Power Stocks: Stay Invested or Exit?

I hold a significant portion of power stocks in my portfolio, and they have finally turned positive after a prolonged period. I am uncertain whether to continue holding them or to book profits now. - Sanjana Chitnis 

Editor Responds: Power stocks typically perform better around the summer season due to a sharp rise in electricity demand driven by higher usage of cooling appliances. This seasonal spike leads to increased power consumption, boosting revenues and profitability for power sector companies. Over the long term, holding power stocks can be rewarding as the sector stands to benefit from structural growth drivers such as expanding industrial activity, renewable energy transition, and the government’s consistent push for improving electrification and grid reliability. These factors suggest that beyond seasonal gains, the power sector offers strong long-term growth potential, making it an attractive investment avenue for patient investors. The BSE Power Index had plunged nearly 35 per cent from its 52-week high to its recent low. Although a noticeable recovery has taken place, the index still remains over 20 per cent below its peak. Renewed optimism among investors could further support your power sector investments, especially those that have just begun to recover from earlier losses. For detailed insights and investment opportunities in the power sector, stay tuned to Dalal Street Investment Journal. Our upcoming issue will spotlight the sector amid the summer demand surge.