The buzz word in the Indian stock market at present is “Power”. Being bullish in Indian stock market, more so in the power sector (earlier post: Power shows: Market this week) made me to have a look in this particular direction.
The recently introduced BSE Power Index is just an indication of aspiration the market have in this particular sector. This sector was neglected so far due to some prevailing draconian rules. With the development of economy and overall living standards of our country, Government can’t effort to ignore this sector. Let’s have a look at those power stocks which had entered into Indian stock market this year
Power Finance Corporation
Power Grid Corporation
Surjyachakra Power
Indowind Energy
All have done well so far in the market for their unique business models. To me these four stocks are yet to have a proper valuation and so they still have some upside left to be realized. If we consider the demand supply mismatch of power in our country the power stocks are most likely to appreciate and be outperformers to index. We have already seen some actions in this sector.
Some real big players are poised to enter our stock market in near future. Entry of these companies will further strengthen this sector. The noticeable will be the followings:
Reliance Power
Rural Electrification Corp.
NHPC
BGR Energy
We already are in the midst of a very good Bull Run of our market. The market may correct itself in a stock specific way, every time after a very good run. The concern for small investors for a proper area to park their profit may well be answered by stocks in this particular sector.
A good selection of mid cap power stocks at this juncture may yield some multibaggers. Fundamentally good power stocks are for some really long time hold, at least for a decade or till the demand supply mismatch will be shorted out (till 2017 as per investment bank Artherstone).
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