Budget 2024: Anticipating a Surge in Power Stocks Fueled by Renewable Energy Initiatives

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Budget 2024: Power Sector Surges with a 58% Boost; Renewable Energy Set to Ignite Power Stocks

In a significant development, the power segment witnesses a robust 58% surge in allocation to Rs 20,671 crore in the FY24 budget, setting the stage for potential momentum in the power stocks. The upcoming interim budget for FY25 is anticipated to sustain the focus on the power sector, acting as a precursor to future policy decisions.

Policy Direction and Priorities:

Analysts expect the interim budget to align with recent budgets, emphasizing fiscal consolidation and outlining priorities for capital and non-capital expenditure. Despite being interim, the budget is poised to establish the groundwork for upcoming policy decisions.

Renewable Energy Takes Center Stage:

Forecasts from Axis Securities suggest that the power sector is likely to gain additional impetus in the interim budget, driven by the government's heightened emphasis on expanding the utilization of renewable energy. Anticipated announcements include increased capital expenditure for renewable energy, incentives for green initiatives, and production-linked incentives (PLIs) for solar module manufacturing.

Key Expectations:

The report anticipates announcements related to dynamic feed-in tariffs, grid modernization for better integration of intermittent renewable energy sources, and capital spending on battery storage infrastructure. Other expected measures include a potential reduction in customs duty on solar cells and an extension of the waiver on inter-state transmission system charges for renewable projects commissioned beyond June 2025.

Industry Insights:

Experts like Sagar Lele, co-founder of Rupeeting, express optimism about the power sector, citing substantial investments, government reforms, and measures to overcome power deficits. The government's commitment to adding capacity, including coal-based capacity, aligns with the growing demand and the country's 2030 goals for solar, wind, and green hydrogen.

Power Stocks to Watch:

Investors are keeping a close eye on stocks with renewable energy capabilities, expecting them to gain traction during and after Budget 2024. NHPC, Tata Power, Power Grid Corporation of India, and NTPC are among the stocks poised for potential growth, driven by the overall positive sentiment in the power sector.

Investment Opportunities:

Analysts view power capex, particularly in generation, as a catalyst with a multiplier effect, likely triggering a sustained investment cycle. The power sector, currently underrepresented in the overall market, holds significant potential for improvement with expected investments to meet rising demand.

Disclaimer:

The information presented here is for informational purposes only. Gyaanleikh has collected this data without conducting due diligence for accuracy. Readers are advised to verify information independently before making any investment decisions.







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