Adani Power to Tata Power: Power stocks rise after this Union Budget 2025 proposal. Do you own any?

Union Budget 2025: Power-related stocks are trading with gains today, February 1, as Union Finance Minister Nirmala Sitharaman announced key reforms in the nuclear energy sector during the Union Budget 2025 speech. As part of India's ambitious goal to achieve 500 GW of renewable energy capacity by 2030, the government has been making significant strides in expanding clean energy sources.

To further bolster this effort, the minister outlined plans to develop 100 GW of nuclear energy capacity by 2047, with increased participation from the private sector. This will be facilitated through amendments to the Atomic Energy Act, enabling private sector involvement in nuclear power generation.

Following this development, Adani Power shares jumped 3.4%, while those of Tata Power gained 4%.

Boost for capital goods sector

Shruti Jain, Chief Strategy Officer, Arihant Capital Markets said, “Finance Minister Nirmala Sitharaman's announcement in the Union Budget 2025 revealed an ambitious plan to achieve 100 GW of nuclear energy by 2047 and amend the Atomic Energy Act. This initiative aims to bolster India's nuclear energy capacity, providing a notable boost to the capital goods sector with increased investments and opportunities in nuclear infrastructure and technology,”

Shruti Jain pointed out that while this move is beneficial for the capital goods sector, it raises significant concerns regarding sustainability. She highlighted that several countries are phasing out nuclear energy due to its sustainability and safety concerns. For instance, she noted that Germany decided to shut down its nuclear reactors by 2022, Italy voted to remain non-nuclear, Switzerland has banned the construction of new reactors, and Belgium plans to phase out nuclear plants by 2035.

Shruti Jain further emphasized that this announcement also appears to be misaligned with India's commitment to reducing carbon emissions. "While nuclear energy is a low-carbon source, the environmental and safety concerns undermine its long-term sustainability. Balancing this initiative with investments in renewable energy sources like solar and wind, which are more sustainable, is crucial for India's environmental goals," she further added.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.