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Best EV and Green Energy Model Portfolio in India | Model Stock Portfolio

EV and Green Energy Model Portfolio in India | Model Stock Portfolio | Yadnya Investment Academy (Methodology Document)

Published on 04 March 2022 .Views 1700 .Comments 3
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Introduction

Albert Einstein once said, “Everything is energy and that’s all there is to it. Match the frequency of the reality you want, and you cannot help but get that reality. It can be no other way. This is not philosophy. This is physics.”

The onus of leaving a greener and cleaner climate for future generations lies with us and what could be a better step than the adoption of Electric Vehicles and Green Energy. Green energy is generated from natural resources, such as sunlight, wind, or water. We expect the electric vehicle and green energy revolution to be accepted and become more advanced over time. This is going to be akin to the popularity and adoption of computers and cell phones.

At the recently concluded COP26, India has pledged to reduce its carbon emissions to net-zero by the year 2070. India has set a goal to achieve EV sales accounting for 30% of private cars, 70% of commercial vehicles, and 80% of two and three-wheelers by the year 2030.

According to recent research by Accelerated e-Mobility Revolution for India’s Transportation (e-amrit) portal in India, only 7,96,000 Electric vehicles have been registered till December 2021, and the installation of 1,800 charging stations in public places. It shows that the country has a long way to go to achieve the recommended ratio.

The Indian budget for 2022 also made a big push towards mainstreaming electric mobility. In addition to boosting charging infrastructure, the Indian budget provided for battery swapping policy, special mobility zones for EVs, ratifying building byelaws, cleantech in public transport, and much more. These programs signal the Indian government’s commitment to growing the EV market.

So here we are with a portfolio that benefits from the adoption of these two themes.

Stock Selection Approach
The portfolio is based on Future Theme of Electric Vehicles, Automation & Green Energy. We have considered the entire life cycle of Electric Vehicles which includes companies with products and services in these areas - Commodities, Battery Chemicals, OEMs (2,3,4 wheelers & CV), Automation, Ancillary, Charging Infra and Software.  Here are the different stages in the Electric Vehicle Value chain.

For Green Energy, we have considered companies engaged in the production, transmission, distribution, exchange, and allied activities of Solar, Wind, Hydrogen, and Natural Gas.

We have tried to do an in-depth analysis of the stocks in these two themes by providing scores to stocks based on many quantitative and qualitative parameters like PE ratio, PB, Debt to Equity ratio, PEG Ratio, EV/EBITDA, Beta, ROCE, Sales Growth, Profit Growth, Market Share Analysis, Moat and Moat Dynamics scores, Employee Reviews, Management Compensation as a % of Sales, Earnings Quality and many more.

An important factor that has been considered is the obligation of the company towards the theme, so the capital investments committed by these companies as a percentage of their revenue into these themes have played a critical role in the stock selection process.

Investment objective

The aim is to generate long-term returns by investing in a concentrated portfolio of Indian companies in the EV and Green Energy theme. The idea is to pick stocks that are performing well and have the potential to grow based on the in-depth FIVE G analysis.

Strategy

Buy and Hold investments with a time horizon of 5 years in stocks with strong fundamental characteristics.

Methodology
Sectoral wise breakup of the portfolio
Is this model portfolio for you?

This portfolio is meant for seasoned investors with a high-risk appetite with a time horizon of at least 5 years. The stock weights are calculated using their respective scores in the FIVE G analysis.

The expected average rate of return from a portfolio is 15-18% over time. In its best year, it might gain 25-30% and in its worst year, it could decline by the same scale.

Seasoned Equity Investors who are looking for extra growth & alpha can use this portfolio. Since this is a theme-based portfolio, it has a higher risk.

Time Horizon

Min. 5 years

Rebalancing

Quarterly

Index

BSE 500 TRI Index

Important Dates

Inception Date - Feb 28th, 2022

Launch Date - March 4th, 2022

Market Cap Category - Multi Cap

Last Rebalancing on - August 25th, 2022

Next Rebalancing on - November 25th, 2022

Back-testing Results

Disclaimer: The information on this site is provided for reference purposes only and should not be misconstrued as investment advice. Under no circumstances does this information represent a recommendation to buy or sell stocks. All these portfolios are created based on our expert’s experience in the market. These Model Portfolio are prepared by SEBI Registered RIA.
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