Moneycontrol Pro Panorama | Reliance’s green energy play promises more bang for the buck

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Dear Reader,

The Panorama newsletter is sent to Moneycontrol Pro subscribers on market days. It offers easy access to stories published on Moneycontrol Pro and gives a little extra by setting out a context or an event or trend that investors should keep track of.

In its annual general meeting yesterday, India’s most valuable company followed the playbook set by its founder: Think Big.

Reliance Industries Ltd’s pivot to clean energy entails an investment of Rs 75,000 crore over the next three years in solar energy value chain, green hydrogen and fuel cell technologies, besides value chains and partnerships. But that is only one part.

This move can galvanise India’s renewable energy (RE) programme, which has ambitious targets but slowing action. If Reliance generates 100 GW of solar power by the turn of this decade, it will take care of more than 20 per cent of India’s requirement to achieve the 2030 RE target of 450 GW.

It thus makes India less dependent on energy imports and boost’s the country’s geopolitical standing.

That’s the big picture. A closer reading of Mukesh Ambani’s speech and the strategy he has outlined reveal details on which sub-sectors in renewables will benefit. You can read an analysis here.

Importantly as several of our pieces note, the new investments hold out hope for COVID-19 ravaged economy.

Although the second wave is receding, consumer sentiment is subdued. Households are saving more than in normal times, perhaps fearing third wave and near-term uncertainties. The hesitation is showing up in their reluctance to spend on discretionary goods.

Take the case of the auto sector. While showrooms are reopening and auto dealers are seeing new enquiries, overall demand recovery has been gradual till now. Unlike in 2020, the recovery in two-wheelers demand has been slow till now, reveal channel checks by analysts.

No wonder then, global ratings agency S&P warns that households’ desire to rebuild savings can weigh on consumption. The ratings agency has cut India's growth forecast for the current fiscal to 9.5 percent, from 11 percent earlier.

This, of course, has implications for the investor, too. The good news here is companies are battle hardened to deal with demand uncertainties, an analysis of the earnings conference calls shows. They are more concerned over rising raw material prices now.

Second, about a quarter of India’s adult population has been vaccinated at least once, our herd immunity tracker shows. Faster vaccination can accelerate the recovery.

Do check out these investing insights from our research team:

Weekly Tactical Pick | Adani Ports & SEZ

Karur Vysya Bank: Valuation deserves a closer look

Associated Alcohols: A decent mix of growth and value

What else are we reading today?

El Salvador’s Bitcoin experiment is not as disruptive as it may seem at first sight

BPOs get freedom to grow unfettered

Hedge funds rethink tactics after $12-billion hit from meme stock army

 (Republished from the FT)

Technical picks : Hikal, Birla Corp, Indraprastha Gas and Bharat Forge These are published every trading day before markets open and can be read on the app)

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R Sree Ram

Moneycontrol Pro