Why Does Elara Capital Call Power The Biggest Capex Theme Till 2030?
The Indian power sector is undergoing a structural transformation, fueled by rising demand, infrastructure upgrades, and a policy push toward renewable energy. Elara Capital, in a recent conversation with CNBC-TV18, highlighted that power is one of the biggest themes in India’s capex cycle and is likely to remain so until 2030. The brokerage pointed out its preferred names, including Siemens, Quality Power, Elecon, APAR Industries, and Azad Engineering, while cautioning on margin normalization for ABB.
About Elara Capital’s View
Elara Capital is a leading brokerage firm known for tracking capex cycles and industrial growth themes. Their recent insights emphasize how the Indian economy is shifting from consumption-driven growth to investment-driven expansion. Power, being the backbone of industrial activity and infrastructure, naturally sits at the center of this theme. Elara believes this momentum is not a short-term trend but a decade-long opportunity, powered by both private and government investments.
• Power remains a dominant capex theme until 2030.
• Preference for Siemens, Quality Power, Elecon, APAR, Azad Engineering.
• ABB margins unlikely to normalize soon.
Why Power Is A Long-Term Capex Theme
India’s rapid industrialization, urbanization, and digital expansion are pushing energy requirements higher. The government’s focus on renewable energy, electrification of transport, and grid modernization further strengthens the case for power as a structural growth theme. Capex in this sector is not just about adding capacity but also about upgrading technology, improving efficiency, and reducing dependence on fossil fuels.
• Rising electricity demand across industries.
• Policy focus on clean energy and net-zero targets.
• Modernization of transmission & distribution networks.
• Shift towards electric mobility and smart grids.
Preferred Companies And Why They Stand Out
Elara Capital’s stock preferences reflect a blend of core engineering players and niche manufacturers. Siemens remains a key pick given its leadership in automation and electrification technologies. Quality Power, Elecon, and APAR Industries are expected to benefit from rising investments in power equipment, while Azad Engineering’s specialized capabilities make it an attractive long-term bet.
• Siemens: Valuations have cooled from highs, making entry more attractive.
• Quality Power: Rising demand for electrical equipment.
• Elecon: Strong presence in power transmission gear systems.
• APAR Industries: Key player in conductors and specialty cables.
• Azad Engineering: Gaining traction with niche high-tech products.
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Why Elara Is Cautious On ABB
While ABB has historically enjoyed strong margins due to its technological leadership, Elara Capital believes that its profitability levels may not revert to previous highs. Rising competition, input cost challenges, and normalization of demand patterns in certain segments are expected to keep margins under pressure. This perspective underlines the importance of being selective within the sector.
• Margins may not normalize to past levels.
• Competitive intensity rising in core product lines.
• Investors advised to be realistic on profit trajectory.
Investor Takeaway
Elara Capital’s analysis shows that power is more than just another theme—it’s the backbone of India’s growth story for the next decade. Their stock preferences highlight where investors might find the most value, with Siemens, Elecon, APAR, Quality Power, and Azad Engineering being the standouts. However, caution on ABB margins suggests that not every sector leader will deliver equally. Investors should balance long-term optimism with selective positioning. For continued sector insights, stay updated at Indian-Share-Tips.com, which is a SEBI Registered Advisory Services.
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
