IIFL's investment radar: Spotlighting two sectors poised for growth

The power sector in India has witnessed a significant transformation over the past decade, and Harshvardhan Dole, Vice President of Institutional Equities at IIFL believes this transformation holds promising prospects for both established players and newcomers.

"Particularly, for large players in the sector, there is significant growth potential beyond 2030. This optimism arises from their ambitions beyond traditional thermal power sources, indicating a shift towards more sustainable and diverse energy options," Dole said in an interview with CNBC-TV18.

Companies that have survived the changes over the last decade are now thinking about thermal plus green energy as essentially a way to scale up their respective businesses, he said.

Dole is optimistic about companies such as NTPC and Torrent Power as they have strategically positioned themselves within the sector. "Their proactive efforts to diversify energy sources and adapt to evolving market dynamics make them attractive investment options," he said.

Dole identified the emergence of smart meters in the power sector, as a significant and fast-growing theme. Smart meters, he said, offer substantial potential for growth.

Smart meters are advanced electronic devices designed to collect critical data, including electrical energy consumption, voltage levels, current, and power factor. This data is then communicated to both consumers and electricity providers, enabling efficient monitoring and management of energy usage.

Dole also shared his views on the oil marketing companies (OMCs), where he sees favourable valuations. "OMC valuations throughout the chain are currently reasonably priced. Cash flows and profitability are not immediate concerns for players within this sector," he said.

However,  he noted, "There is a sense of uncertainty surrounding the government's potential move to claim a more substantial share of profits from OMCs, which has introduced an element of unpredictability to the market."

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