Sep 10- Green Stocks Outperform markets

As President Trump's flip-flops continued, the markets made the most of the 'good news' from the mercurial US president.  Talk of a conclusion to US-India trade talks was unexpected, and it duly led to a sharp market opening, before things settled down somewhat by the day's close. Outperforming most were our green pack firms, with Vikram Solar in particular shooting up almost 11% before saner views prevailed. Waaree Energies was also a huge gainer, as hopes that its US exports and other businesses there will not be hit rose, and with it the stock price. While the talk of a revival of ties came from the President himself, it is on days like this that one has to wonder how far to count on news that is borderline 'rumour', considering the person behind it. 

The GST changes have already disappointed markets until a clear clarification on claiming input credits, and now, yet another lifeline from the White House has caused a move up again. The time for caution is certainly not past, as things could change as quickly as overnight itself. 

From a stock-specific perspective, it was interesting to see Acme Solar closing above Rs 300  yet again in a week, as it tries to prepare for a sharper move perhaps. Lower-than-expected storage costs could certainly help the firm improve margins on many of the storage tenders it has in its kitty. 

Solar manufacturers will all have benefited from the 80% YoY revenue growth and over 4X rise in profits at Vikram Solar, but one has to wonder if these margins and growth numbers have many quarters to go. Things could start to reverse by the third quarter itself this year, as the higher base effect and market capacity catches up.  Valuations, if they run away too fast too far, will certainly be asset up for disappointment, something long-term investors should note. They might instead do better to look at other material suppliers, besides storage-linked firms, as those seem likely to benefit from especially low prices for now, possibly if they lock in firm orders now.

List of Green Stocks