SJVN

SJVN, once a personal favorite and a long-term holding, now presents a classic case of market euphoria outpacing fundamental reality. I had exited my position around 104-105, seeing the initial signs of overstretch, though it certainly surprised by running higher to 160-170. Today, even at levels around 90, I find SJVN exceptionally expensive. Historically, this power producer traded at modest single-digit P/E multiples. Now, it commands a P/E of 51-52. This dramatic re-rating, largely fueled by the green-energy narrative, seems entirely detached from its actual growth prospects. While the shift to renewables is real, expecting India to abandon thermal power overnight for hydro and solar is simply unrealistic. SJVN's business is solid, but its earnings growth won't be explosive enough to justify such inflated valuations. My Take: Investors should exercise extreme caution. The market has clearly gotten ahead of itself, valuing a steady, albeit unexciting, business as a high-growth disruptor. A significant correction in SJVN and many other power generation stocks appears inevitable as fundamentals eventually catch up. This is not a good time for new entries; existing holders might consider re-evaluating their positions.