SJVN

Investment in SJVN can be a long term trade. This stock is trading at market valuation of Rs10,000 crore with return of equity around 11%. The company's valuation is calculated mostly on the basis of three things namely cash flows, earnings growth and current return on equity. This company is in the hydropower generation which is the most sustainable form of creating power in future and with Narender Modi' s inclination towards our water resources this sector can be expected to grow atleast 10-20 % p.a.. With the good dividend policy of this company it becomes one of cash cow stocks available in the market right now. And looking at the current return on equity of 11% is above the CPI Inflation rate of 8% and offers as a good trade to get in.

Investing in power sector where the demand exceeds way more than the supply. The demand side constraint is never a problem for this sector and the supply side will be addressed by the new government at the centre. This can be the next bull sector for india which is the generation of power through renewable resources. 

GREAT TIME TO INVEST IN SPECIFIC INDIAN STOCKS

Power sector

Looking at BSE Power index over a period of five years the previous government hasn't made this as a profitable proposition for private players to create a business friendly sector. It includes delays in coal blocks allocation, delays in environmental approval and so on so forth. The PSU's doing the power distribution and production were paralysed because of huge wage cost for the employees and bad environment to operate efficiently and effectively.

Looking at the overall scenario if these underlying issues can be taken care of with good governance and effective implementation of power sector reforms, the current valuation of various stocks like NTPC, TATA POWER, SJVN( particularly) and RELIANCE INFRA can easily given an aggregate return of 15-18 percent over the longer term period.