Is it the right time to go Green?

The Energy demand is rising with the growth of Global population. The use of renewal energy sources has been increasing and thus leading to the question: Is it a good time to invest in The Green Energy theme?

We at Niveshaay are bullish on Green Energy theme

• Consumption boost in the Solar Power Industry

• Increasing adoption of Electric Vehicles

• Government support to green incentives via PLI schemes

• The uptick in Private Capex expenditure by Corporates

Where are we investing in our Green Energy smallcase?

Our Green Energy smallcase plays on clean energy, the emerging electric vehicle sector, improving energy efficiency either through a reduction in electricity consumption or having a recyclability quotient. 

Peripheral play on electric vehicles

The battery management system (BMS) uses shunt resistors. BMS monitors the battery in the car. For EVs, the application of shunt resistors is much more important and critical as BMS plays a very important role. There are only 4-5 low TCF Shunt Resistors manufacturers across the world.

Ancillary play on the solar industry

The solar glass required in manufacturing solar modules is a technical and critical product. In India, there is only one company that has successfully developed solar glass over time and now is the market leader with substantial capacity additions coming in the next 2-3 years. They can benefit more from the adoption of dual glass solar modules that are more energy efficient. This trend would take time to get adopted in India.

Second-order play on Wind Energy

In the wind energy sector, there is tough competition among wind turbine producers to manufacture taller wind turbines that increase energy generation. There is a company that is well placed to benefit from the installation of these taller wind turbines since installing them requires a crane with higher tonnage capacity. This has created a demand and supply mismatch in favor of crane rental companies.

Niche market play to the emerging broad trend of EVs in 2-wheelers

In the automotive sector, the adoption of electric 2-wheelers is faster compared to other segments in the industry. As electric vehicles require more energy-efficient parts, automotive LED headlamp suppliers to 2-wheelers with a higher value are expected to perform better than conventional lamps with similar margins.

Who should invest in this smallcase?

This smallcase is best suited for investors with a high-risk appetite investing into this thematic portfolio. Investors should have a long-term investment horizon and can hold on to their investments in the Green Energy smallcase over the next 3 to 5 years.