Update on Surana Solar and Next Stock

Dear Readers,

We have seen several comments on blog regarding Surana Solar and future outlook of solar sector. Need to read the below details and information given under links to know the matter in depth. 

1) Stock was suggested on 1 Jan 2016 at Rs 23 based on huge development in solar sector with ambitious target of 100 GW which will make  India one of the largest Green Energy producers in the world.

http://pib.nic.in/newsite/PrintRelease.aspx?relid=122567

2) Government has started the solar mission with full support to domestic manufacturers with sufficient budget and reservation.

http://mnre.gov.in/file-manager/UserFiles/gcrt-cfa-notification-04-03-2016.pdf

3) Issue started in Feb 2106  when India lost an appeal at the World Trade Organization (WTO) against a decision that found the country’s regulations that mandate use of local content for some solar power projects. Under the National Solar Mission, India has mandated that around 5% of the planned 100 GW installed solar power capacity use locally-manufactured modules and equipment.

http://www.greenpeace.org/india/en/Press/Greenpeace-Supports-Indias-decision-to-challenge-WTO-ruling-on-Indias-Solar-Mission/

4) US companies did not get any benefit from above objection because most of the solar plant developers opted for chinese solar product. Chinese companies were struggling due to slowdown since mid of 2015. They have quoted very low price for huge volume with very short delivery time. 

http://www.saurenergy.com/solar-energy-articles/indian-solar-energy-market-analysis

5) Domestic solar component manufacturers are unable to compete on cost with chinese manufacturers. Indian solar manufacturers have filed a  petition with Ministry of New and Renewable Energy (MNRE) calling for the introduction of anti-dumping (AD) measures on solar cells and modules produced in China, Malaysia and Taiwan. 

https://www.pv-magazine.com/2017/06/06/breaking-indian-solar-companies-file-ad-petition-against-china/

The Stock corrected 10 -15% after the news that the Ministry of Finance has refused to approve a Rs 20,000 crore ($3.1 billion) relief package for solar cell and module manufacturers.

http://energy.economictimes.indiatimes.com/news/renewable/finance-ministry-rejects-rs-20000-crore-plan-for-local-solar-equipment-firms/59279143

6) With current situation, it is very much possible to achieve the National Solar Mission for 100 GW power generation capacity by 2022. It has helped Indian solar mission to achieve the  set target on time at low cost. Solar Power cost fell down from Rs 6.5 per unit to Rs 2.5 per unit. 

http://www.mnre.gov.in/

We can expect change in solar policy or financial support for domestic manufacturers in next 2 -3 years or  near to the completion of 50 - 60 GW installed solar capacity.

Our Strategy on Investment

Generally I used to reply on several comments as given below

" Need to stick with investment decision for 2-3 years unless change in fundamental of the company" 

" It will give either good gain or good experience" 

It means that we should give at least for 2-3 years to see the improvement in performance of any company.  It is also good hold a stock even with negative return because it will test and build our patience, gives good experience to control on emotions and to remind us for not repeating the same mistake again.   

" Allocate upto  5 -10% only in stocks below 25 rupees and keep only one stock in portfolio" 

" Buy stocks  within + / - 10 % from suggested price"

Even in any condition the recent fall in stock price of Surana Solar will not make any major impact on overall portfolio value and portfolio will able to give consistent return around 40 -50% per year along with loss of Surana Solar. So it should not be the any major cause of concern for our blog members.

But it gives different feeling when we look at comments posted on the blog.

1) It may be possible that investors have already got enough good experience to control their patience in last 18 months with Surana Solar. 

2) They may have bought at higher price and given more than 10% allocation to Surana Solar.

Whatever may be the reason, we have to resolve the issue or concern raised by our blog members.

If above mentioned conditions are true than it is right time to swap Surana Solar with next stock. Next stock will be posted in the last week of July or first week of August. It is fundamentally very strong stock and able to give around 50 -100% return within one year and very good investment option for long term.

It should not be taken as sell call for Surana Solar and at the same time above details did not left any room for confusion. Now next update will be given for Surana Solar on 1 January 2019. 

I unable to reply several emails due to lack of time. Hopefully I will respond it in coming weekends.