In the post-Covid world, conscious investing has gained a lot of traction among investors. In fact, in 2021, at a global stage, India made a commitment to reach net carbon zero by 2070. With environmental, social and governance (ESG) themes catching on fast, said analysts at Jefferies India Pvt Ltd. Ltd has outlined key considerations for investors and has chosen stocks from five sectors to bet on Subject, They are as follows:
1) Coal Sector: The fundamental question of India’s transformation is related to its coal sector. Ensuring a planned and equitable transition away from coal will be a significant challenge, with both risks and opportunities in the power sector and beyond.
With about 8% of the state’s revenue from coal activities, there is a need for diversification of the economy.
Coal India Limited will be central to the infection. The company has already taken steps to diversify into renewable energy, with a planned solar capacity of three GW by FY24. Natural gas is also set to play a significant role in displacing coal.
GAIL India Limited Operates approximately 220 MMSMD (Million Metric Standard Cubic Meters Per Day) pipeline capacity and is the largest LNG trader in India.
2) Agriculture accounts for about 20% of India’s greenhouse gas emissions and is the main source of non-carbon dioxide related emissions. Opportunities exist for investors through chemical-free farming and low-cost solutions that improve irrigation and energy efficiency.
UPL Limited likely to play a central role in decarbonization efforts. Through various projects, it is increasing the adoption of digital solutions and increasing the reach of bio-solutions.
3) Road Transport: With the demand for autos increasing by 2040, the growth in electric power-trains is an important area for policy-makers.
Tata Motors Limited Leads the local market with approximately 7% market share. Bajaj Auto Limited, TVS Motor Company Limited and Hero MotoCorp Limited Actively expanding its electric vehicle portfolio.
4) Power Utilities: State-run distribution companies will ease India’s energy transition. Their financial fragility however currently curbs their appetite for investment and transformation of the power grid.
NTPC Limited It should be a major beneficiary of new renewable capacity, as it has access to low-cost funding. Power Grid Corporation of India, Larsen & Toubro Limited, Siemens Limited And KEI International Limited All could see tailwinds from the increased transmission and distribution expenses.
5) Heavy Industry: The share of heavy industry in energy consumption has increased to 42%, making it the largest end user of energy. Incumbent focusing on renewable energy Shree Cement Limited, The Ramco Cements Limited And Ultratech Cement Limited Everyone is active in this regard.
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