NTPC and Power Grid Set to Soar as India Expands Power Sector: Expert Insights from Chakri Lokapriya

Chakri Lokapriya, Managing Partner at TCG Asset Management, shares his views on India’s stock market and how companies like NTPC and Power Grid are poised to benefit from the country’s power expansion plans. He also discusses the impact of the US Federal Reserve’s recent interest rate cuts on Indian banks and his take on sectors like FMCG, defence, and infrastructure.

Banking Sector Outlook:

Chakri believes it’s a good time to buy into the market, especially in banking. However, public sector banks (PSUs) might face challenges due to loans like Vodafone’s ₹1 lakh crore debt and the Supreme Court’s mining fines. But private banks like HDFC Bank are starting to fix their loan-to-deposit ratio issues. If HDFC Bank sells even 5% of its loan book, things will improve. He also expects RBI interest rate cuts to further boost banks.

FMCG Sector Concerns:

He suggests staying away from FMCG companies like Dabur, which UBS recently downgraded. Instead, he recommends media stocks like PVR-Inox, as people are still spending on experiences like movies and entertainment, especially with the upcoming festival season.

Tech and Travel Stocks:

Chakri advises caution with stocks like EaseMyTrip and Policybazaar. He feels their margins are weak, especially with MakeMyTrip focusing on electric vehicles, a tough market to enter. Policybazaar’s profits are also under pressure due to low payouts from the insurance sector.

Defence Sector Insights:

Defence stocks, including Bharat Electronics, have shown some recovery. Chakri remains optimistic about their strong order flows but thinks their valuations are currently high. He advises holding off on new investments in this sector for now.

Capex and Power Expansion:

Lokapriya is bullish on energy companies like NTPC and Power Grid, which are set to benefit from India’s massive power expansion. The country needs to add power capacity equivalent to the entire EU’s output in the coming years, making investments in these companies highly profitable. NTPC is expected to double or triple its green energy output in the next decade, while Power Grid will play a key role in managing the complex energy mix of solar, hydro, and thermal power across the nation.

These companies are expected to see substantial growth, even if they achieve a small part of the massive targets ahead.