Power Stocks Wobble on China Return Fears, But IIFL Sees Limited Impact

• Capital goods stocks saw a sell-off due to reports of Chinese firms re-entering the Indian power sector.
• IIFL's Renu Baid Pugalia states no official restriction lift, but case-by-case approvals are happening.
• TBEA, a Chinese manufacturer with an Indian presence, reportedly approved to supply high-voltage reactors to government entities.
• These components are crucial for 400 and 765 kV transmission, a segment with domestic players like Hitachi Energy and CG Power.
• Baid believes the impact on earnings and market pricing will be limited, citing high capacity utilization and upcoming domestic capacity expansion.

Why It Matters: Chinese firms' re-entry into India's power sector causes market jitters, but IIFL predicts limited long-term impact.