Why NTPC, Coal India are making a comeback in post-ESG world
The growth in IT stocks is still intact for the long term investors. Even at current levels, in the next coming quarter, the numbers are likely to be very good and they are likely to beat expectations, says Chakri Lokapriya, CIO & MD, TCG AMC.
If the world is so obsessed with ESG, how come the non-ESG dominated stocks like Coal India and NTPC are making a comeback?
It is a combination of a number of factors in the case of power utility companies. Last year, because of the lockdown, there was very low demand for power — both corporate and consumer. As the unlocking is happening, globally there are supply side issues — not just for coal but also for natural gas and oil because these are various heating elements. There has been a huge surge in the price of national gas worldwide and therefore some of the utilities worldwide are shifting to coal. Alongside, coal prices have gone up. NTPC as a market leader is seeing demand coming back, the valuations are very attractive at about 1.1 times book value of a company of its size.
