Power sector outlook 2024: Robust demand, renewables to drive growth
Despite potential challenges such as freebies and DISCOM dues, experts see potential for growth in the sector in 2024 with a focus on renewables and cautious optimism in thermal capacity.
The power sector witnessed a remarkable surge in 2023, with companies in renewables, power equipment, and smart metering experiencing substantial gains. Notable performers included Inox Wind, HBL Power Systems, HPL Electric and Power, and Transformers and Rectifiers India, which saw impressive gains of 200-400%. Even traditional power generators like NLC India, NTPC, SJVN, and Tata Power gained 50-100%.
Industry experts Girishkumar Kadam, Senior Vice President and Group Head at ICRA, Rahul Prithiani, Senior Director at CRISIL Market Intelligence and Analytics, and Harshvardhan Dole, Senior VP- Institutional Equities at IIFL discussed the prospects for the power sector in 2024 and crucial aspects such as demand trends, potential challenges, and recommended investment areas.
Prithiani highlighted the exceptional growth the power sector experienced in the last six months of 2023, anticipating a robust demand trajectory to persist into 2024. He emphasised the significant capital expenditure (capex) in the renewable energy space, predicting it to be a key driver of power generation. The sector's access to capital and global investor interest further solidifies it as a strong investment opportunity.
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Kadam provided insights into the outlook for different segments within the power sector. He expressed a stable outlook for the thermal sector and renewable generation and transmission, but a negative outlook on the distribution segment. According to his estimates, there is a need for an additional 30-35 gigawatts of thermal capacity by 2030.
Dole shared an optimistic view on India's power demand, stating that the country is at a tipping point for accelerated growth. From a stock perspective, he identified NTPC and Torrent Power as top picks, with L&T continuing to remain favourable. Dole also highlighted CESC as offering an asymmetric payoff, making it an aggressive recommendation.
Also Read | India, Russia ink pacts on construction of future power generating units of Kudankulam nuclear plant
For the entire discussion, watch the accompanying video
(Edited by : Shweta Mungre)
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