5 Stocks Likely to Benefit from India’s ₹20 Lakh Cr
Nuclear Energy Mission!
India’s aim of increasing its nuclear power capacity to 100 GW by 2047, which
is supported by an estimated investment of Rs. 20 lakh crore and involves the
private sector through the SHANTI Act, is providing a number of decades of
opportunity for certain engineering, equipment, and power companies.
Why Could Nuclear
Energy Become a Multi-Decade Investment Theme?
The shift towards nuclear energy
might develop into an investment theme spanning several decades since
constructing an extra 90 GW of nuclear capacity will require continuous and
long-term capital to be directed towards heavy engineering, precision
manufacturing, control systems, and the specialised EPC construction abilities
possessed by only a small number of listed Indian companies that have the
necessary technical record and regulatory approvals.
Most important of all, in contrast to conventional
infrastructure investments, nuclear facilities set up a compounding value
cycle, producing steady income streams over many decades through ongoing maintenance,
replacement of components, handling of fuel, and system modernisation well
after the initial commissioning of the plant.
1. Larsen & Toubro (L&T)
Because of its long
experience in constructing complex nuclear infrastructure, Larsen & Toubro is
one of the main beneficiaries of India’s nuclear expansion. The company has
provided key equipment, such as steam generators, for projects including the
Kakrapar Atomic Power Station and it still submits bids for reactor
construction packages with NPCIL and joint ventures like Anushakti Vidyut
Nigam.
The Heavy Engineering business unit produces reactor-grade
forgings, pressure vessels, and other specialised equipment needed for nuclear
power plants. Since India aims to achieve 100 GW of nuclear capacity by 2047,
the engineering abilities, manufacturing strength and proven track record in
carrying out projects mean that L&T is in a good position to obtain a
bigger portion of the forthcoming orders for reactors and the associated
equipment.
2. Bharat Heavy Electricals (BHEL)
Bharat Heavy Electricals is
one of the main beneficiaries of India’s nuclear expansion since it is the
nation’s sole domestic producer of nuclear steam turbines and supplies key
equipment used in nuclear power plants. The company has provided equipment at
all three stages of India’s nuclear programme and thus plays an important role
in the country’s nuclear supply chain.
With the government aiming to
achieve 100 GW of nuclear capacity by 2047, BHEL is likely to gain from the
increasing demand for turbines, heat exchangers, steam generators, and other
heavy electrical equipment needed for the new reactor projects. The company’s
many years of experience in manufacturing, support from the government, and its
existing relationship with NPCIL will enable it to obtain future orders for
nuclear equipment.
3. MTAR Technologies
MTAR Technologies is one of
the very few companies that are listed and which have direct involvement in
India’s nuclear power programme through the provision of high-precision
components for use in nuclear reactors. The company produces reactor internals,
fuel machining heads, coolant channel assemblies, and other vital equipment, as
well as keeping a long-standing relationship with the Nuclear Power Corporation
of India (NPCIL).
Since India is speeding up
its expansion of nuclear capacity, MTAR is in a good position to take advantage
of the increasing demand for specialised reactor components. The company has already
obtained confirmed nuclear orders amounting to Rs. 504 crore for the Kaiga 5
and 6 reactor projects, the deliveries for which will go as far as February
2030. The company’s expertise in precision engineering together with its
established position in the nuclear industry give a good indication of future
order opportunities.
4. NTPC
NTPC is the largest company
in India when it comes to power generation and will therefore have a key role
in the nation’s nuclear expansion programme. Since the government has decided
to permit greater private involvement in the sector, NTPC has raised its
long-term target for nuclear capacity to 30 GW and is expanding its position
through its joint venture with the Nuclear Power Corporation of India (NPCIL),
Anushakti Vidyut Nigam Limited.
The company is currently
taking part in the Rs. 28,000 crore Mahi Banswara Nuclear Power Project, in
which its joint venture has submitted one of India’s largest nuclear EPC
tenders. With an increasing number of nuclear projects being announced in order
to meet the government’s objective of reaching 100 GW by 2047, NTPC is likely
to gain from new power generation assets and from long-term regulated returns.
5. Power Mech Projects
Because of its expertise in
carrying out large-scale engineering, procurement, and construction (EPC)
projects in the power industry, Power Mech Projects is well placed to gain from
India’s nuclear expansion. The company has a great deal of experience in the
areas of erection, testing, commissioning and carrying out the balance-of-plant
work for thermal and hydroelectric power projects, skills which are also needed
when constructing nuclear power plants.
With India speeding up its
programme for the development of new nuclear reactors, demand for experienced
EPC contractors is likely to go up. The fact that Power Mech has had long-term
relationships with companies like BHEL and several state utilities, together
with its established record of carrying out complex power infrastructure
projects, means that it is in a position to take part in future nuclear
construction projects.