumble, brought down by over aggressive pricing or market failures.

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