Sir can u provide detailed description about the solar and power sector companies

Let us say if you want to invest 1 crore in any asset (gold, stocks, land etc.), there are basically few ways to do it – use your money, use borrowed money or the combination of both.

Using some “borrowed” money to invest is what is called as “Leverage” in investment terminology.

Leverage can be done in numerous ways – like taking personal loan, bank loan on asset, using F&O etc.

There is no way to “borrow” money to invest without paying some “interest” for the privilege of borrowing. Hence, leverage is good only if you can earn more returns from the invested asset than the cost of leverage.

Using F&O, there is no explicit interest stated like when you take bank loan. But there is still a cost of leverage – which usually comes down to 10-15% per annum.

The stock did not shoot up because of announcement of sale of hydrogen- it shot up on the news of 50 percent stake sale in the subsidiary of Middle East, showing managements commitment to reduce debt. The management has been very clear that hydrogen is proof of principle and a prototype that has got approved – and as of now because of the ambiguity in future of fuel sources of automotive engineering, management is being prepared to have first mover advantage. The extreme short term bearish or sideways view may be correct because it seems the market doesn’t like 15 percent guidances nowadays, but the company is exactly walking the talk and at the exact same timeline they said. The concall had terrific clarity about growth runway and management vision. The new capex will come online this year and may be a trigger for rerating – also the management said that the LPG order may be announced in 15 days or so because they are already continuing to deliver – that may also be a short term trigger for an upmove. It surprises me that all news is in public domain and yet at announcements and results we keep reacting at 4-5-10 percent stock movements.

Also regarding Hydrogen cylinders – after the announcement of which the stock shot up – sales is yet to begin and demand is not certain. this company’s management has also highlighted in the concall.

Varroc engineering is a turnaround story they recently got an order of 8500cr and 40% of that is for EV vehicles. This stock is available at a PE 16 and market cap close to 8,600cr, which same as its recent order of 8,500 cr. As per my sources a big investor is doing bottom fishing at current levels of 575. My view is positive as the 2-wheeler industry is coming back to pre-covid levels. Expecting all time on charts soon!!