Electrifying Stocks
Part – 1
Considering the Carbon footprint created by the world in so many years, the need of alternative to fossil fuels i.e. Diesel, petrol or Kerosene have increased to overcome it as soon as possible. The easiest and easily available source of energy is electricity.
Looking towards the easy availability of electricity, the first and foremost alternative to fossil fuels is Electric powered vehicles or “Electric Vehicles”. Electric vehicles have been already in use since many years in many countries of the world and now its demand is also increasing across the globe.
Figure 1 : Date of EV sales till December 2020
Considering the need of Electric vehicles to reduce carbon footprints, Government of India has introduced subsidiary schemes to boost electric vehicle sales in India and has launched “India’s National Electric Mobility Mission Plan”. Government of many states has introduced passenger transport buses powered by Electricity and are targeting to replace all public transport buses with Electric bus in upcoming years.
Figure 2: State wise EV sales break out
Sectors under Electric Vehicle:
Electric vehicle is a wide sector and it comprises of many small and big sectors under it.
Figure 3 : Major Sectors under EV sector
Classification of electric vehicle can be done based on wheel drives i.e. 2 wheelers, 3 wheeler, 4 wheelers and passenger vehicles. Stocks related to that will be discussed later on in next cover story.
Stocks based on Sectors of EV:
- Battery
Many well-known companies manufacturing batteries used in Electric vehicle are:
- Exide Industries
Exide industries have its deep roots and expertise in manufacturing Li-ion batteries for all type of vehicles. They are also planning to setup to set up a Tesla-style gigafactory using the production-linked incentive (PLI) scheme while it ramps-up focus on lithium-ion batteries.
- Amara Raja batteries
Tirupati-based battery maker Amara Raja is also gearing up to invest USD one billion for a 10 to 12 Gigawatts hours (Lithium Ion battery) facility under the ACC(Advanced Chemistry Cell) PLI (Production Linked Incentives) Scheme of the government. Amara Raja Batteries clocked Rs 7,150 crore revenues in FY21 registering Rs 647 crore net profits.
- Tata Chemicals
Tata chemicals a part of Tata group will invest ₹800 crore for a cell manufacturing plant in Dholera, wherein 300 MW to 2 GW of energy storage capacity is planned to meet the demand of Li-Ion batteries in upcoming years.
- Hero Motorcorp
Hero MotoCorp had set up a plant in Chittoor, Andhra Pradesh. The plant, called Garden Factory for its eco-friendly and sustainable manufacturing practices, provides an integrated ecosystem for battery pack manufacturing and testing, vehicle assembly and vehicle end- of-line Testing (EOL). Hero’s combined installed production capacity at 11.5 million units is currently the highest in the country. The company also has two assembly plants overseas: one each in Colombia and Bangladesh.
- Maruti Suzuki
Maruti Suzuki, Toshiba Corp. and Denso Corp. will jointly invest ₹3,715 crore in the second phase of their battery venture in Gujarat’s Hansalpur to build lithium-ion battery manufacturing plant for EVs.
- EV Charging infrastructure
In order to boost India’s activities in EV sector, Government is planning to install up to 70,000 EV chargers across the country in the next few years. Companies that provide charging infrastructures are:
- Tata Power
Tata Power has Tata Power joins hands with HPCL to set up EV charging stations at its Petrol Pumps across the country. It is also planning to setup 1000 charging stations in 5 years and has already completed setting up 1000 charging stations across country.
- RIL
Reliance Industries Limited (RIL) partnered with British Petroleum (BP) fuel and mobility as Reliance BP Mobility Limited (RBML) to set up EV charging stations across country. Its first Jio-BP branded Mobility Station has been setup at Navde, in Maharashtra. The existing network of over 1400 fuel pumps will be rebranded as Jio-BP over the coming months.
- NTPC
NTPC signed MoUs with Vehicle Aggregators Ola, Lithium, Shuttl, Bikxie, Bounce, Electrie and Zoom Car for development and utilization of public charging infrastructure. Company has also been associated with IOCL, HPCL and DMRC for development of public charging infrastructure.
- Power Grid corporation
Power Grid Corporation of India Limited will develop around 11 Electric Vehicle Charging Station (EVCS) in Shillong. It has developed itself as one of the market leaders in EVCS business and has its presence in major cities of India like Hyderabad, Ahmedabad, Delhi, Bengaluru, Gurugram and Kochi.
- Hero Electric
Hero Electric has collaborated with Bengaluru-based EV charging start-up Charzer to establish one lakh charging stations across India. It has also joined hands with EV startup Massive Mobility to set up 10,000 charging stations across the country in next one year.
- Solar Panels
Solar panels market is growing at a rapid space due to Government’s bosst towards it. Solar panels are used set – up near factories, charging stations, roof top of houses and hotels in order make use of Solar energy wherever required. Solar panels are also installed on electric vehicles to continuously generate power for the vehicle. Major Companies related to these sectors are:
- Tata Power
Tata Power has bagged India's largest solar and battery project worth ₹945 crore by Solar Energy Corporation of India (SECI) to build a 100 MW EPC solar project, along with 120 MWh utility scale Battery Energy Storage System.
- RIL
RIL will create a capacity of producing solar power of 100 Gw in 10 years. RIL’s Reliance New Energy Solar Ltd (RNESL), has invested in German “green solar wafers” technology company NexWafe GmbH (NexWafe) as part of a strategy to expand its clean energy portfolio through partnerships.
- Adani Green Energy Limited (AGEL)
Adani Green Energy Ltd (AGEL) will acquire a 40 megawatt (MW) operational solar project, located in Odisha, from Essel Green at an enterprise value of Rs219 crore. Adani Solar has 3.5 Gw of annual solar photovoltaic production capacity accompanied by Adani Green Energy with a portfolio of 25 Gw of commissioned and under construction projects.
- Other components
Components include car chasis, softwares, controllers, chemicals such as Aluminium and copper etc. The below list includes companies which have already steped into Ev sector as direct manufacturers or by partnering with other companies. The companies are:
- Sona BLW Precision
- Motherson Sumi
- Suprajit Engineering
- Minda Industries
- Fiem Industries
- Hindustan Copper
- NALCO
- Hindalco
- Tata Elexsi
- L&T technology
Electric vehicle sector is a growing sector in India and across the world with lots of investments coming underway. Investors can invest in above mentioned company for long term period to get electrifying returns in future.
The recommendations of companies on basis of 2 wheeler, 3 wheeler, 4 wheeler and other type of vehicles will be given in upcoming parts of cover story. Stay tuned for upcoming articles related to electric vehicle sector.
-Het Zaveri
(Disclosures: At the time of writing this article, author, his clients & dependent family members may have positions in the stocks mentioned above. The author, his firm, his clients or any of his dependent family members may make purchases or sale of the securities mentioned in website. Author may have positions in above stocks so have vested interest obviously in their going up or down as the case may be.
Disclaimer: Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken by them. The author won't be liable or responsible for any legal or financial losses made by anybody. Investors must take advice from their financial advisors before investing in any stocks.